# EDGAR Filing Document

**Accession Number:** 0001825024
**File Stem:** 0000950170-23-005066
**Filing Date:** 2023-2
**Character Count:** 968974
**Document Hash:** 9241b8a33d218f62787a1ff810766d58
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000950170-23-005066.hdr.sgml**: 20230228

**ACCESSION NUMBER**: 0000950170-23-005066

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 100

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230228

**DATE AS OF CHANGE**: 20230228

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Offerpad Solutions Inc.
- **CENTRAL INDEX KEY:** 0001825024
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE AGENTS & MANAGERS (FOR OTHERS) [6531]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39641
- **FILM NUMBER:** 23685150

**BUSINESS ADDRESS:**
- **STREET 1:** 4520 DEXTER STREET, N.W.
- **CITY:** WASHINGTON
- **STATE:** DC
- **ZIP:** 20007
- **BUSINESS PHONE:** (202) 918-7070

**MAIL ADDRESS:**
- **STREET 1:** 4520 DEXTER STREET, N.W.
- **CITY:** WASHINGTON
- **STATE:** DC
- **ZIP:** 20007

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Supernova Partners Acquisition Company, Inc.
- **DATE OF NAME CHANGE:** 20200916

?xml version="1.0" encoding="ASCII"? 10-K

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549**

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**FORM** 10-K

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**(Mark One)** 

☒ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the fiscal year ended** **December 31,** 2022

**OR** 

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the transition period from __________ to __________**

**Commission File Number** 001-39641

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![img221734950_0.jpg](img221734950_0.jpg)

Offerpad Solutions Inc.

**(Exact name of Registrant as specified in its Charter)** 

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| | |
|:---|:---|
| Delaware | 85-2800538 |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| 2150 E. Germann Road**,** Suite 1**,** Chandler**,** Arizona | 85286 |
| (Address of principal executive offices) | (Zip Code) |

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**Registrant's telephone number, including area code: (**844**)** 388-4539

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**Securities registered pursuant to Section 12(b) of the Act:** 

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Class A common stock, $0.0001 par value per share | OPAD | The New York Stock Exchange |
| Warrants to purchase Class A common stock, at an exercise price of $11.50 per share | OPADWS | The New York Stock Exchange |

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Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☒ |
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
| Emerging growth company | ☐ |  |  |

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

As of June 30, 2022, the aggregate market value of the registrant's voting and non-voting Class A common stock held by non-affiliates of the registrant was approximately $200.8 million.

As of February 21, 2023, there were 232,571,810 shares of Offerpad's Class A common stock outstanding and 14,816,236 shares of Offerpad's Class B common stock outstanding.

**DOCUMENTS INCORPORATED BY REFERENCE**

Portions of the registrant's definitive Proxy Statement relating to its 2023 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after December 31, 2022 are incorporated by reference into Part III of this Annual Report on Form 10-K.

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**OFFERPAD SOLUTIONS INC.**

**FORM 10-K**

**FOR THE YEAR ENDED DECEMBER 31, 2022**

**TABLE OF CONTENTS**

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| | | |
|:---|:---|:---|
|  |  | **Page** |
| [<u>Cautionary Note Regarding Forward-Looking Statements</u>](#cautionary_note) | [<u>Cautionary Note Regarding Forward-Looking Statements</u>](#cautionary_note) | 4 |
| [<u>Summary Risk Factors</u>](#summary_risk_factors) | [<u>Summary Risk Factors</u>](#summary_risk_factors) | 5 |
| **PART I** |  |  |
| Item 1. | [<u>Business</u>](#item_1_business) | 6 |
| Item 1A. | [<u>Risk Factors</u>](#item_1a_risk_factors) | 13 |
| Item 1B. | [<u>Unresolved Staff Comments</u>](#item_1b_unresolved_staff_comments) | 38 |
| Item 2. | [<u>Properties</u>](#item_2_properties) | 38 |
| Item 3. | [<u>Legal Proceedings</u>](#item_3_legal_proceedings) | 39 |
| Item 4. | [<u>Mine Safety Disclosures</u>](#item_4_mine_safety_disclosures) | 39 |
| **PART II** |  |  |
| Item 5. | [<u>Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities</u>](#item_5_mkt_cmn_equity) | 40 |
| Item 6. | [<u>\[Reserved\]</u>](#item_6_reserved) | 41 |
| Item 7. | [<u>Management's Discussion and Analysis of Financial Condition and Results of Operations</u>](#item_7_mda) | 42 |
| Item 7A. | [<u>Quantitative and Qualitative Disclosures About Market Risk</u>](#item_7a_mkt_risk) | 57 |
| Item 8. | [<u>Financial Statements and Supplementary Data</u>](#item_8_fs_supp_data) | 58 |
| Item 9. | [<u>Changes in and Disagreements With Accountants on Accounting and Financial Disclosure</u>](#item_9_accountants) | 88 |
| Item 9A. | [<u>Controls and Procedures</u>](#item_9a_contols_procedures) | 88 |
| Item 9B. | [<u>Other Information</u>](#item_9b_other_info) | 90 |
| Item 9C. | [<u>Disclosure Regarding Foreign Jurisdictions that Prevent Inspections</u>](#item_9c_foreign_jurisdictions) | 90 |
| **PART III** |  |  |
| Item 10. | [<u>Directors, Executive Officers and Corporate Governance</u>](#item_10_dir_execoff_corpgov) | 91 |
| Item 11. | [<u>Executive Compensation</u>](#item_11_exec_comp) | 93 |
| Item 12. | [<u>Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters</u>](#item_12_sec_owner) | 93 |
| Item 13. | [<u>Certain Relationships and Related Transactions, and Director Independence</u>](#item_13_certain_relationships) | 93 |
| Item 14. | [<u>Principal Accountant Fees and Services</u>](#item_14_prin_acctg_fees_svcs) | 93 |
| **PART IV** |  |  |
| Item 15. | [<u>Exhibits and Financial Statement Schedules</u>](#item_15_exhibits) | 94 |
| Item 16. | [<u>Form 10-K Summary</u>](#item_16_10k_summary) | 97 |
| [<u>SIGNATURES</u>](#signatures) | [<u>SIGNATURES</u>](#signatures) | 98 |

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Offerpad Solutions Inc. \| 2022 Form 10-K \| 3

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Unless the context otherwise requires, references in this Annual Report on Form 10-K to "Offerpad," the "Company," "we," "us," and "our," and similar references refer to the business and operations of Offerpad Solutions Inc. and its consolidated subsidiaries following the consummation of the Business Combination (as defined herein) and to OfferPad, Inc. ("Old OfferPad") and its consolidated subsidiaries prior to the Business Combination.

**Cautionary Note Regarding Forward-Looking Statements**

This Annual Report on Form 10-K includes statements that express Offerpad's opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms "believes," "estimates," "anticipates," "expects," "seeks," "projects," "intends," "plans," "may" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They may appear in a number of places throughout this Annual Report on Form 10-K, including Part I, Item 1A, "Risk Factors," and Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our future results of operations, financial condition and liquidity; our prospects, growth, strategies, macroeconomic trends and the markets in which Offerpad operates.

The forward-looking statements in this Annual Report on Form 10-K are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part I, Item 1A, "Risk Factors" in this Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The forward-looking statements in this Annual Report on Form 10-K are based upon information available to us as of the date of this Annual Report on Form 10-K, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Annual Report on Form 10-K and the documents that we reference in this Annual Report on Form 10-K and have filed as exhibits to this Annual Report on Form 10-K with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Annual Report on Form 10-K.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 4

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**Summary Risk Factors**

Our business is subject to numerous risks and uncertainties, including those described in Part I, Item 1A, "Risk Factors" in this Annual Report on Form 10-K. You should carefully consider these risks and uncertainties when investing in our securities. The principal risks and uncertainties affecting our business include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our business and operating results may be significantly impacted by a number of factors, including general economic conditions, local or regional conditions in the markets in which we operate, mortgage interest rates or down payment requirements or restrictions on mortgage financing availability, the health of the U.S. residential real estate industry and governmental actions that impact us, risks associated with our real estate assets and the ongoing impact of the COVID-19 pandemic;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our limited operating history makes it difficult to evaluate our current business and future prospects and the risk of your investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We operate in a competitive and fragmented industry, and we may not be successful in attracting customers for our products and services or in competing effectively through management of our products or services, including home renovations, which could harm our business, results of operations and financial condition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We have experienced rapid growth since inception, which may not be indicative of future growth, and, if we continue to grow rapidly, we may experience difficulties in managing our growth and expanding our operations and service offerings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our business model and growth strategy depend on our marketing efforts and ability to maintain our brand and attract customers to our platform in a cost-effective manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may be unsuccessful in launching or marketing new products or services, or launching existing products and services into new markets, or may be unable to successfully integrate new offerings into our existing platform, which would result in significant expense and may not achieve desired results;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We have a history of losses since inception, and we may not achieve or maintain profitability in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our business is dependent upon our ability to acquire, accurately value and manage inventory and any decrease in availability of inventory, an ineffective pricing or portfolio management strategy, inaccurate information from prospective sellers or buyers with respect to their homes or ineffective home inspections may adversely affect our business, sales and results of operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Prospective sellers and buyers of homes may choose not to transact online, which could harm our growth prospects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our internal information technology systems may fail or suffer security breaches, loss or leakage of data, and other disruptions, which could disrupt our business or result in the loss of critical and confidential information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We process, store and use personal information and other data, which subjects us to governmental regulation and other legal obligations related to privacy, and violation of these privacy obligations could result in a claim for damages, regulatory action, loss of business, or unfavorable publicity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our ability to compete depends in part on protecting our intellectual property and other propriety information and on maintaining necessary intellectual property licenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We operate in a highly regulated industry and are subject to a wide range of federal, state and local laws, rules and regulations, including licensing and conduct requirements relating to our real estate brokers and brokerage-related businesses and mortgage products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We utilize a significant amount of indebtedness in the operation of our business, and so our cash flows and operating results could be adversely affected by required payments of debt or related interest and other risks of our debt financing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We rely on agreements with third parties to finance our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We face risks relating to our capital structure, including the potential impact of our multi-class structure; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our failure to meet the New York Stock Exchange's continued listing standards could result in a delisting of our Class A common stock.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 5

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**PART I**

**Item 1. Business.**

**Our Mission**

Offerpad's mission is to provide your best way to buy and sell a home. Period. We are a pioneer in using technology-enabled solutions across our digital platform to remake the home selling and buying experience. We aspire to be the leading on-demand real estate solutions provider that offers customers the convenience, control and certainty to solve their housing needs.

**Who We Are**

Offerpad was founded in 2015 to create a better residential real estate experience by combining advanced technology solutions with fundamental industry expertise. We provide streamlined, data driven iBuying and real estate solutions for the on-demand customer. Our digital Solutions Center platform gives users a holistic, customer-centric experience, enabling them to efficiently sell and buy their homes online with streamlined access to ancillary services such as mortgage and title insurance.

Our platform provides a unique dual approach to helping home sellers. In our Express cash offer service, sellers can access our website or mobile application to receive a competitive cash offer for their home within 24 hours and quickly close without the major inconveniences associated with traditional real estate selling. In our Flex listing service offering, we leverage our technology, scale and logistical expertise to renovate and list a seller's home for sale while also typically providing a backup cash offer to the seller, thereby providing optionality of process and certainty of outcome. Our platform provides home buyers the opportunity to browse and tour homes online, get instant access to our listings in certain markets with their mobile devices and submit purchase offers online in a simple process on their own time, with or without an agent. We also offer seamless, integrated access to in-house agents to advise on the purchase of a home as well as access to mortgage services through our in-house mortgage solution, Offerpad Home Loans, or through a third-party lending partner. We believe by offering both Express cash offer and Flex listing services to sellers, and a guided yet flexible and customizable experience to buyers, we have reinvented the home selling and buying experience to meet the digital and on-demand needs of modern consumers.

Prior to the launch of Offerpad, our team had collectively spent many years buying, selling, renting, and renovating tens of thousands of homes. We created the Solutions Center because we learned through experience all the challenges people face when selling and buying a home the traditional way. Sellers are often overwhelmed by the stress of selling – making repairs, determining an appropriate listing price for their home, preparing and then vacating their home for showings, negotiating a deal, finding movers and waiting for a closing date. This process is stressful, expensive, time consuming, antiquated and inconsistent with modern consumer expectations. Buyers also experience significant friction for one of the most important purchase decisions in their lives – they often cannot access and tour homes on their own schedule, are dependent on intermediaries and have to endure lengthy offer submission and closing processes.

Since our founding in 2015 through December 31, 2022, we have transacted on homes representing approximately $9.4 billion of aggregate revenue. We believe that this revenue generation is a testament to how the simplicity and ease of iBuying and digital home sales resonates with our customers. We combine an innovative end-to-end technology platform with the expertise of local market teams to efficiently scale our operations while maintaining a physical presence in our markets that enables us to establish and maintain better relationships with our customers. This allows us to provide a fast and simple real estate experience that our customers value. For example, during the year ended December 31, 2022, we achieved a net promoter score of 70 and 93% Customer Satisfaction Rating based on a survey of approximately 3,400 customers who sold their home to Offerpad during 2022.

As of December 31, 2022, Offerpad operated in over 1,800 cities and towns in 28 metropolitan markets across 16 states. As we expand further into our existing markets, launch new markets, and develop a wide range of new ancillary services, we look forward to bringing our mission of providing your best way to buy and sell a home to even more homeowners and prospective home purchasers across the country.

We are continuously focused on providing a differentiated approach to our customers through various selling, buying and ancillary services in our Solutions Center.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 6

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**Offerpad selling services**

We offer two distinct selling services to our customers. Through our Offerpad Express cash offer service, customers complete a few simple steps and receive a competitive cash offer on their home within 24 hours. Customers choosing an Offerpad cash offer avoid the disruption of showing their homes, select their own closing date with the benefit of extended stay in case their new home is not ready, and enjoy complimentary free local moving. If the customer is represented by a third-party agent, we work directly with such agent in addition to paying the agent's fee. Through our Offerpad Flex listing service offering, our customers essentially dual track a sale by utilizing both our personalized listing services while also typically having a backup cash offer. Customers opting to list with us enjoy the benefits of complimentary list-ready home services, home improvement advances, customized marketing, and dedicated support from our Offerpad Solutions Experts, while listing with confidence knowing they can pivot to our competitive cash offer. When a customer chooses to list their home with our Offerpad Flex listing service, our Solutions Experts represent the customer throughout the process. The customer will either sell their home directly to a buyer or we will purchase the home under our initial cash offer. If a customer sells a home directly to a buyer using our Flex listing service, we earn a service fee, typically as a percent of the sales price of the home. Our Flex listing service offering generates higher margins than our Express cash offer service, but accounted for less than 1% of our total revenue in both 2022 and 2021, although we intend to drive greater roll-out of the Flex listing service offering across our platform.

**Offerpad buying services**

We are also committed to removing the stress and inconvenience associated with purchasing a home. In connection with our Flex listing service offering and through our Solutions Center, prospective buyers have access to our Offerpad Solutions Experts, in-house agents who can advise on the purchase of their home, and our ability to provide access to mortgage services through our in-house mortgage solution or through a third-party lending partner, which streamlines the home loan process for our customers. Buyers are able to visit homes on their own time and utilize digital tools to complete the inspection and closing process. Our customers benefit from a home buying process designed around them, enjoying exclusive buyer benefits including early access to Offerpad homes, savings when bundling multiple Offerpad services, local experts to guide the purchasing process, a dedicated solutions coordinator, and flexibility around their move-in date.

**Ancillary services**

We also offer seamless access to ancillary services through our preferred providers, which currently includes title and escrow services, mortgage solutions to make it easy for buyers to finance their next home, and complimentary free local moving for sellers. The frictionless experience our customers encounter when buying and selling their homes drives customer interest in ancillary services, which provides significant further opportunities for bundling services and enhances our ability to capture additional market share.

Below is a summary of our current ancillary products and services:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Concierge Listing Service: While partnering with Offerpad, the customer will be provided with complementary list-ready services to prepare their home for market, such as carpet cleaning, landscape and pool maintenance, and handyman services. Customers also have the ability to utilize Offerpad's renovation advance program to complete strategic upgrades to maximize the resale value of the home.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Offerpad Home Loans ("OPHL"): We provide access to mortgage services through our in-house mortgage solution, OPHL, or through a third-party lending partner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Bundle Rewards: The Offerpad Bundle Rewards program allows customers to receive multiple discounts when selling and buying a home with Offerpad, and by obtaining their home loan with OPHL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Title and Escrow: To deliver title and escrow closing services, we have a national relationship with a leading title and escrow company, through which we are able to leverage our size and scale to provide exceptional service with favorable economics.

Our primary goal is to be able to offer multiple services tied to the core real estate transaction, which may in the future include stand-alone remodel services, energy efficiency solutions, smart home technology, insurance, moving services and home warranty services, all with the goal of becoming a singular solution for real estate transactions. Generally, the revenue and margin profiles of our ancillary products and services are different from our Express cash offer service that accounts for the vast majority of our revenues, with most ancillary products and services having a smaller average revenue per transaction than our Express cash offer service, but a higher margin.

Our ancillary products and services represented less than 1% of our total revenue in both 2022 and 2021.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 7

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**Our Market Opportunity**

In 2022, roughly $2.3 trillion in value of homes were sold in the U.S. with approximately 5.6 million homes sold for an average home value of approximately $400,000. Despite the large market size, the vast majority of U.S. residential real estate transactions are conducted offline. As digital transactions are transforming every industry, consumers turn to technology for new and improved experiences in their daily lives. Interactions in industries such as commerce, restaurants, healthcare, automotive, and insurance have been drastically altered by digital experiences that offer new levels of convenience, efficiency, and reliability. We believe that the real estate industry is primed for a similar digital transformation as buyers and sellers of homes desire the same type of digital experience they are accustomed to from other industries. Further, we believe that the vast number of real estate brokerages, combined with the fragmentation of market share, contributes to an inconsistent experience for home buyers and sellers, offering opportunities for consolidation and integration. As of 2022, there were approximately 1.6 million licensed real estate agents and more than 100,000 U.S. real estate brokerages, with a single brokerage rarely holding more than 10% in a given market. Today, we typically purchase homes with a price of up to $750,000, which represented a potential addressable market opportunity of approximately $1.3 trillion during 2022.

Separately, through a variety of ancillary service opportunities we believe we will be able to further expand our total addressable market. Vertical integration and product innovation will provide future potential opportunities including expansion of our mortgage and title solutions, as well as entry into other transaction services such as home warranty, homeowners insurance, or remodeling services.

**Our Competitive Strengths**

We believe the following strengths will allow us to maintain and extend our position as a leading technology-enabled real estate solutions platform.

**Proprietary technology platform**

The success of our business is built on the combination of our data collection capabilities, proprietary technology, and team of real estate experts. We utilize machine learning and artificial intelligence to analyze data at various stages throughout our process. Our in-house proprietary data analytics technology continuously collects and synthesizes market data with performance history from our real estate operations, forming a knowledge distillation and feedback loop along the process and enabling us to adjust to the latest market conditions and operate a highly intelligent and automated workflow.

We collect hundreds of data points per home from an array of sources including public records, real estate brokerage transaction histories, private third-party data, and internally developed proprietary data sources. Our proprietary automated valuation and renovation-modeling engine "Offercomp" uses this information to automatically value more than 100,000 properties each year and generate our cash offers based on these data points. Our real estate experts work in tandem with and enhance our technology by providing a final review of the offer. Our proprietary and purpose-built "Helix Go" technology streamlines the renovation process for a purchased home by automating logistics and workflows. Our "Instant access" feature enables buyers in certain markets to enter our homes with the push of a button on their mobile device. This combination of technology, automation and machine learning paired with real estate expertise enhances the accuracy in our underwriting to actual sales prices and improves our unit-level economic performance.

**Operational expertise**

We know how to efficiently manage the logistical challenge of buying, renovating and selling thousands of homes across 28 differentiated markets. Since our inception to December 31, 2022, we have bought and sold in aggregate nearly 70,000 homes and have completed nearly 30,000 home renovations. We optimize our workforce through a mix of internal employees and external contractors and have local project managers that manage the renovation in its entirety. We maintain market-by-market standards to ensure quality, cost, and time efficiency, deploying our own field automation software to enable accurate progress reporting as well as labor and material tracking.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 8

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**Scalable platform, with proven economics and capital efficiency**

We have a leading, scalable and low-cost transaction platform. We have created a pioneering iBuying company and leading on-demand real estate marketplace. Our significant growth relative to our limited capital invested is testament to our efficiency and results driven culture. Since inception, we have focused on improving the unit economics of our model across our markets, with the added benefit of maximizing operational leverage as we scale. A foundation of our strategic approach to growth has been to prove out our business model first, control costs and refine our valuation automation and logistical operations before we scale into additional markets.

**Maximizing inventory turnover and increasing returns on invested capital**

In order to effectively mitigate risk and maximize efficiency of the business, we aim to turn inventory quickly while maintaining our underwritten to actual sales price accuracy. We strive to minimize the number of homes we own for a long period of time, as the holding period of the home is typically a key factor of unit level performance because increased holding costs result in a direct decrease in contribution margin. As we increased our scale and improved our workflow optimization in prior years, our average inventory holding period of homes sold improved from 138 days in 2016 to 95 days in both 2019 and 2020. Our average inventory holding period of homes sold further decreased to 76 days during 2021, which was primarily due to the favorable housing market conditions across our markets in 2021.

During 2022, the residential real estate market conditions were highly volatile, with generally favorable conditions during the first half of the year, shifting to considerable softening in consumer demand for residential real estate during the second half of the year as a result of various macroeconomic factors negatively impacting housing affordability and homebuyer sentiment. Given our focus on risk management, and in response to this softening consumer demand, we adjusted our home purchase criteria through more conservative acquisition underwriting, resulting in higher expected internal rates of return based on current market conditions, and continued to adjust pricing on our inventory to reflect market level trends throughout the second half of 2022. These actions resulted in a significant reduction in our home acquisition pace to allow us to manage overall inventory growth, which led to the average holding period of homes sold increasing to 101 days during 2022, which is consistent with our expected average inventory holding period and our historical norm. As our overall inventory mix shifts and includes a lower composition of newer acquired homes, our average inventory holding period generally increases. As a result, and given our reduction in home acquisition pace, we anticipate our average inventory holding period will continue to increase in early 2023.

**Customer satisfaction**

Our Solutions Center was designed with the commitment to providing the best possible real estate experience. The flexibility of our offerings has enabled us to build a strong, well-respected brand in the eyes of our customers.

**Proven management team with extensive digital, real-estate and finance experience**

Our founder and management team have decades of experience in transactional real estate operations and property valuation, digital marketplaces, business intelligence and analytics and finance. We believe our operating success is a result of combining our detailed market-to-market real estate expertise with strong technology and data analytics experience and a keen awareness of the evolving digital demands of our customers. Our broad-based team has been able to leverage their experience at technology companies like Amazon, Doordash, GoDaddy, Intel and Zappos, real estate companies like AV Homes, Progress Residential and Taylor Morrison, and financial institutions such as Citi and Morgan Stanley.

**Our Growth Strategies**

We believe we have significant untapped growth potential and intend to achieve our goals through the following strategies:

**Grow share in existing markets**

We plan to expand our share in our existing markets. As of December 31, 2022, we offer our services in 28 markets in the United States, which tend to share median price points of less than $550,000 and are among the top 100 metropolitan statistical areas (MSAs) in terms of annual residential real estate transactions. In 2022 and 2021, the median prices of the homes we sold were approximately $350,000 and $300,000, respectively. We intend to further increase our market penetration in these markets through additional brand marketing and improving customer awareness of our offerings, which we anticipate will increase our market share. Additionally, we intend to continue to evaluate adding to our catalog of offerings in order to better support our customers and capture additional share.

**Opportunistic expansion into new markets**

Since our founding, we have been strategic in our approach to growing our market footprint. We focus on geographic diversification across high population growth cities with affordable median sales prices and increasing employment characteristics. Looking forward, we are applying rigorous criteria to identify which additional MSAs we plan to expand into in the future. As part of our planned expansion, we have given strategic consideration to which markets we would plan to open

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first and what the resource requirements for establishing a presence in those markets would be. We assess each MSA on several factors including historical housing transactions, employment and population growth, median home sales price, housing supply and demand characteristics, seasonality, market risk rating, and competitor presence. We believe geographic proximity to our existing markets will allow us to leverage our in place physical presence and applicable local expertise, though we intend to also evaluate MSAs without geographic proximity to our existing markets. While we intend to be flexible in assessing market entry points, we will generally look to expand into new markets with qualities similar to our existing markets, including median price point, annual transaction count, as well as strong presence of new homebuilders. We believe the scale and versatility of our platform will allow us to continue to expand into new markets, with our barriers to entry primarily being access to adequate capital needed to expand our operations and the tendency of consumers in a given market to adopt our digital real estate offerings. Given the recent volatility in the residential real estate market conditions, we currently do not anticipate expanding into any new markets in the first half of 2023 and expect to re-evaluate expansion plans in the second half of the year.

**Increase advertising and drive brand awareness**

Even though historically our ability to invest in advertising has been limited due to our focus on capital efficiency we have a proven history of effective local advertising to drive inbound seller inquiries as well as local and national distribution of our active listings for resale. Going forward we intend to focus on increasing our local advertising efforts through a variety of channels as well as establish a broader national advertising presence to grow brand awareness and brand affinity as we scale.

**Grow Offerpad Flex Listing Service Offering**

While our Flex listing service offering has already enabled many customers to conveniently list with us with the confidence that they can typically take advantage of a backup cash offer, we plan to further increase awareness of this service through more product centric marketing. Our goal is to expand the number of our customers selecting this service in both our existing and our future markets, enabling us to capture more customers that want the best of both iBuying and traditional real estate.

**Add ancillary services**

Our product expansion strategy focuses on capitalizing on ancillary service opportunities beyond our current mortgage and title service offerings in order to offer multiple services tied to the core real estate transaction, allowing our customers to bundle and save. In the mid-term, we anticipate offering additional transaction services, including home warranty and insurance, as well as an entry into home personalization through stand-alone remodel services. Finally, in the long-term, we intend to seek to provide a personal, efficient, and hassle-free full home ownership partnership with offerings such as energy efficiency and smart home capabilities.

**Expand relationships with home buyers**

We continue to pursue opportunities that enable us to grow our service offerings, and have recently begun offering a program that allows cash buyers and single-family rental companies an opportunity to purchase homes directly from the homeowner, matching cash buyers with sellers. We expect this program will allow us to help more homeowners sell their home, while also expanding our ability to reach more customers.

**Marketing**

Our sales and marketing efforts utilize a multichannel approach, including paid advertising, earned media and partnerships, with a focus on efficiency and low-cost growth. As our market footprint has expanded, we have optimized our marketing strategy with advanced audience segmentation methodologies, improved targeting, and attribution modeling. Going forward we will focus on increasing our local advertising efforts through a variety of channels as well as establishing a broader national advertising presence to grow brand awareness and brand affinity. Additionally, we plan to start leveraging broad reach channels that allow us to responsibly scale brand awareness.

**Our Competition**

The U.S. residential real estate market is highly fragmented and non-integrated. As of 2022, there were over 100,000 U.S. real estate brokerages in the United States, with a single brokerage rarely holding more than 10% share in any market. Additionally, we believe the vast majority of U.S. real estate sales are still being conducted through traditional analog methods, with only a small portion of the real estate market having transitioned to the technology driven, digital method that we offer. We compete with other instant buyers, cash offer providers and online real estate platforms, as well as institutional purchasers of residential real estate; however, we primarily compete with local real estate brokerages and the traditional way of conducting home sales.

We believe that companies in our industry compete primarily on the basis of customer experience, available offerings, and price. Although we face competition through both traditional and non-traditional forms of buying and selling residential real estate, we believe our technology-enabled solutions combined with our extensive real estate expertise allows us to provide a complete solution and positive experience to one of life's most significant transactions.

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**Human Capital Resources**

**Overview**

We believe that we have a talented, motivated and dedicated team, and are committed to supporting the development of all of our team members. As of December 31, 2022, we employed approximately 900 people, nearly all on a full-time basis. None of our employees are represented by a labor union or covered by collective bargaining agreements. We believe we have strong and positive relations with our employees. We also engage numerous consultants and contractors to supplement our permanent workforce, primarily to assist with renovating our homes.

**Our Culture and Core Values**

Maintaining a strong company culture is critical to our team and is supported through various employee engagement activities. Our culture and passion for what we are building is reflected in the following core values:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Homes not houses. A house is property, but a home is uniquely personal – a place full of emotion and memories. We help people move freely so they can live their best lives, wherever "home" happens to be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Freedom first. Providing home buyers and sellers freedom is our passion. No one should ever feel stuck. We provide convenience, control, and certainty in all we do.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Every day matters. We operate with urgency in pursuit of delivering the best customer experience in the industry. There's no room for hesitation – we count the days with the goal to use less.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Results rule. We get things done. We celebrate doers. When we see a problem, we solve it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Embrace our roots. We know homes. We understand the people in those homes at a "living room" level. We leverage our past to provide your best way to buy and sell a home.

**Workplace Practices and Policies**

We are committed to providing a workplace free of harassment or discrimination based on race, color, religion, sex, sexual orientation, gender identity, national origin, disability, veteran status, caste or other legally protected characteristic. We are an equal opportunity employer committed to inclusion and diversity.

**Diversity, Equity, Inclusion and Belonging**

We believe that each employee's uniqueness and individuality strengthen our collective whole. By seeking out diverse perspectives and valuing individual input, we create a sense of belonging.

In fostering a diverse, equitable and inclusive environment, we are committed to hiring inclusively, providing training and development opportunities, and ensuring equitable pay for employees, and are continuing to focus on increasing diverse representation at every level of the Company.

**Compensation and Employee Benefits**

To attract and retain top talent, we offer our employees a broad range of company-paid benefits and highly competitive compensation packages. Our employees are eligible for medical, dental and vision insurance, a savings/retirement plan, life and disability insurance, various wellness programs and tuition reimbursement, along with other optional benefits designed to meet individual employee needs.

**Health and Safety**

We are committed to supporting our employees' well-being and safety while they are at work and in their personal lives. We took a wide variety of measures to protect the health and well-being of our employees, suppliers, customers and third-party contractors and consultants during the COVID-19 pandemic and are now supporting employees in shifting to return to office and/or hybrid arrangements.

**Training and Talent Development**

To support our strong company culture, we offer a wide range of training and development opportunities, including new employee orientation through our Offerpad University training sessions, which cover a range of topics including company values and culture, and other training programs that support employee growth and development.

**Intellectual Property**

We rely on a variety of federal, state and common law rights to protect our intellectual property. We also rely on a combination of trademarks, domain names, patents, copyrights, trade secrets, contractual provisions and restrictions on access and use to establish and protect our proprietary rights.

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As of December 31, 2022, we have 15 total IP registrations and pending applications including: four registered U.S. trademarks, three foreign registered trademarks, six pending U.S. trademark applications and two U.S. issued copyright registrations. Our trademarks registrations and applications include "Offerpad" and the Offerpad logo.

We are the registered holder of a variety of domain name registrations, including "offerpad.com".

In addition to the protection provided by our intellectual property rights, we enter into confidentiality and proprietary rights agreements with certain of our employees, consultants, contractors and business partners. Certain of our employees and contractors are also subject to invention assignment agreements. We further restrict the use of our proprietary technology and intellectual property through provisions in both our general and product-specific terms of use on our website.

**Government Regulation**

We operate in highly regulated businesses through a number of different channels across the United States. As a result, we are currently subject to a variety of, and may in the future become subject to additional, federal, state and local statutes and regulations in various jurisdictions (as well as judicial and administrative decisions and state common law), which are subject to change at any time, including laws regarding the real estate and mortgage industries, settlement services, insurance, mobile and internet based businesses and other businesses that rely on advertising, as well as data privacy and consumer protection laws, and employment laws.

In particular, the advertising, sale, and financing of homes is highly regulated by states in which we do business, as well as the U.S. federal government. Regulatory bodies include the Consumer Financial Protection Bureau ("CFPB"), the Federal Trade Commission ("FTC"), the Department of Justice ("DOJ"), the Department of Housing and Urban Development ("HUD"), and various state licensing authorities, various state consumer protection agencies, and various state financial regulatory agencies. We are subject to compliance audits of our operations by many of these authorities. For a discussion of the various risks we face from regulation and compliance matters, see "Risk Factors—Risks Related to Our Business and Industry".

Additionally, laws, regulations, and standards covering marketing and advertising activities conducted by telephone, email, mobile devices, and the internet, may be applicable to our business, such as the Telephone Consumer Protection Act ("TCPA"), the Telemarketing Sales Rule, the CAN-SPAM Act, and similar state consumer protection laws. Through our various subsidiaries, we buy and sell homes, provide real estate brokerage services, and provide other product offerings, which results in us receiving or facilitating transmission of personally identifiable information. This information is increasingly subject to legislation and regulation in the United States, such as the California Consumer Privacy Act. These laws, and other similar privacy laws and regulations, are generally intended to protect the privacy and security of personal information, including customer Social Security Numbers and credit card information that is collected, processed and transmitted. These laws also can restrict our use of this personal information for other commercial purposes. For a more detailed discussion of the risks we face in connection with privacy regulations, see "Risk Factors—Risks Related to Our Intellectual Property and Technology—We process, store and use personal information and other data, which subjects us to governmental regulation and other legal obligations related to privacy, and violation of these privacy obligations could result in a claim for damages, regulatory action, loss of business, or unfavorable publicity."

In order to provide the broad range of products and services that we offer customers, certain of our subsidiaries maintain real estate brokerage licenses, and we may in the future apply for additional licenses as our business grows and develops. These entities are subject to stringent state and federal laws and regulations, including, but not limited to, the Real Estate Settlement Procedures Act ("RESPA") and those administered by applicable state departments of real estate, banking, and consumer services, and to the scrutiny of state and federal government agencies as licensed businesses as noted above. We may be subject to additional local, state and federal laws and regulations governing residential real estate transactions, including those administered by HUD, and the states and municipalities in which we transact. For certain licenses, we are required to designate individual licensed brokers of record, qualified individuals and control persons. Certain licensed entities also are subject to routine examination and monitoring by the CFPB (for mortgages) and/or state licensing authorities. As of December 31, 2022, Offerpad Brokerage, LLC, Offerpad Brokerage "FL", LLC, and Offerpad Brokerage CA, Inc. hold real estate brokerage licenses in certain of our markets and certain other states.

We plan to continue providing mortgage services in the future, either through our in-house mortgage solution, or through a third-party lender. Mortgage products are regulated at the state level by licensing authorities and administrative agencies, with additional oversight from the CFPB and other federal agencies. These laws generally regulate the manner in which lending and lending-related activities are marketed or made available to consumers, including, but not limited to, advertising, finding and qualifying applicants, the provision of consumer disclosures, payments for services, and record keeping requirements; these laws include, at the federal level, the RESPA, the Fair Credit Reporting Act (as amended by the Fair and Accurate Credit Transactions Act), the Truth in Lending Act (including the Home Ownership and Equity Protection Act of 1994), the Equal Credit Opportunity Act, the Fair Housing Act, the Gramm-Leach-Bliley Act, the Electronic Fund Transfer Act, the Servicemembers Civil Relief Act, the Military Lending Act, the Homeowners Protection Act, the Home Mortgage Disclosure Act, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, the Federal Trade Commission Act, the Dodd

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Frank Wall Street Reform and Consumer Protection Act of 2010, the Bank Secrecy Act (including the Office of Foreign Assets Control and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act), the TCPA, the Mortgage Acts and Practices Advertising Rule (Regulation N), the CARES Act, all implementing regulations, and various other federal, state and local laws. The CFPB also has broad authority to enforce prohibitions on practices that it deems to be unfair, deceptive or abusive. Additionally, state and local laws may restrict the amount and nature of interest and fees that may be charged by a lender or mortgage broker, impose more stringent privacy requirements and protections for servicemembers, and/or otherwise regulate the manner in which lenders or mortgage brokers operate or advertise.

**Seasonality**

The residential real estate market is seasonal and varies from market to market. Typically, the greatest number of transactions occur in the spring and summer, with fewer transactions occurring in the fall and winter. Our financial results, including revenue, margins, inventory, and financing costs, have historically had seasonal characteristics generally consistent with the residential real estate market, a trend we expect to continue in the future.

**Corporate History and Background**

Offerpad Solutions Inc. was formed on September 1, 2021 through a business combination (the "Business Combination") with Supernova Partners Acquisition Company, Inc. ("Supernova"). In connection with the closing of the Business Combination, Supernova changed its name to Offerpad Solutions Inc. The Business Combination was accounted for as a reverse recapitalization.

**Available Information**

We file our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and other information electronically with the Securities and Exchange Commission ("SEC"). Our SEC filings are available to the public on the SEC's website at www.sec.gov. At our corporate website, www.offerpad.com, and our investor relations website, investor.offerpad.com, we make available free of charge a variety of information for investors, including copies of these reports, and any amendments to these reports, as soon as reasonably practicable after we electronically file that material with or furnish it to the SEC. The information found on our website is not part of this or any other report we file with, or furnish to, the SEC.

**Item 1A. Risk Factors.** 

Investing in our securities involves risks and uncertainties. Before you make a decision to buy our securities, you should carefully consider the specific risks described below. If any of these risks actually occur, it may materially harm our business, financial condition, liquidity and results of operations. As a result, the market price of our securities could decline, and you could lose all or part of your investment. Additionally, the risks and uncertainties described in this Annual Report on Form 10-K are not the only risks and uncertainties that we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may become material and adversely affect our business. The following discussion should be read in conjunction with other information set forth in this Annual Report, including Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 8, Financial Statements and Supplementary Data.

**Risks Related to Our Business and Industry**

**Our business and operating results may be significantly impacted by general economic conditions, the health of the U.S. residential real estate industry and risks associated with our real estate assets.**

Our success depends, directly and indirectly, on general economic conditions, the health of the U.S. residential real estate industry, particularly the single-family home resale market, and risks relating to the ownership of residential real estate, many of which are beyond our control. A number of factors have in the past, and could in the future adversely affect our business, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•downturns in the U.S. residential real estate market — both seasonal and cyclical — in particular with respect to the single-family home resale market and the markets in which we operate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in national, regional, or local economic, demographic or real estate market conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the continuing impact of the COVID-19 pandemic and any future pandemic, including with respect to buying and selling trends in the residential real estate market and potential governmental or regulatory changes or requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•slow economic growth or recessionary or inflationary conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increased levels of unemployment or declining wages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•declines in the value of residential real estate or the pace of home appreciation, or the lack thereof;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•illiquidity in residential real estate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•overall conditions in the housing market, including macroeconomic shifts in demand, and increases in costs for homeowners such as property taxes, homeowners' association fees and insurance costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•low levels of consumer confidence in the economy in general or the U.S. residential real estate industry in particular;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•low home inventory levels or lack of affordably priced homes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increased mortgage interest rates or down payment requirements or restrictions on mortgage financing availability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increases in household debt levels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•volatility and general declines in the stock market;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•federal, state, or local legislative or regulatory changes that would negatively impact owners or potential purchasers of single-family homes or the residential real estate industry in general, such as the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), which limited deductions of certain mortgage interest expenses and property taxes; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•natural disasters, such as hurricanes, windstorms, tornadoes, earthquakes, wildfires, floods, hailstorms and other events that disrupt local, regional, or national real estate markets.

**Our limited operating history makes it difficult to evaluate our current business and future prospects and the risk of your investment.**

Our business model and the technology used in support thereof is still early in its adoption and is difficult to compare to the business models of other market participants in the U.S. residential real estate industry. We launched our first market in 2015 and do not have a long history operating as a commercial company. Our operating results are not predictable and our historical results may not be indicative of our future results. It may be difficult for you to evaluate our potential future performance without the benefit of established long-term track records from companies implementing a similar business model. Few peer companies exist and none have yet established long-term track records that might assist us in predicting whether our business model and strategy can be implemented and sustained over an extended period of time. We may encounter unanticipated problems as we continue to refine our business model and may be forced to make significant changes to our anticipated sales and revenue models to compete with our competitors' offerings, which may adversely affect our results of operations and profitability.

**We operate in a competitive and fragmented industry, and we may not be successful in attracting customers for our products and services, which could harm our business, results of operations and financial condition.**

We operate in a competitive and fragmented industry, and we expect competition to continue to increase. We believe that our ability to compete depends upon many factors both within and beyond our control, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the financial competitiveness of our products for customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the volume of our customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the timing and market acceptance of our products, including iBuying, and new products offered by us or our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our selling and marketing efforts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our customer service and support efforts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our continued ability to develop and improve our technology to support our business model;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•customer adoption of our platform as an alternative to traditional methods of buying and selling residential real estate; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our brand strength relative to our competitors.

Our business model depends on our ability to continue to attract customers to our digital platform and the products and services we offer, and enhance their engagement with our products in a cost-effective manner. New entrants continue to join our market categories. Our existing and potential competitors include companies that operate, or could develop, national or local real estate businesses offering services, including real estate brokerage services, mortgage, and title insurance and escrow services, to home buyers or sellers.

Many of our competitors have well-established national reputations and may market similar products and services. Several of these companies are larger than us and have significant competitive advantages, including better name recognition, higher financial ratings, greater resources, lower cost of funds and additional access to capital, and more types of offerings than we currently do. These companies may also have higher risk tolerances or different risk assessments than we do. In addition, these competitors could devote greater financial, technical and other resources than we have available to develop, grow or improve their businesses. If we are not able to continue to attract customers to our platform, products and services and achieve greater scale in operations, our business, results of operations and financial condition will be harmed.

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**The COVID-19 pandemic and attempts to contain it adversely impacted our business, results of operations and financial condition, and may continue to adversely impact our business, results of operations and financial condition in the future.** 

The COVID-19 pandemic created significant worldwide volatility, uncertainty and disruption of the residential real estate industry and adversely impacted our business, results of operations and financial condition. Such adverse impact may continue in the future. The extent and duration of the impact of COVID-19 on our business will depend on, among other things, the emergence of new or worse strains of COVID-19 and any new limitations imposed by governmental authorities on processes and procedures attendant to residential real estate transactions, such as home inspections and appraisals and in-person showings and county recordings, as well as COVID-19's overall impacts on the U.S. economy. We believe that consumer spending on real estate transactions has been, and may continue to be, adversely affected by a number of macroeconomic factors related to COVID-19, including but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increased unemployment rates and stagnant or declining wages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•decreased consumer confidence in the economy and recessionary conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•volatility and declines in the stock market and lower yields on individuals' investment portfolios; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•more stringent mortgage financing conditions, including increased down payment requirements.

In addition, new pandemics may emerge in the future that could have similar negative effects on the real estate industry and macroeconomic conditions generally.

**We have experienced rapid growth since inception, which may not be indicative of our future growth, and, if we continue to grow rapidly, we may experience difficulties in managing our growth effectively and expanding our operations and service offerings.**

We have experienced rapid growth and demand for our products and service offerings since inception. We expect that, in the future, even if our revenue increases, our rate of growth may decline. In any event, we will not be able to grow as fast or at all if we do not, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increase the number of customers using our platform;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•acquire sufficient inventory at an attractive cost and quality to meet the increasing demand for our homes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•successfully turnover inventory in an efficient manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increase customer conversion;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increase our market share within existing markets and expand into new markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increase our brand awareness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•obtain and retain adequate availability of financing sources; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•obtain necessary capital to meet our business objectives.

Furthermore, in order to preserve our market position, we intend to expand into new markets and launch new products or services in existing or new markets more quickly than we would if we did not operate in such a highly competitive industry. Expanding into new markets may prove to be challenging, as some markets may have very different characteristics than the markets we currently operate in, some of which may be unanticipated or unknown to us. These differences may result in greater pricing inaccuracies, as well as higher capital requirements, inventory hold times, repair costs and transaction costs that may result in those markets being less profitable for us than the ones in which we currently operate.

**We have had a history of losses since our inception, and we may not achieve or maintain profitability in the future.**

We generated net income during the year ended December 31, 2021. However, we incurred net losses during the year ended December 31, 2022 and each year from inception through December 31, 2020, and may incur additional losses in the future. We had an accumulated deficit of $280.7 million and $132.1 million as of December 31, 2022 and 2021, respectively. We expect to continue to make future investments in developing and expanding our business, including technology, recruitment and training, marketing, and pursuing strategic opportunities. These investments may not result in increased revenue or growth in our business. Additionally, we may incur significant losses in the future for a number of reasons, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our inability to grow market share in our existing markets or any new markets we may enter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our expansion into new markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•declines in U.S. residential real estate transaction volumes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increased competition in the U.S. residential real estate industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in our fee structure or rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our failure to accurately price homes we acquire or changes to resale prices during the time homes are in inventory;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our failure to realize anticipated efficiencies through our technology and business model;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•costs associated with enhancements, or new offerings of our products and services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•failure to execute our growth strategies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increased marketing costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•lack of access to housing market data that is used in our pricing models at reasonable cost;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•hiring additional personnel to support our overall growth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•loss in value of real estate or potential impairments in the value of our assets due to changes in market conditions in the area in which real estate or assets are located;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increases in costs associated with holding our real estate inventories, including financing costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the availability of debt financing and securitization funding to finance our real estate inventories; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•unforeseen expenses, difficulties, complications and delays, and other unknown factors.

Accordingly, we may not be able to achieve or maintain profitability and we may continue to incur significant losses in the future. Moreover, as we continue to invest in our business, we expect expenses to continue to increase in the near term. These investments may not result in increased revenue or growth in our business. If we fail to manage our losses or to grow our revenue sufficiently to keep pace with our investments and other expenses, our business will be harmed and it may also impact our access to funding and liquidity sources. In addition, as a public company, we have incurred and expect to continue to incur significant legal, accounting and other expenses that we did not incur as a private company.

Because we incur substantial costs and expenses from our growth efforts before we receive any incremental revenues with respect to those investments, we may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in an increase in revenues to offset these expenses, which would further increase our losses, and which could have a material adverse effect on our business and financial condition.

**Our business is dependent upon our ability to accurately value and manage inventory and an ineffective pricing or portfolio management strategy may have an adverse effect on our business, sales and results of operations.**

We appraise and price the homes we buy and sell using in-house proprietary data analytics technology, which continuously collects and synthesizes market data with performance history from our real estate operations, forming a knowledge distillation and feedback loop along the process and enabling us to operate a highly intelligent and automated workflow. This assessment includes estimates on time of possession, market conditions, renovation and holding costs, and anticipated resale proceeds. Conversion rates and customer satisfaction may be negatively impacted if valuations are too low and/or fees are too high. Additionally, following our acquisition of a home, we may need to decrease our anticipated resale price for that home if we discover defects or other conditions requiring remediation or impacting the value of the home that were unknown to us at the time of acquisition. Shortages in building supplies, supply chain disruptions, and shortages and disruptions in the availability of third-party labor can also significantly delay our ability to renovate and resell homes in a timely manner. Moreover, these risks may be heightened when we expand into new markets where we may not have similar levels of knowledge and experience as we do in the markets where we currently operate. As a result of these factors, we may be unable to acquire or sell inventory at attractive prices or to finance and manage inventory effectively, and accordingly our revenue, gross margins and results of operations would be affected, which could have a material adverse effect on our business, financial condition and results of operations.

**Prospective sellers and buyers of homes may choose not to transact online, which could harm our growth prospects.**

Our success depends on our ability to attract customers who have historically purchased homes through more traditional channels. The online market for homes is significantly less developed than the online market for other goods and services in industries such as commerce, healthcare, insurance, books, music, travel and other consumer products and accounts for a small percentage of total annual U.S. residential real estate transactions. If this market does not gain widespread acceptance, our business will suffer. Furthermore, we may have to incur significantly higher and more sustained advertising and promotional expenditures or offer more incentives than we currently anticipate in order to attract consumers to our platform and convert them into sellers or buyers. If the online market for residential real estate does not continue to develop and grow, our business will not grow and our business, financial condition and results of operations would be materially and adversely affected.

**Declining real estate valuations could result in recording impairment charges, and property values may decline between our offer to purchase a home and the closing of such home, which could adversely affect our financial condition and operating results.**

We are subject to risks inherent to declines in real estate valuations. For example, home prices can be volatile, and the values of our inventory may fluctuate significantly. As a result, we have in the past, and may in the future, incur impairment charges due to changes in market conditions or economic sentiment. We periodically review the value of our properties to determine

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whether their value, based on market factors and generally accepted accounting principles, has permanently decreased such that it is necessary or appropriate to take an impairment loss in the relevant accounting period. Such a loss would cause an immediate reduction of net income in the applicable accounting period and would be reflected in a decrease in our balance sheet assets. For example, in the year ended December 31, 2022, we recognized $93.8 million of inventory impairment losses. Even if we do not determine that it is necessary or appropriate to record an impairment loss, a reduction in the intrinsic value of a property would manifest over time through reduced income from the property as evidenced by its resale value and would therefore affect our earnings and financial condition.

Additionally, the time between an offer to purchase a home and the closing of such transaction can vary from weeks to several months, depending on the needs of our customers. In the interim period, there can be adverse impacts on the value or liquidity profile of the home. We may not be able to or wish to renegotiate or cancel a contract because doing so would negatively impact customer satisfaction and our brand, and potentially subject us to loss of our earnest money deposit or litigation. In the event the value of such homes declines significantly, we could experience losses, which in the aggregate could be detrimental to our business and results of operations.

**Our business is dependent upon our ability to expeditiously sell inventory. Failure to expeditiously sell our inventory could have an adverse effect on our business, sales and results of operations. Holding homes in inventory exposes us to risks, such as increased holding costs and the risks of declining real estate valuations.**

Our purchases of homes are based in large part on our estimates of projected demand. If actual sales are materially less than our forecasts, we would experience an over-supply of inventory. An over-supply of home inventory will generally cause downward pressure on our liquidity, sales prices and margins and increase our average days to sale. Our inventory of homes purchased has typically represented a significant portion of total assets. Having such a large portion of our total assets in the form of non-income producing homes inventory for an extended period of time subjects us to significant holding costs, including financing expenses, maintenance and upkeep expenses, insurance expenses, property tax expenses, homeowners' association fees, utility fees and other expenses that accompany the ownership of residential real property and increased risk of depreciation of value, in addition to risks related to declining real estate valuations. If we have excess inventory or our average days to sale increases, as occurred during the year ended December 31, 2022, our liquidity and the results of our operations will be adversely affected due to our inability to sell such inventory at prices that allow us to meet margin targets or to recover our costs.

**Our business is concentrated in certain geographic markets, and local or regional conditions, including economic downturns, severe weather, catastrophic occurrences or other disruptions or events may materially adversely affect our financial condition and results of operations.**

While our business is spread across 28 metropolitan markets in the United States as of December 31, 2022, a substantial amount of our revenue is generated in certain geographic markets. For the years ended December 31, 2022 and 2021, approximately 49% and 61% of our revenue, respectively, was generated from our top five markets by revenue during 2022, which consisted of Phoenix, Atlanta, Tampa, Houston and Orlando. As a result of this concentration, local and regional conditions in these markets – including those arising from COVID-19's impacts – may differ significantly from prevailing conditions in the United States or other parts of the country. Any unforeseen events or circumstances that negatively affect these areas could materially adversely affect our revenues and profitability. These risks include possible declines in the value of real estate; risks related to general and local economic conditions; demographic and population shifts and migration; possible lack of availability of mortgage funds; overbuilding; extended vacancies of properties; increases in competition, property taxes and operating expenses; changes in zoning laws; increased labor costs; unemployment; costs resulting from the clean-up of, and liability to third parties for damages resulting from, environmental problems; casualty or condemnation losses; and uninsured damages from floods, hurricanes, earthquakes or other natural disasters.

In addition, our top markets are primarily larger metropolitan areas, where home prices and transaction volumes are generally higher than other markets in the United States. To the extent people migrate outside of these markets due to lower home prices or other factors, and this migration continues to take place over the long-term, then the relative percentage of residential housing transactions may shift away from our historical top markets where we have generated most of our revenue. If we are unable to effectively adapt to any shift, including failing to increase revenue from other markets, then our financial performance may be harmed.

**We may be unsuccessful in launching new product and service offerings or pursuing expansion of existing product and service offerings into new markets, which could result in significant expense and may not achieve the desired results.**

We regularly evaluate expanding our products into new markets or launching new service offerings in existing or new markets and plan to expand our markets significantly in the future. Any expansion or new offering requires significant expenses and the time of our key personnel, particularly at the outset of the process, and our new service offerings, and expansion of our Flex listing service platform may not result in the customer conversion or profitability that we expect. We typically experience increased losses in new markets as we adjust to competitive environments with which we are unfamiliar and invest to build our brand presence within those markets. Our plans to expand and deepen our market share in our existing markets and expand into

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additional markets are subject to a variety of risks and challenges. These risks and challenges include the varying economic and demographic conditions of each market, competition from local and regional residential brokerage firms, variations in transaction dynamics, and pricing pressures. We cannot assure you that we will be able to increase revenues and create business model efficiencies in new markets in the manner we have in our more mature existing markets.

Housing markets and housing stock in different areas can vary widely and certain markets may be more adaptable to our current business model than others. As we continue to expand, we may launch our products or services in markets that prove to be more challenging for our business model. As we expand from markets with a relatively new and homogeneous housing stock to markets with older and more diverse housing stock, we will have to adapt our business and operations to local conditions. The valuation technologies and systems that we currently use may not be as effective at accurately valuing homes in markets with older and more diverse housing stock. In addition, homes that we purchase in markets with relatively older housing stock may require more capital expenditures on improvements and repairs. We may also expand into markets with higher average home prices and fewer available homes within our target price range. If we are unable to adapt to these new markets and scale effectively, our business and results of operations may be adversely affected.

New markets and new product or service offerings may also subject us to new regulatory environments, which could increase our costs as we evaluate compliance with the new regulatory regime. Notwithstanding the expenses and time devoted to expanding an existing product or service offering into a new market or launching a new product offering, we may fail to achieve the financial and market share goals associated with the expansion. If we cannot manage our expansion efforts efficiently, our market share gains could take longer than planned and our related costs could exceed our expectations. In addition, we could incur significant costs to seek to expand our market share, and still not succeed in attracting sufficient customers to offset such costs.

**Our business model and growth strategy depend on our marketing efforts and ability to maintain our brand and attract customers to our platform in a cost-effective manner.**

Our long-term success depends in part on our ability to continue to attract more buyers and sellers to our platform in each of our markets. We believe that an important component of our growth will be increased traffic to, and use of, our website and mobile application by potential customers. Our marketing efforts may not succeed for a variety of reasons, including changes to search engine algorithms, ineffective campaigns across marketing channels, limited experience in new marketing channels and any technical difficulties customers may experience using our applications. External factors beyond our control may also affect the success of our marketing initiatives, such as filtering of our targeted communications by email servers, buyers and sellers failing to respond to our marketing initiatives, and competition from third parties. Any of these factors could reduce the number of customers coming to our platform. Our business model relies on our ability to scale rapidly and to decrease incremental customer acquisition costs as we grow. If we are unable to recover our marketing costs through increases in customer traffic and in the number of transactions by users of our platform, or if our broad marketing campaigns are not successful or are terminated, it could have a material adverse effect on our growth, results of operations and financial condition.

We also believe that the brand identity that we have developed is a significant factor in the success of our business, and maintaining and enhancing the "Offerpad" brand is critical to maintaining and expanding our customer base and current and future partners. Failure to promote or maintain our brand, or incurring excessive costs in this effort, could adversely affect our business, operating results and financial condition.

**Reductions in the availability of mortgage financing provided by government agencies, changes in government financing programs and an increase in mortgage interest rates has decreased and could continue to decrease our customers' ability or desire to obtain financing and adversely affect our business or financial results.**

The secondary market for mortgage loans continues to primarily desire securities backed by Fannie Mae, Freddie Mac or Ginnie Mae, and we believe the liquidity these agencies provide to the mortgage industry is important to the housing market. Any significant change regarding the long-term structure and viability of Fannie Mae and Freddie Mac could result in adjustments to the size of their loan portfolios and to guidelines for their loan products. Moreover, as we expand into higher cost markets or target higher-priced homes, home buyers, and accordingly demand for our homes and services, may be more acutely affected by these factors. Additionally, a reduction in the availability of financing provided by these institutions could adversely affect interest rates, mortgage availability and sales of new homes and mortgage loans.

During the year ended December 31, 2022, in response to inflationary pressures, the Federal Reserve Board implemented a series of increases to its benchmark interest rate. As a result, long-term mortgage interest rates rose during the year, with the average thirty-year fixed mortgage rate peaking at over 7% in late 2022, the highest level since the early 2000s. When interest rates increase, the cost of owning a home increases, which will likely reduce the number of potential home buyers who can obtain mortgage financing and affect the prices home buyers may be willing to pay for homes. During the second half of 2022, consumer demand for residential real estate softened considerably, due, in part, to the sudden and significant increase in mortgage interest rates since early 2022 and, if mortgage financing remains less available to home buyers either due to

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continued elevated interest rates or further increases in interest rates or a general tightening of credit conditions, it could result in a further decline in the demand for our homes and the services offered by our platform.

**The residential real estate market is subject to seasonality, and our operating results are likely to fluctuate on a quarterly and annual basis.**

We expect our revenue and results of operations to vary significantly from period to period in the future, based in part on, among other things, consumers' home buying patterns. The residential real estate market is seasonal, with greater demand from home buyers in the spring and summer, and typically weaker demand in late fall and winter, resulting in fluctuations in the quantity, speed and price of transactions on our platform. We expect our financial results and working capital requirements to reflect seasonal variations over time, although our growth and market expansion have obscured the impact of seasonality in our historical financials to date.

**If we do not innovate or provide customers with an efficient and seamless transaction experience, our business could be harmed.**

The industry for residential real estate transaction services, technology, information marketplaces and advertising is dynamic, and the expectations and behaviors of customers and professionals shift constantly and rapidly. Our success depends on our continued innovation to provide new, and improve upon existing, products and services that make real estate transactions faster, easier and less stressful for our customers. The success of our business may also depend on our ability to successfully integrate additional ancillary services into our platform, including renovation, insurance and home warranty services. As a result, we must continually invest significant resources in research and development to improve the attractiveness and comprehensiveness of our products or services, enable smoother and more efficient real estate transactions, adapt to changes in technology and support new devices and operating systems. Changes or additions to our products or services may not attract or engage our customers, and may reduce confidence in our products or services, negatively impact the quality of our brand, upset other industry participants, expose us to increased market or legal risks, subject us to new laws and regulations or otherwise harm our business. Furthermore, if we are unable to successfully anticipate or keep pace with industry changes and provide products or services that our customers want to use, on the devices they prefer, then those customers may become dissatisfied and use our competitors instead. If we are unable to continue offering high-quality, innovative products, we may be unable to attract additional customers and real estate partners or retain our current customers and real estate partners, which could harm our business, results of operations and financial condition.

**A significant portion of our costs and expenses are fixed, and we may not be able to adapt our cost structure to offset declines in our revenue.**

A significant portion of our expenses are fixed and do not vary proportionately with fluctuations in revenues. We need to maintain and continue to increase our transaction volumes to benefit from operating efficiencies. When we operate at less than expected capacity, fixed costs are inflated and represent a larger percentage of overall cost basis and percentage of revenue. Certain services we use, subscriptions and fees have fixed costs and are necessary for operation of the business. The other portion of fixed costs are necessary in order to invest in future growth. Given the early stage of our business, we cannot assure you that we will be able to rationalize our fixed costs.

**Our growth depends in part on the success of our strategic relationships with third parties.**

In order to grow our business, we anticipate that we will continue to depend on relationships with third parties, such as settlement service providers, lenders, real estate agents, valuation companies, vendors we use to renovate, service or repair our homes, third-party partners we rely on for referrals, such as homebuilders and online real estate websites or institutional buyers of our inventory. Identifying partners, and negotiating and documenting agreements with them, and establishing and maintaining good relationships requires significant time and resources.

In addition, we rely on our relationships with multiple-listing services providers ("MLS") in all our markets both as key data sources for our pricing and for listing our inventory for resale. Many of our competitors and other real estate websites have similar access to MLSs and listing data and may be able to source real estate information faster or more efficiently than we can. If we lose existing relationships with MLSs and other listing providers, whether due to termination of agreements or otherwise, changes to our rights to use or timely access listing data, an inability to continue to add new listing providers or changes to the way real estate information is shared, our ability to price or list our inventory for resale could be impaired and our operating results may suffer.

If we are unsuccessful in establishing or maintaining successful relationships with third parties, our ability to compete in the marketplace or to grow our revenues could be impaired and our operating results may suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our product or increased revenues.

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**If the methodologies we use to assess the value and condition of homes are inaccurate, including because of the information supplied to us by prospective sellers or due to the physical inspections being ineffective, it could result in unforeseen costs and risks.**

We make offers based in part on our assessment of offer requests completed by the prospective seller. While we may seek to confirm or supplement the information provided in such an offer request through our own due diligence, including physical inspections, we may rely on the information supplied to us by prospective sellers to make offer decisions, and we cannot be certain that this information is accurate. If owner-supplied information is inaccurate, we may make poor or imperfect pricing decisions and our portfolio may contain more risk than we believe. We also may conduct physical inspections of homes remotely through videos submitted to us by the sellers and this shift has been accelerated by health concerns associated with COVID-19, and this change may become permanent. It is possible that these video inspections may not be effective in identifying undisclosed issues, conditions or defects that an in-person inspection might otherwise reveal, which could result in us incurring unforeseen costs during the resale process.

**Our business is dependent upon an adequate and desirable supply of inventory, which is impacted by many factors. Any inability to acquire sufficient or desirable inventory may adversely affect our business, sales and results of operations.**

We primarily acquire homes directly from consumers and there can be no assurance of an adequate or desirable supply of such homes on terms that are attractive to us. A reduction in the availability of or access to inventory could adversely affect our business, sales and results of operations. Additionally, we evaluate thousands of potential homes daily using our proprietary pricing model. If we fail to adjust our pricing to stay in line with broader market trends, or fail to recognize those trends, it could adversely affect our ability to acquire inventory. We remain dependent on customers to sell us homes.

Our ongoing ability to acquire homes is critical to our business model. A lack of available or desirable homes that meet our purchase criteria may affect our ability to scale. Reductions in our acquisitions of homes may have adverse effects on our ability to reach our desired inventory levels, our desired portfolio diversification and our results of operations.

During 2022, the residential real estate market conditions were highly volatile, with generally favorable conditions during the first half of the year, shifting to considerable softening in consumer demand for residential real estate during the second half of the year as a result of various macroeconomic factors negatively impacting housing affordability and homebuyer sentiment. Given our focus on risk management, and in response to this softening consumer demand, we adjusted our home purchase criteria through more conservative acquisition underwriting, resulting in higher expected internal rates of return based on current market conditions, and continued to adjust pricing on our inventory to reflect market level trends throughout the second half of 2022. These actions resulted in a significant reduction in our home acquisition pace to allow us to manage overall inventory growth, which led to the average holding period of homes sold increasing to 101 days during 2022, which is consistent with our expected average inventory holding period and our historical norm. As our overall inventory mix shifts and includes a lower composition of newer acquired homes, our average inventory holding period generally increases. As a result, and given our reduction in home acquisition pace, we anticipate our average inventory holding period will continue to increase in early 2023, causing an increase in holding costs and downward pressure on sales prices and margins.

In addition, increases in transaction costs to acquire properties, including costs of evaluating homes and making offers, title insurance and escrow service costs, changes in transfer taxes, and any other new or increased acquisition costs, would have an adverse impact on our home acquisitions and our business.

**Our ability to compete effectively and execute on our strategic plan depends in part on our ability to manage home renovations.**

Our business depends, in part, upon our ability to effectively manage home renovations. We typically renovate or repair homes prior to listing them for resale. We use internal employees and use third parties to renovate and repair homes before we resell them.

We or these third-party providers may not be able to complete the required renovations or repairs within the expected timeline or proposed budget. Furthermore, if the work quality of our employees or third-party providers does not meet our expectations, then we may need to engage another third-party contractor or subcontractor, which may also adversely affect the timeline or budget for completing renovations or repairs.

A longer than expected period for completing renovations or repairs could negatively impact our ability to sell a home within our anticipated timeline. This prolonged timing exposes us to factors that adversely affect the home's resale value and may result in selling the home for a lower price than anticipated or not being able to sell the home at all. Meanwhile, incurring more than budgeted costs would adversely affect our investment return on purchased homes. Additionally, any undetected issues with a third-party provider's work may adversely affect our reputation as a home seller.

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**There are risks related to our ownership of vacant homes and the listing of those homes for resale that are not possible to fully eliminate.**

The homes in our inventory generally are not occupied during the time we own them prior to resale. When a home is listed for resale, prospective buyers or their agents typically can access our homes instantly through our technology without the need for an appointment or one of our representatives being present. In certain circumstances, we also allow sellers to continue to occupy a home after we have purchased the home for a short period of time. Having visitors or short-term occupants in our homes entails risks of damage to the homes, personal injury, unauthorized activities on the properties, theft, rental scams, squatters and trespassers and other situations that may have adverse impacts on us or the homes, including potential adverse reputational impacts. Additionally, all of these circumstances may involve significant costs to resolve that may not be fully covered by insurance, including legal costs associated with removing unauthorized visitors and occupants and additional holding and repair costs. If these increased costs are significant across our homes inventory, both in terms of costs per home and numbers of homes impacted, this could have an adverse impact on our results of operations that is material.

**Our ability to recruit and retain a sufficient number of productive real estate agents is critical to maintaining and growing our business and providing an adequate level of service to our customers.**

We have employed, and will continue to employ, internal and independent contractor real estate agents for our brokerage business. Our internal real estate agents generally earn less on a per transaction basis than traditional real estate agents who work as independent contractors at traditional brokerages. Because employing internal real estate agents is uncommon in our industry, real estate agents considering working for us as employees may not understand our compensation model or may not perceive it to be more attractive than our independent contractor, commission-driven compensation model, and used by most traditional brokerages. If we are unable to attract, retain, effectively train, motivate, and utilize our real estate agents, we may be unable to grow our business and we may be required to change our compensation model, which could significantly increase our real estate agent compensation or other costs.

Also, when we employ internal real estate agents, we incur costs that we do not incur when we employ independent contractor real estate agents, such as base pay, employee benefits, expense reimbursement, training, and employee transactional support staff. As a result, we may have significant costs that, in the event of downturns in demand in the markets we serve, may result in us being unable to adjust as rapidly as some of our competitors. In turn, such downturns may impact us more than our competitors.

If we are unable to successfully grow a sufficient base of productive independent real estate agents, we may be unable to maintain or grow revenues. A variety of factors impact our ability to attract and retain independent real estate agents, including but not limited to: intense competition from other brokerages; our ability to develop and deliver compelling products and services to independent real estate agents; our ability to generate high-quality leads to independent real estate agents; and our ability to adopt and implement commission plans (or pricing model structures) that are attractive to such agents.

If we are unable to successfully recruit and retain a sufficient number of productive internal and independent real estate agents we may be unable to maximize our revenue and market share growth.

**We are subject to the requirements governing the licensing and conduct of real estate brokerage and brokerage-related businesses in the jurisdictions in which we do business.**

Due to our brokerage business, we and our agents must comply with the requirements governing the licensing and conduct of real estate brokerage and brokerage-related businesses in the markets in which we operate. Due to the geographic scope of our operations, we and our real estate agents may not be in compliance with all of the required licenses at all times. Additionally, if we enter into new markets, we may become subject to additional licensing requirements. If we or our real estate agents fail to obtain or maintain the required licenses for conducting our brokerage operations or fail to strictly adhere to associated regulations, the relevant government authorities may order us to suspend relevant operations or impose fines or other penalties.

**A health and safety incident relating to our operations could be costly in terms of potential liability and reputational damage.**

Customers will visit homes on a regular basis through our mobile application or with a real estate agent. Due to the number of homes we own, the safety of our homes is critical to the success of our business. A failure to keep our homes safe that results in a major or significant health and safety incident could expose us to liability that could be costly. Such an incident could generate significant negative publicity and have a corresponding impact on our reputation, our relationships with relevant regulatory agencies or governmental authorities, and our ability to attract customers and employees, which in turn could have a material adverse effect on our financial results and liquidity.

**Our risk management efforts may not be effective.**

We could incur substantial losses and our business operations could be disrupted if we are unable to effectively identify, manage, monitor and mitigate financial risks, such as pricing risk, interest rate risk, liquidity risk, and other market-related

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risks, as well as operational and legal risks related to our business, assets and liabilities. We also are subject to various laws, regulations and rules that are not industry specific, including employment laws related to employee hiring and termination practices, health and safety laws, environmental laws and other federal, state and local laws, regulations and rules in the jurisdictions in which we operate. Our risk management policies, procedures, and techniques may not be sufficient to identify all of the risks to which we are exposed, mitigate the risks we have identified, or identify additional risks to which we may become subject in the future. Expansion of our business activities may also result in our being exposed to risks to which we have not previously been exposed or may increase our exposure to certain types of risks, and we may not effectively identify, manage, monitor, and mitigate these risks as our business activities change or increase.

**We are from time to time involved in, or may in the future be subject to, claims, suits, government investigations, and other proceedings that may result in adverse outcomes.**

We are from time to time involved in, or may in the future be subject to, claims, suits, government investigations, and proceedings arising from our business, including actions with respect to intellectual property, privacy, consumer protection, information security, mortgage lending, real estate, environmental, data protection or law enforcement matters, tax matters, labor and employment, and commercial claims, as well as actions involving content generated by our customers, shareholder derivative actions, purported class action lawsuits, and other matters. Such claims, suits, government investigations, and proceedings are inherently uncertain, and their results cannot be predicted with certainty. Regardless of the outcome, any such legal proceedings can have an adverse impact on us because of legal costs, diversion of management and other personnel, negative publicity and other factors. In addition, it is possible that a resolution of one or more such proceedings could result in reputational harm, liability, penalties, or sanctions, as well as judgments, consent decrees, or orders preventing us from offering certain features, functionalities, products, or services, or requiring a change in our business practices, products, services or technologies, which could in the future materially and adversely affect our business, operating results and financial condition.

**We operate in a highly regulated industry and are subject to a wide range of federal, state and local laws, rules and regulations. Failure to comply with these laws, rules and regulations or to obtain and maintain required licenses, could adversely affect our business, financial condition and results of operations.**

We operate in highly regulated businesses through a number of different channels across the United States. As a result, we are currently subject to a variety of, and may in the future become subject to additional, federal, state and local statutes and regulations in various jurisdictions (as well as judicial and administrative decisions and state common law), which are subject to change at any time, including laws regarding the real estate and mortgage industries, settlement services, insurance, mobile and internet-based businesses and other businesses that rely on advertising, as well as data privacy and consumer protection laws, and employment laws. These laws are complex and sometimes ambiguous, and can be costly to comply with, require significant management time and effort, require a substantial investment in technology, and subject us to claims, government enforcement actions, civil and criminal liability or other remedies, including suspension of business operations.

Buying and selling homes, providing real estate brokerage services, and providing other product offerings, such as mortgage brokerage services, results in us receiving or facilitating transmission of personally identifiable information. Further, in the future we may offer additional products and services, which could increase the amount of personally identifiable information we receive and transmit. This information is increasingly subject to legislation and regulation in the United States. These laws and regulations are generally intended to protect the privacy and security of personal information, including Social Security Numbers that is collected, processed and transmitted. These laws also can restrict our use of this personal information for other commercial purposes. We could be adversely affected if government regulations require us to significantly change our business practices with respect to this type of information, if penetration of network security or misuse of personal information occurs, or if the third parties that we engage with to provide processing and screening services violate applicable laws and regulations, misuse information, or experience network security breaches.

In order to provide the broad range of products and services that we offer or plan to offer customers, certain of our subsidiaries are or will be required to maintain real estate brokerage and mortgage licenses in certain states in which we operate. These entities are subject to stringent state and federal laws and regulations and to the scrutiny of state and federal government agencies as licensed businesses.

Mortgage products are regulated at the state level by licensing authorities and administrative agencies, with additional oversight from the Consumer Financial Protection Bureau and other federal agencies. These laws generally regulate the manner in which lending and lending-related activities are marketed or made available to consumers, including, but not limited to, advertising, finding and qualifying applicants, the provision of consumer disclosures, payments for services, and record keeping requirements; these laws include, at the federal level, the Real Estate Settlement Procedures Act, the Fair Credit Reporting Act (as amended by the Fair and Accurate Credit Transactions Act), the Truth in Lending Act (including the Home Ownership and Equity Protection Act of 1994), the Equal Credit Opportunity Act, the Fair Housing Act, the Gramm-Leach-Bliley Act, the Electronic Fund Transfer Act, the Servicemembers Civil Relief Act, the Military Lending Act, the Homeowners Protection Act, the Home Mortgage Disclosure Act, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, the

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Federal Trade Commission Act, the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, the Bank Secrecy Act (including the Office of Foreign Assets Control and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act), the Telephone Consumer Protection Act, the Mortgage Acts and Practices Advertising Rule (Regulation N), the Coronavirus Aid, Relief, and Economic Security Act, all implementing regulations, and various other federal laws. The Consumer Financial Protection Bureau also has broad authority to enforce prohibitions on practices that it deems to be unfair, deceptive or abusive. Additionally, state and local laws may restrict the amount and nature of interest and fees that may be charged by a lender or mortgage broker, impose more stringent privacy requirements and protections for service members, and/or otherwise regulate the manner in which lenders or mortgage brokers operate or advertise.

As a provider of real estate brokerage services, we hold real estate brokerage licenses in multiple states and may apply for additional real estate brokerage licenses as our business grows. To maintain these licenses, we must comply with the requirements governing the licensing and conduct of real estate brokerage services and brokerage-related businesses in the markets where we operate. We may be subject to additional local, state and federal laws and regulations governing residential real estate transactions, including those administered by the U.S. Department of Housing and Urban Development, and the states and municipalities in which we transact. Further, due to the geographic scope of our operations and the nature of the products and services we provide, certain of our other subsidiaries maintain real estate brokerage licenses in certain states in which we operate. Each of these licenses subjects our subsidiaries to different federal, state, and local laws and the scrutiny of different licensing authorities, including state insurance departments. Each subsidiary must comply with different licensing statutes and regulations, as well as varied laws that govern the offering of compliant products and services.

For certain licenses, we are required to designate individual licensed brokers of record, qualified individuals and control persons. Certain licensed entities also are subject to routine examination and monitoring by the federal Consumer Financial Protection Bureau (for mortgage) and/or state licensing authorities. We cannot assure you that we, or our licensed personnel, are and will remain at all times, in full compliance with state and federal real estate, title insurance and escrow, property and casualty insurance, and mortgage licensing and consumer protection laws and regulations, and we may be subject to litigation, government investigations and enforcement actions, fines or other penalties in the event of any non-compliance. As a result of findings from examinations, we also may be required to take a number of corrective actions, including modifying business practices and making refunds of fees or money earned. In addition, adverse findings in one state may be relied on by another state to conduct investigations and impose remedies. If we apply for new licenses, we will become subject to additional licensing requirements, which we may not be in compliance with at all times. If in the future a state agency were to determine that we are required to obtain additional licenses in that state in order to operate our business, or if we lose or do not renew an existing license or are otherwise found to be in violation of a law or regulation, we may be subject to fines or legal penalties, lawsuits, enforcement actions, void contracts, or our business operations in that state may be suspended or prohibited. Our business reputation with consumers and third parties also could be damaged. Compliance with, and monitoring of, these laws and regulations is complicated and costly and may inhibit our ability to innovate or grow.

If we are unable to comply with these laws or regulations in a cost-effective manner, it may require us to modify certain products and services, which could require a substantial investment and result in a loss of revenue, limit our ability to offer additional products and services, or expand existing products and services into new markets, or cease providing the impacted product or service altogether. Furthermore, laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our products and business.

**Catastrophic events may disrupt our business.**

Natural disasters or other catastrophic events such as pandemics may cause damage or disruption to our operations, real estate commerce, and the global economy, and thus could harm our business. Properties located in the markets in which we operate in Florida and certain portions of North Carolina and Texas are more susceptible to certain hazards (such as floods, hurricanes or hail) than properties in other parts of the country.

In the event of a major earthquake, hurricane, windstorm, tornado, flood or catastrophic event such as pandemic, fire, flood, power loss, telecommunications failure, cyber-attack, war, or terrorist attack, we may be unable to continue our operations and may endure reputational harm, delays in developing our platform and solutions, breaches of data security and loss of critical data, all of which could harm our business, results of operations and financial condition. Furthermore, these sorts of catastrophic events may cause disruption on both the resale and acquisition side as we may not be able to transact on real estate. For example, homes that we own may be damaged and disruptions to infrastructure may mean our contractors are unable to perform the necessary home repairs in a timely manner. Closures of local recording offices or other governmental offices in charge of real property records, including tax or lien-related records, would adversely affect our ability to conduct operations in the affected geographies. Any of these delays will likely result in extended hold times, increased costs and impairments. Also, the insurance we maintain would likely not be adequate to cover our losses resulting from disasters or other business interruptions.

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As we grow our business, the need for business continuity planning and disaster recovery plans will grow in significance. If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster, and successfully execute on those plans in the event of a disaster or emergency, our business and reputation would be harmed.

**Environmentally hazardous conditions may adversely affect us.**

Under various federal, state and local environmental laws, a current or previous owner or operator of real property may be liable for the cost of removing or remediating hazardous or toxic substances on such property. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Even if more than one person may have been responsible for the contamination, each person covered by applicable environmental laws may be held responsible for all of the clean-up costs incurred. In addition, third parties may sue the owner or operator of a site for damages based on personal injury, natural resources or property damage or other costs, including investigation and clean-up costs, resulting from the environmental contamination. The presence of hazardous or toxic substances on one of our properties, or the failure to properly remediate a contaminated property, could give rise to a lien in favor of the government for costs it may incur to address the contamination or otherwise adversely affect our ability to sell the property. Environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated. A property owner who violates environmental laws may be subject to sanctions which may be enforced by governmental agencies or, in certain circumstances, private parties. In connection with the acquisition and ownership of our properties, we may be exposed to such costs. The cost of defending against environmental claims, of compliance with environmental regulatory requirements or of remediating any contaminated property could materially and adversely affect us.

Compliance with new or more stringent environmental laws or regulations or stricter interpretation of existing laws may require material expenditures by us. We may be subject to environmental laws or regulations relating to our properties, such as those concerning lead-based paint, mold, asbestos, radon, pesticides, proximity to power lines or other issues. We cannot assure you that future laws, ordinances or regulations will not impose any material environmental liability or that the current environmental condition of our properties will not be affected by existing conditions of the land, operations in the vicinity of the properties or the activities of unrelated third parties. In addition, we may be required to comply with various local, state and federal fire, health, life-safety and similar regulations. Failure to comply with applicable laws and regulations could result in fines and/or damages, suspension of personnel, civil liability or other sanctions.

**Risks Related to Our Intellectual Property and Technology**

**Our internal information technology systems may fail or suffer security breaches, loss or leakage of data, and other disruptions, which could disrupt our business or result in the loss of critical and confidential information.**

The evolution of technology systems introduces ever more complex security risks that are difficult to predict and defend against. An increasing number of companies, including those with significant online operations, have recently disclosed breaches of their security, some of which involved sophisticated tactics and techniques allegedly attributable to criminal enterprises or nation-state actors. Successful breaches, employee malfeasance, or human or technological error could result in, for example, unauthorized access to, disclosure, modification, misuse, loss, or destruction of company, customer, or other third-party data or systems; theft of sensitive, regulated, or confidential data including personal information and intellectual property; the loss of access to critical data or systems through ransomware, destructive attacks or other means; and business delays, service or system disruptions or denials of service. We experience cyber incidents and other security incidents of varying degrees from time to time, and there can be no assurance that any future incidents would not lead to costs or consequences that materially impact our operations or business. In response to these incidents, we have implemented controls and taken other preventative actions to further strengthen our systems against future incidents. However, we cannot guarantee that such measures will provide sufficient security, that we will be able to react in a timely manner, or that our remediation efforts following a cybersecurity incident will be successful.

In addition, we do not know whether our current practices will be deemed sufficient under applicable laws or whether new regulatory requirements might require us to make significant changes to our current practices. If there is a breach of our computer systems, and we know or suspect that certain personal information has been accessed, or used inappropriately, we may need to inform the affected individual (and regulatory body) and may be subject to significant fines and penalties. Further, under certain regulatory schemes, we may be liable for statutory damages on a per breached record basis, irrespective of any actual damages or harm to the individual. In the event of a breach we could face government scrutiny or consumer class actions alleging statutory damages amounting to hundreds of millions, and possibly billions of dollars.

The risk of cybersecurity incidents directed at us or our third-party partners and vendors includes uncoordinated individual attempts to gain unauthorized access to information technology systems, as well as to sophisticated and targeted measures known as advanced persistent threats. In addition, we face the risk of confidential data inadvertently leaking through human or technological errors. Cybersecurity incidents are also constantly evolving, increasing the difficulty of detecting and successfully defending against them. In the ordinary course of our business, we and our third-party partners and vendors collect

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and store personal information, as well as our proprietary business information and intellectual property and that of our customers and employees.

Additionally, we rely on third-parties and their security procedures for the secure storage, processing, maintenance, and transmission of information that is critical to our operations. Despite measures designed to prevent, detect, address, and mitigate cybersecurity incidents, such incidents may occur to us or our third-party providers and, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including personal information of our customers and employees) and the disruption of business operations. Any such compromises to our security, or that of our third-party partners or vendors, could cause customers to lose trust and confidence in us and stop using our website and mobile applications. In addition, we may incur significant costs for remediation that may include liability for stolen assets or information, repair of system damage, and compensation to customers, employees, and business partners. We may also be subject to government enforcement proceedings and legal claims by private parties. Actual or anticipated attacks may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants.

Any actual or alleged security breaches or alleged violations of federal or state laws or regulations relating to privacy and data security could result in mandated user notifications, litigation, government investigations, significant fines, and expenditures; divert management's attention from operations; deter people from using our platform; damage our brand and reputation; and materially adversely affect our business, results of operations, and financial condition. Defending against claims or litigation based on any security breach or incident, regardless of their merit, will be costly and may cause reputation harm. The successful assertion of one or more large claims against us that exceed available insurance coverage, denial of coverage as to any specific claim, or any change or cessation in our insurance policies and coverages, including premium increases or the imposition of large deductible requirements, could have a material adverse effect on our business, results of operations, and financial condition.

**We process, store and use personal information and other data, which subjects us to governmental regulation and other legal obligations related to privacy, and any actual or perceived violation of these privacy obligations could result in a claim for damages, regulatory action, loss of business, or unfavorable publicity.**

We receive, store and process personal information and other customer information, or personal information. There are numerous federal and state laws, as well as regulations and industry guidelines, regarding privacy and the storing, use, processing, and disclosure and protection of personal information, the scope of which are changing, subject to differing interpretations, and may be inconsistent among countries or conflict with other rules. Additionally, laws, regulations, and standards covering marketing and advertising activities conducted by telephone, email, mobile devices, and the internet, may be applicable to our business, such as the Telephone Consumer Protection Act (the "TCPA") (as implemented by the Telemarketing Sales Rule), the CAN-SPAM Act, and similar state consumer protection laws. We generally seek to comply with industry standards and are subject to the terms of our own privacy policies and privacy-related obligations to third parties. We strive to comply with all applicable laws, policies, legal obligations and industry codes of conduct relating to privacy and data protection to the extent possible. However, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or regulations, making enforcement, and thus compliance requirements, ambiguous, uncertain, and potentially inconsistent. Any failure or perceived failure by us to comply with our privacy policies, privacy-related obligations to customers or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized access to or unintended release of personally identifiable information or other customer data, may result in governmental enforcement actions, litigation, or public statements against us by consumer advocacy groups or others. Any of these events could cause us to incur significant costs in investigating and defending such claims and, if found liable, pay significant damages. Further, these proceedings and any subsequent adverse outcomes may cause our customers to lose trust in us, which could have an adverse effect on our reputation and business.

Any significant change to applicable laws, regulations or industry practices regarding the use or disclosure of personal information, or regarding the manner in which the express or implied consent of customers for the use and disclosure of personal information is obtained, could require us to modify our products and features, possibly in a material manner and subject to increased compliance costs, which may limit our ability to develop new products and features that make use of the personal information that our customers voluntarily share. For example, the California Consumer Privacy Act (the "CCPA"), which took effect on January 1, 2020, imposes obligations and restrictions on companies regarding their collection, use, and sharing of personal information and provides new and enhanced data privacy rights to California residents. The CCPA imposes a severe statutory damages framework. Since the enactment of the CCPA, new privacy and data security laws have been proposed in more than half of the states in the U.S. and in the U.S. Congress, including another law in California where voters approved a ballot initiative from privacy rights advocates intending to augment and expand the CCPA, the California Privacy Rights Act (the "CPRA"), on November 3, 2020, which took effect on January 1, 2023 (with a look back to data collected, on or after January 1, 2022). The CPRA significantly modifies the CCPA, including by creating a new state agency that will be

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vested with the authority to implement and enforce California's privacy laws. Additionally, Nevada enacted a law that went into force on October 1, 2019 and requires companies to honor consumers' requests to no longer sell their data. Violators may be subject to injunctions and civil penalties of up to $5,000 per violation. Several other states have already enacted, and are actively considering enacting privacy laws, which may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability for our business. This existing and future legislation may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment in resources to compliance programs, could impact strategies and availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies, all of which we may not be able to expend resources toward. We expect that there will continue to be new proposed laws, regulations, and industry standards concerning privacy, data protection, and information security and we cannot determine the impact such future laws, regulations, and standards may have on our business. We could be subject to legal claims, government action, or harm to our reputation or incur significant remediation costs if we experience a security breach or our practices fail, or are seen as failing, to comply with our policies or with applicable laws concerning personally identifiable information.

Further, if the trend of new data privacy laws and increasing enforcement by regulators of the strict approach to the interpretation and implementation of such laws continues, this could lead to substantial costs, require significant systems changes, divert the attention of our personnel, increase costs and subject us to additional liabilities. Any of the foregoing could materially adversely affect our brand, reputation, business, results of operations, and financial condition.

The U.S. Federal Trade Commission and many state attorneys general are interpreting federal and state consumer protection laws to impose standards for the online collection, use, dissemination, and security of data. Such standards require us to publish statements that describe how we handle personal data and choices individuals may have about the way we handle their personal data. If such information that we publish is considered untrue or inaccurate, we may be subject to government claims of unfair or deceptive trade practices, which could lead to significant liabilities and consequences. State consumer protection laws provide similar causes of action for unfair or deceptive practices for alleged data privacy, data protection and data security violations

**Any significant disruption in service in our computer systems and third-party networks and mobile infrastructure that we depend on could result in a loss of customers and we may be unable to maintain and scale the technology underlying our offerings.**

Customers and potential customers access our products primarily through our website and mobile application. Our ability to attract, retain and serve customers depends on the reliable performance and availability of our website, mobile application, and technology infrastructure. Furthermore, we depend on the reliable performance of third-party networks and mobile infrastructure to provide our technology offerings to our customers and potential customers. The proper operation of these networks and infrastructure is beyond our control, and service interruptions or website unavailability could impact our ability to service our customers in a timely manner, and may have an adverse effect on existing and potential customer relationships.

Our information systems and technology may not be able to continue to accommodate our growth and may be subject to security risks. The cost of maintaining such systems may increase. Such a failure to accommodate growth, or an increase in costs related to such information systems, could have a material adverse effect on our business and results of operations and could result in a loss of customers.

**Failure to protect our trade secrets, know-how, proprietary applications, business processes and other proprietary information, could adversely affect the value of our technology and products.**

Our success and ability to compete depends in part on our intellectual property and our other proprietary business information. We seek to control access to our proprietary information by entering into a combination of confidentiality and proprietary rights agreements, invention assignment agreements and nondisclosure agreements with our employees, consultants and third parties with whom we have relationships. While these agreements will give us contractual remedies upon any unauthorized use or disclosure of our proprietary information, we cannot guarantee that we will be able to detect such unauthorized activity, or if detected, that our rights under these agreements will be effective in controlling access to, or use and distribution of, our proprietary information, intellectual property or technology.

We have filed trademark and copyright applications to protect certain aspects of our intellectual property. However, we cannot guarantee that we will be successful in registering our trademarks or copyrights. We may be unable to secure intellectual property protection for all of our technology and methodologies, or the steps we take to enforce our intellectual property rights may be inadequate. Furthermore, monitoring unauthorized use of our intellectual property is difficult and costly, and we cannot guarantee that the steps we have taken to protect our proprietary technologies will be effective to enforce our rights against third parties. Third parties may knowingly or unknowingly infringe our proprietary rights or challenge proprietary rights held by us, and we may not be able to prevent infringement or misappropriation of our proprietary rights without incurring substantial expense. If our intellectual property rights are used or misappropriated by third parties, the value of our brand and other intangible assets may be diminished and competitors may be able to more effectively mimic our products and methods of

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operations. Any of these events would have a material adverse effect on our business, financial condition and results of operations.

**In the future we may be party to intellectual property rights claims and other litigation which are expensive to support, and if resolved adversely, could have a significant impact on us.**

Our competitors and other third parties may own or claim to own intellectual property relating to the real estate industry. In the future, third parties may claim that we are infringing on their intellectual property rights, and we may be found to be infringing such rights. Any claims or litigation, regardless of merit, could cause us to incur significant expenses. If any such claims are successfully asserted against us, it could require us to pay significant damages or ongoing licensing payments, prevent us from offering our products or services, or require us to comply with unfavorable terms. Even if we were to prevail, the time and resources necessary to resolve such disputes could be costly, time-consuming, and divert the attention of management and key personnel from our business operations. If we are not successful in defending ourselves against any potential future claims, we may be required to pay damages and may be subject to injunctions, each of which could harm our business, results of operations, financial condition and reputation.

**Our services utilize third-party open source software components, which may pose particular risks to our proprietary software, technologies, products and services in a manner that could negatively affect our business.**

We use open source software in our services and will continue to use open source software in the future. Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code, and such open source software may not be regularly maintained and updated in order to contain and patch possible security vulnerabilities. To the extent that our services depend upon the successful operation of open source software, any undetected errors or defects in this open source software could prevent the deployment or impair the functionality of our platform, delay new solutions introductions, result in a failure of our platform, and injure our reputation.

Some open source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open source software we use, or grant other licenses to our intellectual property. If we combine our proprietary software with such open source software in a certain manner, we could, under certain open source licenses, be required to release or license the source code of our proprietary software to the public. Although we monitor our use of open-source software to avoid subjecting our platform to conditions we do not intend, we cannot assure that our processes for controlling our use of open-source software in our platform will be effective. From time to time, we may be subject to claims asserting ownership of, or demanding release of, our source code, the open source software or derivative works that were developed using such software, or requiring us to provide attributions of any open source software incorporated into our distributed software, or otherwise seeking to enforce the terms of the applicable open source license. These claims could also result in litigation, require us to purchase a commercial license or require us to devote additional research and development resources to re-engineer our software or change our products or services, any of which would have a negative effect on our business and results of operations. Additionally, the terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts. There is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to market or provide our products.

**We rely on licenses to use the intellectual property rights of third parties which are incorporated into our products and services. Failure to renew or expand existing licenses may require us to modify, limit or discontinue certain offerings, which could materially affect our business, financial condition and results of operations.**

We rely on products, technologies and intellectual property that we license from third parties for use in our services. We cannot assure that these third-party licenses, or support for such licensed products and technologies, will continue to be available to us on commercially reasonable terms, if at all. In the event that we cannot renew or expand existing licenses, we may be required to discontinue or limit our use of the products that include or incorporate the licensed intellectual property.

We cannot be certain that our licensors are not infringing the intellectual property rights of others or that our suppliers and licensors have sufficient rights to the technology in all jurisdictions in which we may operate. Some of our license agreements may be terminated by our licensors for convenience. If we are unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against our suppliers and licensors or against us, or if we are unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms, our ability to develop our services containing that technology could be severely limited and our business could be harmed. Additionally, if we are unable to obtain necessary technology from third parties, we may be forced to acquire or develop alternate technology, which may require significant time and effort and may be of lower quality or performance standards. This would limit and delay our ability to provide new or competitive offerings and increase our costs. If alternate technology cannot be obtained or developed, we may not be able to offer certain functionality as part of our offerings, which could adversely affect our business, financial condition and results of operations.

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**Our software is highly complex and may contain undetected errors.**

The software and code underlying our platform is highly interconnected and complex and may contain undetected bugs, errors, malicious code, vulnerabilities, or other defects, some of which may remain undetected or may only be discovered after the code has been released. We release or update our software code regularly and this practice may result in the more frequent introduction of errors or vulnerabilities into the software underlying our platform, which can impact the customer experience on our platform. Additionally, due to the interconnected nature of the software underlying our platform, updates to certain parts of our code, including changes to our mobile application or website or third-party application programming interfaces on which our mobile application or website rely, could have an unintended impact on other sections of our code, which may result in errors or vulnerabilities to our platform. Any errors or vulnerabilities discovered in our code after release could impact the security of our systems or result in the inadvertent disclosure of sensitive or other regulated information, cause damage to our reputation, loss of our customers, loss of revenue or liability for damages, any of which could adversely affect our growth prospects and our business.

Furthermore, our development and testing processes may not detect errors and vulnerabilities in our technology offerings prior to their implementation. Any inefficiencies, errors, technical problems or vulnerabilities arising in our technology offerings after their release could reduce the quality of our products or interfere with our customers' access to and use of our technology and offerings.

**Our fraud detection processes and information security systems may not successfully detect all fraudulent activity by third parties aimed at our employees or customers, which could adversely affect our reputation and business results.**

Third-party actors have attempted in the past, and may attempt in the future, to conduct fraudulent activity by engaging with our customers, particularly in our title insurance and escrow business. We make a large number of wire transfers in connection with loan and real estate closings and process sensitive personal data in connection with these transactions. Though we have sophisticated fraud detection processes and have taken other measures to identify fraudulent activity on our mobile applications, websites and internal systems, we may not be able to detect and prevent all such activity. Similarly, the third parties we use to effectuate these transactions may fail to maintain adequate controls or systems to detect and prevent fraudulent activity. Persistent or pervasive fraudulent activity may cause customers and real estate partners to lose trust in us and decrease or terminate their usage of our products, or could result in financial loss, thereby harming our business and results of operations.

**Risks Related to Our Liquidity and Capital Resources**

**We utilize a significant amount of indebtedness in the operation of our business, and so our cash flows and operating results could be adversely affected by required payments of debt or related interest and other risks of our debt financing.**

As of December 31, 2022, we had $666.1 million aggregate principal amount of indebtedness outstanding, including $581.7 million of loans under asset-backed senior and mezzanine secured credit facilities. Our leverage could have meaningful consequences to us, including increasing our vulnerability to economic downturns, limiting our ability to withstand competitive pressures, or reducing our flexibility to respond to changing business and economic conditions. We are also subject to general risks associated with debt financing, including (1) our cash flow may not be sufficient to satisfy required payments of principal and interest; (2) we may not be able to refinance our existing indebtedness or refinancing terms may be less favorable to us than the terms of our existing debt; (3) debt service obligations could reduce funds available for capital investment and general corporate purposes; (4) any default on our indebtedness could result in acceleration of the indebtedness and foreclosure on the homes collateralizing that indebtedness, with our attendant loss of any prospective income and equity value from such property; and (5) aged real estate may be ineligible for financing on our debt facilities potentially forcing the sale of aged real estate for prices that do not allow us to meet our margin targets or cover our costs to repay those facilities. Any of these risks could place strains on our cash flows, reduce our ability to grow and adversely affect our results of operations.

**We rely on agreements with third parties to finance our business.**

We have entered into debt agreements with a limited number of counterparties to provide capital for the growth and operation of our businesses, including to finance our purchase and renovation of homes. If we fail to maintain adequate relationships with potential financial sources, or if we are unable to renew, refinance or extend our existing debt arrangements on favorable terms or at all, we may be unable to maintain sufficient inventory, which would adversely affect our business and results of operations. In addition, each of our secured credit facilities are not fully committed, meaning the applicable lender may not be obligated to advance new loan funds if they choose not to do so. Obtaining new or replacement funding arrangements may not be possible or may be at higher interest rates or other less favorable terms.

Our financing sources are not required to extend the maturities of our financing arrangements, and if a financing source is unable or unwilling to extend financing, and other financing sources are unable or unwilling to make or increase their financing commitments, then we will be required to repay the outstanding balance of the financing on the related maturity date. If we are unable to pay the outstanding balance of our debt obligations at maturity, the financing sources generally have the right to

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foreclose on the homes and other collateral securing that debt and to charge higher "default rates" of interest until the outstanding obligations are paid in full. If we are unable to renew or extend the terms of our existing senior and mezzanine secured credit facilities, we may not be able to terminate or prepay the secured credit facilities without incurring significant financial costs. If realized, any of these financing risks could negatively impact our results of operations and financial condition.

**We intend to rely on proceeds from the sale of financed homes to repay amounts owed under our property financing facilities, but such proceeds may not be available or may be insufficient to repay the amounts when they become due.**

For our senior and mezzanine secured credit facilities, we typically are required to repay amounts owed with respect to a financed home upon the sale of that home. There is no assurance such sale proceeds will fully cover the amounts owed. Our senior and mezzanine secured credit facilities commonly have initial terms of 18 to 24 months or less. It may be the case that not all homes securing these arrangements will be sold on or before the maturity dates of such financing arrangements, which would mean that sale proceeds would not be available to pay the amounts due at maturity. We may also be required to repay amounts owed with respect to a financed home prior to the sale of that home and prior to maturity of the related financing facility, typically due to the home having been held in our inventory for an extended period of time or, less commonly, if other unforeseen issues with the home arise during our holding period. In these situations, we may use cash on hand to repay the amounts owed or contribute other homes as additional collateral. To the extent we do not have sufficient cash or substitute collateral or are unable to draw on other financing facilities to make the required repayments, which could occur if a significant amount of our debt were to become due suddenly and unexpectedly, we would be in default under the related facility.

**Covenants in our debt agreements may restrict our borrowing capacity or operating activities and adversely affect our financial condition.**

Certain of our existing debt agreements contain, and future debt agreements may contain, various affirmative, negative, financial and collateral performance covenants. Specifically, we need to maintain a certain tangible net worth and liquidity minimums, and leverage maximums under certain of these facilities. These covenants may limit our operational flexibility or restrict our ability to engage in transactions that we believe would otherwise be in the best interests of our shareholders. If we breach these covenants, in certain cases, we could be required to repay all of the relevant debt immediately, even in the absence of a payment default. The occurrence of these events would have an adverse impact on our financial condition and results of operations and such impact could be material.

The borrowers and certain other loan parties under the debt facilities we use to finance the purchase and renovation of homes are special purpose entity ("SPE") subsidiaries of Offerpad. While our SPEs' lenders' recourse in most situations following an event of default is only to the applicable SPE or its assets, we have provided limited non-recourse carve out guarantees under our senior and mezzanine secured credit facilities for certain of the SPEs' obligations in situations involving "bad acts" by an Offerpad entity and certain other limited circumstances that are generally under our control. To the extent a guaranty obligation is triggered, we may become obligated to pay all or a portion of the amounts owed by our SPEs and other subsidiaries to their respective lenders.

**Our debt facilities contain cross defaults and similar provisions that could cause us to be in default under multiple debt facilities or otherwise lose access to financing for new homes and excess proceeds from sales of homes in the event we default under a single facility.**

If an event of default or similar event occurs under one of our senior or mezzanine secured credit facilities, this may trigger an event of default under another senior or mezzanine secured credit facility or result in us losing access to financing through our senior and mezzanine secured credit facilities or to excess proceeds from sales of homes that would otherwise be available to us. In addition, our senior and mezzanine secured credit facilities currently contain cross defaults to certain other indebtedness. The foregoing considerations significantly increase the likelihood that a default or similar event under one or more of our debt facilities would result in adverse consequences for our other debt facilities.

**Failure to hedge effectively against interest rate changes may adversely affect our results of operations.**

Borrowings under our senior secured facilities accrue interest at variable rates and expose us to interest rate risk. As interest rates increase, our debt service obligations on the variable rate indebtedness increase and our earnings and cash flows correspondingly decrease. Increased interest costs have also reduced the amount of debt financing that our homes inventory can support. Assuming no change in the outstanding borrowings on our senior secured credit facilities, we estimate that a one percentage point increase in the Secured Overnight Financing Rate would have increased our annual interest expense by $4.9 million during the year ended December 31, 2022.

In connection with our variable debt, we may seek to obtain interest rate protection in the form of swap agreements, interest rate cap contracts or similar derivatives or instruments to hedge against the possible negative effects of interest rate increases. There is no assurance that we will be able to obtain any such interest rate hedging arrangements on attractive terms or at all.

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Even if we are successful in obtaining interest rate hedges, we cannot assure you that any hedging will adequately relieve the adverse effects of interest rate increases or that counterparties under these agreements will honor their obligations thereunder.

**We could be subject to additional tax liabilities and our ability to use net operating loss carryforwards and other tax attributes may be limited in connection with the Business Combination or other ownership changes.**

We are subject to federal and state income and non-income taxes in the United States. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating these taxes. Our effective tax rates could be affected by numerous factors, such as entry into new businesses and geographies, changes to our existing business and operations, acquisitions and investments and how they are financed, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles and interpretations (such as the recent United States Inflation Reduction Act which, among other changes, introduced a 15% corporate minimum tax on certain United States corporations and a 1% excise tax on certain stock redemptions by United States corporations). We are required to take positions regarding the interpretation of complex statutory and regulatory tax rules and on valuation matters that are subject to uncertainty, and IRS or other tax authorities may challenge the positions that we take.

We generated net income during the year ended December 31, 2021. However, we incurred a net loss during the year ended December 31, 2022 and each year from inception through December 31, 2020, may not be profitable in the near future, and may never achieve long-term profitability. To the extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire, if at all. As of December 31, 2022, the Company had federal and state net operating loss ("NOL") carryforwards of $426.5 million. Under the Tax Act, as modified by the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), U.S. federal net operating loss carryforwards generated in taxable periods beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such net operating loss carryforwards in taxable years beginning after December 31, 2020, is limited to 80% of taxable income.

In addition, our net operating loss carryforwards are subject to review and possible adjustment by the IRS, and state tax authorities, and may be limited as a result of previous or future changes in our ownership. Under Sections 382 and 383 of the Code, a corporation that undergoes an "ownership change" is subject to limitations on its ability to utilize its pre-ownership change net operating losses to offset future taxable income. An "ownership change" pursuant to Section 382 of the Code generally occurs if one or more stockholders or groups of stockholders who own at least 5% of a company's stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Similar rules may apply under state tax laws. Our existing net operating losses may be subject to limitations arising from previous ownership changes, and if there is a future change in our stock ownership (which may be outside of our control) that results in an ownership change, our ability to utilize net operating losses could be further limited by Section 382 of the Code.

**We will need additional capital to pursue our business objectives and respond to business opportunities, challenges or unforeseen circumstances, and we cannot be sure that additional financing will be available.**

We will require additional capital and debt financing to pursue our business objectives and respond to business opportunities, challenges or unforeseen circumstances, including to increase our marketing expenditures to improve our brand awareness, build and maintain our inventory of homes, develop new products or services or further improve existing products and services (including mortgage lending), enhance our operating infrastructure and acquire complementary businesses and technologies. During economic and housing downturns, including the recent downturn, credit markets have constricted and reduced sources of liquidity.

If cash on hand and cash generated from operations are not sufficient to meet our cash and liquidity needs, we may need to seek additional capital and engage in equity or debt financings to secure funds. However, additional funds may not be available when we need them on terms that are acceptable to us, or at all. In addition, any financing that we secure in the future could involve restrictive covenants which may make it more difficult for us to obtain additional capital and to pursue business opportunities.

Our ability to obtain financing will depend, among other things, on our product development efforts, business plans, operating performance and condition of the capital markets and housing markets at the time we seek financing. Volatility in the credit markets may also have an adverse effect on our ability to obtain debt financing. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, or may require us to agree to unfavorable terms, and our existing stockholders may experience significant dilution.

If new financing sources are required, but are insufficient or unavailable, our ability to continue to pursue our business objectives and to respond to business opportunities, challenges or unforeseen circumstances could be significantly limited, and our business, operating results, financial condition and prospects could be adversely affected.

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**We may use derivatives and other instruments to reduce our exposure to interest fluctuations and those derivatives and other instruments may not prove to be effective.**

We may use derivatives or other instruments to reduce our exposure to adverse changes in interest rates. Hedging interest rate risk is a complex process, requiring sophisticated models and constant monitoring. Due to interest rate fluctuations, hedged assets and liabilities will appreciate or depreciate in market value. The effect of this unrealized appreciation or depreciation will generally be offset by income or loss on the derivative instruments that are linked to the hedged assets and liabilities. If we engage in derivative transactions, we will be exposed to credit and market risk. If the counterparty fails to perform, credit risk exists to the extent of the fair value gain in the derivative. Market risk exists to the extent that interest rates change in ways that are significantly different from what we expected when we entered into the derivative transaction. Our hedging activity, if any, may fail to provide adequate coverage for interest rate exposure due to market volatility, hedging instruments that do not directly correlate with the interest rate risk exposure being hedged or counterparty defaults on obligations.

**Failures at financial institutions at which we deposit funds could adversely affect us.**

We deposit substantial funds in various financial institutions in excess of insured deposit limits. In the event that one or more of these financial institutions fail, there is no guarantee that we could recover the deposited funds in excess of federal deposit insurance. Under these circumstances, our losses could have a material adverse effect on our results of operations or financial condition.

**Risks Related to Our Capital Structure and Ownership of Our Class A Common Stock and Warrants**

**Future resales of common stock may cause the market price of our securities to drop significantly, even if our business is doing well.**

Certain of our equityholders were in the past subject to lock-up restrictions that have expired as of the date of this Annual Report on Form 10-K. Now that these lock-up restrictions have expired, such equityholders are not restricted from selling shares of our Class A common stock held by them, other than by applicable securities laws. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our securities. As restrictions on resale end, the sale or possibility of sale of these shares could have the effect of increasing the volatility in the market price of our Class A common stock, and the market price of our Class A common stock could decline if the holders of currently restricted shares or other stockholders sell their shares or are perceived by the market as intending to sell them.

**The provisions of our certificate of incorporation requiring exclusive forum in the Court of Chancery of the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.**

Our certificate of incorporation provides that, to the fullest extent permitted by law, and unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) and any appellate court thereof will be the sole and exclusive forum for (i) any derivative action, suit or proceeding brought on our behalf, (ii) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, stockholders or employees to us or our stockholders, (iii) any action, suit or proceeding arising pursuant to any provision of the General Corporation Law of the State of Delaware (the "DGCL") or our bylaws or certificate of incorporation (as each may be amended from time to time), (iv) any action, suit or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (v) any action, suit or proceeding asserting a claim against us or any current or former director, officer or stockholder governed by the internal affairs doctrine.

These provisions may have the effect of discouraging lawsuits against our directors and officers. The enforceability of similar choice of forum provisions in other companies' certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our certificate of incorporation to be inapplicable or unenforceable in such action.

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**We cannot predict the impact our multi-class structure may have on the stock price of our Class A common stock.**

We cannot predict whether our multi-class structure will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. For example, certain index providers have policies that restrict or prohibit the inclusion of companies with multiple-class share structures in certain of their indices, including the Russell 2000 and the S&P 500, S&P MidCap 400 and S&P SmallCap 600, which together make up the S&P Composite 1500. Beginning in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices; however, in October 2018, MSCI announced its decision to include equity securities "with unequal voting structures" in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria. Under the announced policies, our multi-class capital structure will make us ineligible for inclusion in certain indices, and as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track those indices will not be investing in our stock. It is possible that these policies may depress the valuations of publicly traded companies that are excluded from the indices compared to those of other similar companies that are included. Because of our multi-class structure, we will likely be excluded from certain of these indices and we cannot assure you that other stock indices will not take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from stock indices would likely preclude investment by many of these funds and could make shares of our Class A common stock less attractive to other investors. As a result, the market price of shares of our Class A common stock could be adversely affected.

**Our founder and Chief Executive Officer controls a significant percentage of our voting power and will be able to exert significant control over the direction of our business.**

Brian Bair, our founder and Chief Executive Officer, holds shares of our Class B common stock that entitle him and his permitted transferees to 10 votes per share of Class B common stock until the Sunset Date, which is defined as earlier of: (a) the date that is nine months following the date on which Mr. Bair (x) is no longer providing services, whether upon death, resignation, removal or otherwise, to us as a member of our senior leadership team, officer or director and (y) has not provided any such services for the duration of such nine-month period; and (b) the date as of which Mr. Bair and his permitted transferees, in the aggregate, more than 75% of the shares of our Class B common stock that were outstanding as of the closing of the Business Combination. As of January 31, 2023, Mr. Bair beneficially owned approximately 39.5% of the voting power of our company despite beneficially owning only 7.4% of our Class A common stock. Accordingly, for so long as Mr. Bair continues to control a significant percentage of the voting power of our company, he will be able to significantly influence the composition of our board and management and the approval of actions requiring stockholder approval. The concentration of ownership could also deprive you of an opportunity to receive a premium for your shares of Class A common stock as part of a sale of us and ultimately might affect the market price of our Class A common stock.

**Delaware law and our certificate of incorporation and bylaws contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.**

Our certificate of incorporation and bylaws and the DGCL contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our Class A common stock, and therefore depress the trading price. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the incumbent members of our board of directors or taking other corporate actions, including effecting changes in our management. Among other things, our certificate of incorporation and bylaws include provisions that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•authorize Class B common stock that entitle Brian Bair, our Chief Executive Officer and founder, to 10 votes per share of such stock until the Sunset Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•provide for a classified board of directors with staggered, three-year terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•permit our board of directors to issue shares of preferred stock, including "blank check" preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•following the Sunset Date, require that any action of our stockholders be effected only at a meeting of stockholders and not by written consent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•following the Sunset Date, provide that a director may be removed from office only for cause;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•following the Sunset Date, provide that vacancies on our board of directors can be filled only by the vote of directors then in office;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•limit the liability of, and provide for the indemnification of, our directors and officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•permit our board of directors to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•require a supermajority vote of stockholders to amend certain provisions of our certificate of incorporation and, following the Sunset Date, a supermajority vote of stockholders in order to amend the bylaws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•limit our ability to engage in business combinations with certain interested stockholders without certain approvals; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•mandate advance notice procedures with which stockholders must comply in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders' meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of our company.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board of directors or management.

**We do not intend to pay cash dividends for the foreseeable future.**

We currently intend to retain our future earnings, if any, to finance the further development and expansion of our business and do not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in agreements and financing instruments, business prospects and such other factors as our board of directors deems relevant.

**Exercise of outstanding warrants for our Class A common stock would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.**

As of December 31, 2022, we had 21,783,284 outstanding warrants to purchase shares of our Class A common stock, which became exercisable beginning on October 23, 2021. The exercise price of these warrants is $11.50 per share, subject to adjustment as contemplated by the terms of our warrant agreement. To the extent such warrants are exercised, additional shares of our Class A common stock will be issued, which will result in dilution to the holders of our common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of our Class A common stock. However, there is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless.

**There is no guarantee that the public warrants will ever be in the money, and they may expire worthless.**

The exercise price for our warrants is $11.50 per share of Class A common stock, subject to adjustment. There is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless.

**Registration of the offer and issuance of shares of our Class A common stock may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants and causing such warrants to expire worthless.**

We cannot assure you that we will be able to maintain an effective registration statement covering the offer and issuance of shares of our Class A common stock underlying our warrants. If the issuance of shares upon exercise of the warrants is not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder or an exemption from registration is available. Notwithstanding the above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a "covered security" under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a "cashless basis" in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. If and when the warrants become redeemable by us, we may

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exercise our redemption right even if we are unable to register or qualify the underlying shares of Class A common stock for sale under all applicable state securities laws.

**Our failure to meet the NYSE's continued listing standards could result in a delisting of our Class A common stock.**

On November 15, 2022, we were notified by the NYSE that we are not in compliance with Section 802.01C of the NYSE Listed Company Manual because the average closing price of our Class A common stock was less than $1.00 over a consecutive 30 trading-day period. The notice had no immediate impact on the listing of our Class A common stock, which will continue to be listed and traded on the NYSE during the period allowed to regain compliance, subject to our compliance with other listing standards. On November 16, 2022, we notified the NYSE that we intend to cure the stock price deficiency and to return to compliance with the NYSE continued listing standard. We can regain compliance at any time within the six-month period following receipt of the NYSE notice if on the last trading day of any calendar month during the cure period our Class A common stock has a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month. Under the NYSE's rules, if we determine that we will cure the stock price deficiency by taking an action that will require stockholder approval at our next annual meeting of stockholders, the price condition will be deemed cured if the price promptly exceeds $1.00 per share, and the price remains above that level for at least the following 30 trading days.

The delisting of our Class A common stock from the NYSE may make it more difficult for us to raise capital on favorable terms in the future. Such a delisting would likely have a negative effect on the price of our Class A common stock and would impair your ability to sell or purchase our Class A common stock when you wish to do so. Further, if we were to be delisted from the NYSE, our Class A common stock would cease to be recognized as covered securities and we would be subject to regulation in each state in which we offer our securities. Moreover, there is no assurance that any actions that we take to restore our compliance with Section 802.01C would stabilize the market price or improve the liquidity of our common stock, prevent our common stock from falling below the minimum bid price required for continued listing again or prevent future non-compliance with NYSE's listing standards. There is also no assurance that we will maintain compliance with the other listing standards of the NYSE. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing standards would allow our securities to become listed again, stabilize the market price or improve the liquidity of our securities, or prevent future non-compliance with NYSE's listing standards

**General Risks Related to Offerpad**

**We have incurred, and expect to continue to incur, increased costs as a result of operating as a public company, and our management has devoted and will continue to devote substantial time to new compliance initiatives.**

As a public company, we have incurred and expect to continue to incur significant legal, accounting and other expenses that we did not incur as a private company. As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as well as rules adopted, and to be adopted, by the SEC and the applicable stock exchange. Our management and other personnel, many of whom have limited experience managing a public company, have devoted and will continue to need to devote a substantial amount of time to these compliance initiatives and we expect these rules and regulations to substantially increase our legal and financial compliance costs and make some activities more time-consuming and costly. For instance, while we have already incurred substantial expenses in obtaining director and officer liability insurance, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance in the future and we may be forced to accept reduced policy limits or incur substantially higher costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

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**Our management has limited experience in operating a public company.**

Certain of our executive officers have limited experience in the management of a publicly traded company. Our management team may not successfully or effectively manage our transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of our management's time may be devoted to these activities which will result in less time being devoted to our management and growth. We may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal control over financial reporting required of public companies in the U.S. Our management will need to continually assess our staffing and training procedures to improve our internal control over financial reporting. Further, the development, implementation, documentation and assessment of appropriate processes, in addition to the need to remediate any potential deficiencies, will require substantial time and attention from management. The development and implementation of the standards and controls necessary for us to achieve the level of accounting standards required of a public company in the U.S. may require costs greater than expected. It is possible that we will be required to expand our employee base and hire additional employees to support our operations as a public company which will increase its operating costs in future periods.

**Some of our potential losses may not be covered by insurance. We may not be able to obtain or maintain adequate insurance coverage.**

We maintain insurance to cover costs and losses from certain risk exposures in the ordinary course of our operations, but our insurance may not cover all of the costs and losses from all events. We are responsible for certain retentions and deductibles that vary by policy, and we may suffer losses that exceed our insurance coverage limits by a material amount. We may also incur costs or suffer losses arising from events against which we have no insurance coverage. In addition, large-scale market trends or the occurrence of adverse events in our business may raise our cost of procuring insurance or limit the amount or type of insurance we are able to secure. We may not be able to maintain our current coverage, or obtain new coverage in the future; on commercially reasonable terms or at all. Incurring uninsured or underinsured costs or losses could harm our business.

**Our results of operations and financial condition are subject to management's accounting judgments and estimates, as well as changes in accounting policies.**

The preparation of our financial statements requires us to make estimates and assumptions affecting the reported amounts of our assets, liabilities, revenues and expenses. If these estimates or assumptions are incorrect, it could have a material adverse effect on our results of operations or financial condition. Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board, the American Institute of Certified Public Accountants, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change.

**Our management is required to evaluate the effectiveness of our internal control over financial reporting. If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy of our financial reports.**

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. Pursuant to Section 404 of the Sarbanes-Oxley Act, we are required to evaluate and determine the effectiveness of our internal control over financial reporting, and our auditor is required, beginning with this Annual Report, to deliver an attestation report on the effectiveness of our internal control over financial reporting. An adverse report may be issued in the event our auditor is not satisfied with the level at which our controls are documented, designed or operating.

When evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. If we identify any material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is ineffective, or if our auditor is unable to express an opinion as to the effectiveness of our internal control over financial reporting, we could fail to meet our reporting obligations or be required to restate our financial statements for prior periods.

In addition, our internal control over financial reporting will not prevent or detect all errors and fraud. Because of the inherent limitations in all control systems, no evaluation can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

If there are material weaknesses or failures in our ability to meet any of the requirements related to the maintenance and reporting of our internal control, investors may lose confidence in the accuracy and completeness of our financial reports and that could cause the price of our Class A common stock to decline. In addition, we could become subject to investigations by

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the applicable stock exchange, the SEC or other regulatory authorities, which could require additional management attention and which could adversely affect our business.

**We may acquire other businesses which could require significant management attention, disrupt our business, dilute stockholder value and adversely affect our operating results.**

As part of our business strategy, we may make investments in or acquire other companies, products or technologies. We may not realize benefits from any acquisition that we may make in the future. If we fail to integrate successfully such acquisitions, or the businesses and technologies associated with such acquisitions, into our company, the revenue and operating results of the combined company could be adversely affected. Any integration process will require significant time and resources, and we may not be able to manage the process successfully. We may not successfully evaluate or utilize the acquired business or technology and accurately forecast the financial impact of an acquisition transaction, including accounting charges. We may have to pay cash, incur debt or issue equity securities to pay for any such acquisition, each of which could affect our financial condition or the value of our capital stock. The sale of equity or issuance to finance any such acquisitions could result in dilution to our stockholders. The incurrence of indebtedness in connection with an acquisition would result in increased fixed obligations and could also include covenants or other restrictions that may impede our ability to manage our operations.

**We are and will continue to be dependent on key personnel, and our failure to attract and retain other highly qualified personnel could harm our business.**

Our success depends upon the continued service of our senior management team and successful transitions when management team members pursue other opportunities. In addition, our business depends on our ability to continue to attract, motivate and retain a large number of skilled employees across all of our product and service lines. Furthermore, much of our key technology and processes are custom-made for our business by our personnel. The loss of key personnel, including key members of management, as well as our engineering, product development, home operations, marketing, sales and support, finance and legal personnel could materially and adversely affect our ability to build on the efforts they have undertaken and to execute our business plan, and we may not be able to find adequate replacements. If we do not succeed in attracting well-qualified employees or retaining and motivating existing employees in a cost-effective manner, our business could be harmed.

**We may issue additional shares of common stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of your shares.**

We may issue additional shares of common stock or other equity securities of equal or senior rank in the future in connection with, among other things, future acquisitions, repayment of outstanding indebtedness or under our incentive plan or employee stock purchase plan, without stockholder approval, in a number of circumstances.

Our issuance of additional shares of common stock or other equity securities of equal or senior rank could have the following effects:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•your proportionate ownership interest in our company will decrease;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the relative voting strength of each previously outstanding share of our common stock may be diminished; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the market price of our shares may decline.

**A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.**

An active trading market for our securities may not be sustained. In addition, the price of our securities can vary due to general economic conditions and forecasts, our general business condition and the release of our financial reports.

In the absence of a liquid public trading market:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•you may not be able to liquidate your investment in our securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•you may not be able to resell your securities at or above the price at which you acquired them;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the market price of shares of our securities may experience significant price volatility; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•there may be less efficiency in carrying out your purchase and sale orders.

Additionally, if our securities become delisted from the NYSE for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if our securities were quoted or listed on the NYSE or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

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**The market price of our securities may be volatile.**

The trading price of our securities has fluctuated and may continue to fluctuate substantially and may be lower than the price at which you purchase such securities. This is especially true for companies like ours with a small public float. The trading price of our Class A common stock will depend on many factors, including those described in this "Risk Factors" section, many of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment.

Factors affecting the trading price of our securities may include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to ours;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in the market's expectations about our operating results;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the public's reaction to our press releases, other public announcements and filings with the SEC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•speculation in the press or investment community;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•actual or anticipated developments in our business, competitors' businesses or the competitive landscape generally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the operating results failing to meet the expectation of securities analysts or investors in a particular period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in financial estimates and recommendations by securities analysts concerning us or the market in general;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•operating and stock price performance of other companies that investors deem comparable to ours;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in laws and regulations affecting our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•commencement of, or involvement in, litigation involving us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the volume of our Class A common stock available for public sale;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•any major change in our board of directors or management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•sales of substantial amounts of our Class A common stock by our directors, officers or significant stockholders or the perception that such sales could occur;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•general economic and political conditions such as recessions, interest rate levels, "trade wars," pandemics (such as COVID-19) and acts of war or terrorism; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•other risk factors listed under "Risk Factors."

Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general and the NYSE have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

In addition, in the past, following periods of volatility in the overall market and the market prices of particular companies' securities, securities class action litigations have often been instituted against these companies. Litigation of this type, if instituted against us, could result in substantial costs and a diversion of our management's attention and resources. Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments.

Our quarterly operating results may fluctuate significantly and could fall below the expectations of securities analysts and investors due to a variety of factors, some of which are beyond our control, resulting in a decline in our stock price.

**If securities or industry analysts cease publishing research or reports about us, our business or our market, or if they adversely change their recommendations regarding our Class A common stock, then the price and trading volume of our securities could decline.**

The trading market for our securities will be influenced by the research and reports that industry or securities analysts may publish about us, our business and operations, our market, or our competitors. If any of the analysts who cover us adversely change their recommendation regarding our securities, or provide more favorable relative recommendations about our competitors, the price of our Class A common stock and warrants would likely decline. If any analyst who may cover us were

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to cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

**The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results.**

There has been increasing public focus by investors, customers environmental activists, the media and governmental and nongovernmental organizations on a variety of environmental, social and other sustainability matters. We may experience pressure to make commitments relating to sustainability matters that affect us, including the design and implementation of specific risk mitigation strategic initiatives relating to sustainability. If we are not effective in addressing environmental, social and other sustainability matters affecting our business, or setting and meeting relevant sustainability goals, our reputation and financial results may suffer. We may experience increased costs in order to execute upon our sustainability goals and measure achievement of those goals, which could have an adverse impact on our business and financial condition.

In addition, this emphasis on environmental, social and other sustainability matters has resulted and may result in the adoption of new laws and regulations, including new reporting requirements. If we fail to comply with new laws, regulations or reporting requirements, our reputation and business could be adversely impacted.

**Item 1B. Unresolved Staff Comments.** 

None.

**Item 2. Properties.** 

We lease our corporate headquarters in Chandler, Arizona, along with field office facilities in most of the metropolitan markets in which we operate in the United States.

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**Item 3. Legal Proceedings.** 

From time to time, we may become involved in actions, claims, suits and other legal proceedings arising in the ordinary course of our business, including assertions by third parties relating to intellectual property infringement, breaches of contract or warranties or employment-related matters. We are not currently a party to any actions, claims, suits or other legal proceedings the outcome of which, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, financial condition, results of operations and cash flows.

The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against us in a reporting period for amounts above management's expectations, our financial condition, results of operations or cash flows for that reporting period could be adversely impacted, perhaps materially.

**Item 4. Mine Safety Disclosures.**

Not applicable.

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**PART II**

**Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.** 

**Market Information for Common Stock**

**Class A Common Stock**

Our Class A common stock and warrants are traded on the New York Stock Exchange ("NYSE") under the symbols "OPAD" and "OPAD WS," respectively.

**Class B Common Stock**

There is no established public trading market for our Class B common stock.

**Holders of Record**

As of February 17, 2023, there were 43 registered holders of our Class A common stock, and four registered holders of our warrants that were issued in connection with the Business Combination. Because many of our shares of Class A common stock are held by banks, brokers and other financial institutions on behalf of shareholders, there are a greater number of shareholders represented by these registered holders.

All shares of our Class B common stock are owned by Brian Bair, the Chief Executive Officer and Founder of the Company, or entities controlled by Mr. Bair.

There are no issued and outstanding shares of our Class C common stock.

**Dividends**

Our Class A and Class B common stock are entitled to dividends if and when any dividend is declared by our board of directors, subject to the rights of all classes of stock outstanding having priority rights to dividends. We have not paid any cash dividends on common stock to date. We may retain future earnings, if any, for the further development and expansion of our business and have no current plans to pay cash dividends for the foreseeable future. Any future determination to pay dividends will be made at the discretion of our board of directors and will depend on, among other things, our financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as our board of directors may deem relevant.

**Sales of Unregistered Equity Securities**

None.

**Purchase of Equity Securities**

We did not repurchase shares of our Class A common stock during the three months ended December 31, 2022.

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**Stock Performance Graph**

The following graph illustrates the total return from September 1, 2021 through December 31, 2022, for (i) our Class A common stock, (ii) the Russell 2000 Index, and (iii) the NASDAQ Real Estate and Other Financial Services Index. The graph assumes that $100 was invested on September 1, 2021 in each of our Class A common stock, the Russell 2000 Index, and the NASDAQ Real Estate and Other Financial Services Index, and that any dividends were reinvested. The comparisons reflected in the graph are not intended to forecast the future performance of our stock and may not be indicative of our future performance.

![img221734950_1.jpg](img221734950_1.jpg)

**Item 6. [Reserved]** 

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**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.** 

The following discussion and analysis provides information that Offerpad's management believes is relevant to an assessment and understanding of Offerpad's consolidated results of operations and financial condition. The discussion should be read together with the consolidated financial statements and accompanying notes included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. This section of this Form 10-K generally discusses 2022 items and the results of our operations for the year ended December 31, 2022 compared to the year ended December 31, 2021. A discussion of the year ended December 31, 2021 compared to the year ended December 31, 2020 has been reported previously in the 2021 Annual Report on Form 10-K, which was filed with the SEC on March 7, 2022, under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations."

This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. See "Cautionary Note Regarding Forward-Looking Statements" in this Form 10-K. Offerpad's actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" in Item 1A of this Form 10-K.

**Overview**

**Our Business**

Offerpad is a customer-centric, home buying and selling platform that provides customers with the ultimate home transaction experience, offering convenience, control, certainty, and value. Since our founding in 2015, we have created a pioneering iBuying company and leading on-demand real estate marketplace that has transacted on homes representing approximately $9.4 billion of aggregate revenue through December 31, 2022.

We are headquartered in Chandler, Arizona and operated in over 1,800 cities and towns in 28 metropolitan markets across 16 states as of December 31, 2022. As we expand further into our existing markets, launch new markets, and develop a wide range of new ancillary services, we look forward to bringing our mission of providing your best way to buy and sell a home to even more homeowners and prospective home purchasers across the country.

**The Business Combination**

On September 1, 2021, the Company was formed through a business combination (the "Business Combination") with Supernova Partners Acquisition Company, Inc. ("Supernova"). In connection with the closing of the Business Combination, Supernova changed its name to Offerpad Solutions Inc. The Business Combination was accounted for as a reverse recapitalization.

As a result of the Business Combination, we became an SEC-registered and New York Stock Exchange ("NYSE") listed company, which has required us to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We have incurred and expect to continue to incur additional annual operating expenses as a public company for, among other things, directors' and officers' liability insurance, director fees, and additional internal and external accounting, legal and administrative resources.

**Current Economic Conditions and Health of the U.S. Residential Real Estate Industry**

Our business and operating results are impacted by the general economic conditions and the health of the U.S. residential real estate industry, particularly the single-family home resale market. Our business model depends on a high volume of residential real estate transactions throughout the markets in which we operate. This transaction volume affects all of the ways that we generate revenue, including our ability to acquire new homes and generate associated fees, and our ability to sell homes that we own.

During 2022, the residential real estate market conditions were highly volatile, with generally favorable conditions during the first half of the year, with strong consumer demand and home price appreciation, resulting from a limited supply of new and resale single-family homes on the market, low mortgage interest rates and steady employment and wage growth. However, toward the end of the second quarter of 2022 and continuing through the remainder of the year, consumer demand for residential real estate softened considerably compared to the corresponding prior year periods and much of the first half of 2022, as the combination of the sudden and significant increase in mortgage interest rates since early 2022, increased inflation in the broader economy, volatility and declines in the stock market, and various other macroeconomic conditions and geopolitical concerns impacted consumer budgets and confidence. These macroeconomic factors negatively impacted housing affordability and homebuyer sentiment, causing many prospective customers to delay their homebuying decisions.

These turbulent residential real estate market conditions during 2022 significantly impacted our operating results during the year. Our revenue increased by $1.9 billion, or 90.9%, during the year ended December 31, 2022 as compared to the year ended December 31, 2021, primarily due to the strong consumer demand and home price appreciation prevailing in the first half of 2022. However, this year-over-year increase in revenue was negatively impacted by the challenging market conditions

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during the second half of 2022, which resulted in sequential declines in our quarterly revenue in the third and fourth quarters of 2022 compared to the respective prior quarter periods. Further, during the second half of 2022, we experienced an increase in the average period of time our homes are being held in inventory, causing an increase in holding costs and downward pressure on sales prices and margins.

If these macroeconomic trends continue for an extended period of time, we expect these factors will continue to negatively impact housing affordability and homebuyer sentiment, and result in a decline in the demand for our homes and the services offered by our platform, which could materially impact our financial condition and results of operations.

**New York Stock Exchange Delisting Notice**

On November 15, 2022, we were notified by the NYSE that we are not in compliance with Section 802.01C of the NYSE Listed Company Manual because the average closing price of our Class A common stock was less than $1.00 over a consecutive 30 trading-day period. The notice does not result in the immediate delisting of our Class A common stock from the NYSE.

On November 16, 2022, we notified the NYSE that we intend to cure the stock price deficiency and to return to compliance with the NYSE continued listing standard. We can regain compliance at any time within the six-month period following receipt of the NYSE notice if on the last trading day of any calendar month during the cure period we have a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month. We intend to consider available alternatives, including, but not limited to, a reverse stock split, subject to stockholder approval no later than at our next annual meeting of stockholders, if necessary to cure the stock price non-compliance. Under the NYSE's rules, if we determine that we will cure the stock price deficiency by taking an action that will require stockholder approval at our next annual meeting of stockholders, the price condition will be deemed cured if the price promptly exceeds $1.00 per share, and the price remains above that level for at least the following 30 trading days.

Our Class A common stock will continue to be listed and trade on the NYSE during this period, subject to our compliance with other NYSE continued listing standards.

For additional information, see "Risk Factors—Risks Related to Our Capital Structure and Ownership of Our Class A Common Stock and Warrants—Our failure to meet the NYSE's continued listing standards could result in a delisting of our Class A common stock."

**Our Business Model**

**Revenue Model**

Our mission is to provide your best way to buy and sell a home. Period. Offerpad was founded to create a better residential real estate experience by combining advanced technology solutions with fundamental industry expertise. Our Express cash offer service is our flagship offering, allowing customers to sell on their own schedule and without the hassle of showings, open houses, and aligning closing dates with the purchase date of their new home. However, this is only one of several offerings within our Solutions Center designed to meet the unique needs of our customers. With our Offerpad Flex listing service offering, customers partner with Offerpad to list their home for sale on the open market while utilizing Offerpad's concierge and renovation services, as well as work with an Offerpad Solutions Expert to help them find their next home. Through the Offerpad Flex listing service offering, our customers essentially dual track a sale by utilizing both our personalized listing services while also typically having a backup cash offer.

We typically acquire homes directly from individual sellers. After purchasing the home, we make necessary repairs and upgrades before listing it for sale on our platforms and Multiple Listing Services ("MLS"). We resell these homes to both individual consumer and institutional investor buyers. Currently, revenues from home sales through our Express cash offer service are our primary source of revenue; however, we expect greater contribution from our Flex listing service offering as we drive expansion of this offering and from ancillary services in the future as our full product offering expands and matures.

**Offers**

We generate demand for our services through traditional media, digital media, organic referral, and partnership channels. Partnership channels include relationships with homebuilders, brokerages, and complementary industry partners. Interested home sellers visit our desktop or mobile website or application and fill out a short questionnaire about their home. If the home fits our eligible criteria, an Offerpad employee will reach out within 24 hours via email, phone, or text to deliver and discuss Offerpad's cash purchase offer and review any other services that may be of interest to the customer, including our Flex listing and buyer representation services and our mortgage solutions offerings. If a customer chooses to list their home with our Offerpad Flex listing service, once a customer sells a home directly to a buyer using the Flex listing service, we earn a service fee, typically as a percentage of the sales price of the home.

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**Home Acquisition and Renovation**

Once the offer is received and reviewed by the customer, if they choose to proceed, a purchase contract is generated and signed. If the customer is represented by a third-party agent, we work directly with such agent in addition to paying the agent's fee. Upon signing, an Offerpad employee and a third-party inspector visit the home (either virtually or in person) to verify the information gathered during underwriting and identify any necessary repairs. Once repairs are agreed upon (if any), the homeowner chooses the closing date that meets their needs. The ability to choose the closing date is a very important feature, as it allows the homeowner to close around buying their next home or other influential events.

If renovations were deemed necessary in the underwriting process, an Offerpad Project Manager will begin coordinating the renovation after we close on the home purchase. We utilize a mix of Offerpad employed foreman and crew members as well as third-party specialists to execute necessary renovations. Our renovation strategy is focused on maximizing return through accretive upgrades and ensuring the home is in list-ready condition and is continually refined based on market level trends. We actively manage our vendor network through quality, cost, and timeliness evaluations.

**Home Resale**

Post-renovation, an Offerpad employee completes a final walkthrough to ensure the renovation was performed according to plan and quality specifications. Efficiently turning over our inventory is important as we incur holding costs (including property taxes, insurance, utilities, and homeowner association dues) and financing costs while we own the home. However, we routinely make strategic decisions or offer services that are designed to generate improved returns even if resulting in an increase in average inventory holding period. In order to minimize the sales period, we market our homes across a wide variety of websites and platforms to generate buyer demand. This includes the Offerpad website and mobile app, local MLS, and syndication across online real estate portals.

Prior to listing the home for sale, an Offerpad Asset Manager will reevaluate the current market and comparable properties using the same underwriting technology as is used in the buying process to price the home accordingly. Our acquisition and resale teams work closely to ensure market level trends are captured and anticipated in pricing decisions. The ultimate goal during the resale process is to maximize return on investment when considering pricing and holding periods.

Once a purchase offer is received on a home, we enter into negotiations with the buyer and upon agreement of price, terms and conditions, we enter into a purchase contract. If the buyer is represented by an agent, we work directly with the agent. The buyer then conducts a customary inspection of the home and takes possession of the home upon funding and closing. We pay agent commissions for home buyers out of funds received at closing.

**Factors Affecting Our Performance**

We believe that our performance and future success depend on a variety of factors that present significant opportunities for our business but also present risks and challenges that could adversely impact our growth and profitability, including those discussed below and in Part I, Item 1A. "Risk Factors" of this Form 10-K.

**Market Penetration in Existing Markets**

Residential real estate is one of the largest industries, with roughly $2.3 trillion in value of homes transacted in 2022 in the United States, and is highly fragmented with over 100,000 real estate brokerages, according to the National Association of Realtors (NAR). In 2022, we estimate that we captured roughly 0.9% market share across our then active 28 markets. Given this high degree of fragmentation, we believe that bringing a solutions-oriented approach to the market with multiple buying and selling services to meet the unique needs of customers could lead to continued market share growth and accelerated adoption of the digital model. We have demonstrated higher market share in certain markets, providing the backdrop to grow our overall market penetration as our offerings expand and evolve. By providing a consistent, transparent, and unique experience, we expect to continue to build upon our past success and further strengthen our brand and consumer adoption.

**Expansion into New Markets**

Since our launch in 2015, we have expanded into 21 markets as of the end of 2021, and during 2022, we expanded into seven additional markets, bringing our total markets served to 28 as of December 31, 2022.

Our 28 markets as of December 31, 2022 covered roughly 24% of the 5.6 million homes sold in the United States in 2022. Given this current coverage, we believe there is significant opportunity to both increase market penetration in our existing markets and to grow our business through new market expansion, although new market expansion typically generates lower initial margins as we begin operations that increase as we scale volumes. Also, because of our strategic approach to renovations, as well as the listing and buyer representation of our Flex listing service product, we believe a significant portion of the total addressable market is serviceable with our business model.

While we intend to be flexible in assessing market entry points, we will generally look to expand into new markets with qualities similar to our existing markets, including median price point, annual transaction count, as well as strong presence of

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new homebuilders. We believe the scale and versatility of our platform will allow us to continue to expand into new markets, with our primary barriers to entry consisting largely of capital needed to expand operations and the tendency of consumers to adopt our real estate offerings. Given the recent volatility in the residential real estate market conditions, we currently do not anticipate expanding into any new markets in the first half of 2023 and expect to re-evaluate expansion plans in the second half of the year.

**Ancillary Products and Services**

Core to our long-term strategy is a suite of offerings to meet the unique needs of our customers. As such, we view adding both additional products and services as well as additional product specific features as critical to supporting this strategy. We aim to deliver our offerings to customers in a smooth, efficient, digital driven platform, focused on transparency and ease of use. The primary goal is to be able to offer multiple services tied to the core real estate transaction, allowing customers to bundle and save. Although further developing these products and services will require significant investment, growing our current offerings and offering additional ancillary products and services, potentially including stand-alone remodel services, energy efficiency solutions, smart home technology, insurance, moving services, and home warranty services, we believe will strengthen our unit economics and allow us to better optimize pricing. Generally, the revenue and margin profiles of our ancillary products and services are different from our Express cash offering service that accounts for the vast majority of our revenue, with most ancillary products and services having a smaller average revenue per transaction than our Express cash offering service, but a higher margin.

Below is a summary of our current ancillary products and services:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Concierge Listing Service: While partnering with Offerpad, the customer will be provided with complementary list-ready services to prepare their home for market, such as carpet cleaning, landscape and pool maintenance, and handyman services. Customers also have the ability to utilize Offerpad's renovation advance program to complete strategic upgrades to maximize the resale value of the home.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Offerpad Home Loans ("OPHL"): We provide access to mortgage services through our in-house mortgage solution, OPHL, or through a third-party lending partner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Bundle Rewards: The Offerpad Bundle Rewards program allows customers to receive multiple discounts when selling and buying a home with Offerpad, and by obtaining their home loan with OPHL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Title and Escrow: To deliver title and escrow closing services, we have a national relationship with a leading title and escrow company, through which we are able to leverage our size and scale to provide exceptional service with favorable economics.

**Unit Economics**

We view Contribution Margin and Contribution Margin after Interest (see "—Non-GAAP Financial Measures") as key performance indicators for unit economic performance, which are currently primarily driven by our Express cash offer transactions. Future financial performance improvements are expected to be driven by expanding unit level margins through initiatives such as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Continued optimization of acquisition, renovation, and resale processes, as we expand our market footprint and increase penetration in existing markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Effectively increasing our Flex listing service business alongside the Express cash offer business, optimizing customer engagement and increasing conversion of requests for home purchases; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Introducing and scaling additional ancillary services to complement our core Express cash offer and Flex listing service products.

**Operating Leverage**

We utilize our technology and product teams to design systems and workflows to make our operations teams more efficient and able to support and scale with the business. Many positions are considered volume based, and as we continue to grow, we focus on developing more automation tools to gain additional leverage. Additionally, as we continue to grow the business, we expect to be able to gain operating leverage on portions of our cost structure that are more fixed in nature as opposed to purely variable. These types of costs include general and administrative expenses and certain marketing and information technology expenses, which grow at a slower pace than proportional to revenue growth.

**Inventory Financing**

Our business model requires significant capital to purchase inventory homes. Inventory financing is a key enabler to our growth and we rely on our non-recourse asset-backed financing facilities, which primarily consist of senior and mezzanine secured credit facilities to finance our home purchases. The loss of adequate access to these types of facilities, or the inability

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to maintain these types of facilities on favorable terms, would impair our performance. See "—Liquidity and Capital Resources—Financing Activities."

**Seasonality**

The residential real estate market is seasonal and varies from market to market. Typically, the greatest number of transactions occur in the spring and summer, with fewer transactions occurring in the fall and winter. Our financial results, including revenue, margins, inventory, and financing costs, have historically had seasonal characteristics generally consistent with the residential real estate market, a trend we expect to continue in the future, subject to the market conditions discussed above.

**Risk Management**

Our business model is based upon acquiring homes at a price which will allow us to provide a competitive offer to the consumer, while being able to add value through the renovation process, and relist the home so that it sells at a profit and in a relatively short period of time. We have invested significant resources into our underwriting and asset management systems. Our real estate operations team, including our acquisitions team, together with our software engineering and data science teams are responsible for underwriting accuracy, portfolio health, and workflow optimization. Our underwriting tools are constantly updated with inputs from third-party data sources, proprietary data sources as well as internal data to adjust to the latest market conditions. This allows us to assess and adjust to changes in the local housing market conditions based on our technology, analysis and local real estate experience, in order to mitigate our risk exposure. Further, our listed homes are in market-ready and move-in ready condition following the repairs and renovations we conduct.

Historically, we have been able to manage our portfolio risk in part by our ability to manage holding periods for our inventory. Traditionally, resale housing pricing moves gradually through cycles; therefore, shorter inventory holding periods limit pricing exposure. As we increased our scale and improved our workflow optimization in prior years, our average inventory holding period of homes sold improved from 138 days in 2016 to 95 days in both 2019 and 2020. Our average inventory holding period of homes sold further decreased to 76 days during 2021, which was primarily due to the favorable housing market conditions across our markets in 2021.

During 2022, the residential real estate market conditions were highly volatile, with generally favorable conditions during the first half of the year, shifting to considerable softening in consumer demand for residential real estate during the second half of the year as a result of various macroeconomic factors negatively impacting housing affordability and homebuyer sentiment. Given our focus on risk management, and in response to this softening consumer demand, we adjusted our home purchase criteria through more conservative acquisition underwriting, resulting in higher expected internal rates of return based on current market conditions, and continued to adjust pricing on our inventory to reflect market level trends throughout the second half of 2022. These actions resulted in a significant reduction in our home acquisition pace to allow us to manage overall inventory growth, which led to the average holding period of homes sold increasing to 101 days during 2022, which is consistent with our expected average inventory holding period and our historical norm. As our overall inventory mix shifts and includes a lower composition of newer acquired homes, our average inventory holding period generally increases. As a result, and given our reduction in home acquisition pace, we anticipate our average inventory holding period will continue to increase in early 2023.

The increase in the average period of time our homes are being held in inventory has caused an increase in holding costs and downward pressure on sales prices and margins. If these macroeconomic trends continue for an extended period of time, we expect these factors will continue to negatively impact sales prices and margins.

**Non-GAAP Financial Measures**

In addition to our results of operations below, we report certain financial measures that are not required by, or presented in accordance with, U.S. generally accepted accounting principles ("GAAP"). These measures have limitations as analytical tools when assessing our operating performance and should not be considered in isolation or as a substitute for GAAP measures, including gross profit and net income. We may calculate or present our non-GAAP financial measures differently than other companies who report measures with similar titles and, as a result, the non-GAAP financial measures we report may not be comparable with those of companies in our industry or in other industries.

Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins)

To provide investors with additional information regarding our margins, we have included Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins), which are non-GAAP financial measures. We believe that Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest are useful financial measures for investors as they are used by management in evaluating unit level economics and operating performance across our markets. Each of these measures is intended to present the economics related to homes sold during a given period. We do so by including revenue generated from homes sold (and ancillary services) in the period and only the expenses that are directly attributable to such home sales, even if such expenses were recognized in prior periods, and excluding expenses related to homes that remain in

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inventory as of the end of the period presented. Contribution Profit provides investors a measure to assess Offerpad's ability to generate returns on homes sold during a reporting period after considering home acquisition costs, renovation and repair costs, and adjusting for holding costs and selling costs. Contribution Profit After Interest further impacts gross profit by including interest costs (including senior and mezzanine secured credit facilities) attributable to homes sold during a reporting period. We believe these measures facilitate meaningful period over period comparisons and illustrate our ability to generate returns on assets sold after considering the costs directly related to the assets sold in a presented period.

Adjusted Gross Profit, Contribution Profit and Contribution Profit After Interest (and related margins) are supplemental measures of our operating performance and have limitations as analytical tools. For example, these measures include costs that were recorded in prior periods under GAAP and exclude, in connection with homes held in inventory at the end of the period, costs required to be recorded under GAAP in the same period.

Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. We include a reconciliation of these measures to the most directly comparable GAAP financial measure, which is gross profit.

Adjusted Gross Profit / Margin

We calculate Adjusted Gross Profit as gross profit under GAAP adjusted for (1) net inventory impairment plus (2) interest expense associated with homes sold in the presented period and recorded in cost of revenue. Net inventory impairment is calculated by adding back the inventory impairment charges recorded during the period on homes that remain in inventory at period end and subtracting the inventory impairment charges recorded in prior periods on homes sold in the current period. We define Adjusted Gross Margin as Adjusted Gross Profit as a percentage of revenue.

We view this metric as an important measure of business performance, as it captures gross margin performance isolated to homes sold in a given period and provides comparability across reporting periods. Adjusted Gross Profit helps management assess performance across the key phases of processing a home (acquisitions, renovations, and resale) for a specific resale cohort.

Contribution Profit / Margin

We calculate Contribution Profit as Adjusted Gross Profit, minus (1) direct selling costs incurred on homes sold during the presented period, minus (2) holding costs incurred in the current period on homes sold during the period recorded in sales, marketing, and operating, minus (3) holding costs incurred in prior periods on homes sold in the current period recorded in sales, marketing, and operating, plus (4) other income which is primarily comprised of interest income earned on our cash and cash equivalents and income earned from the sale of certain fixed assets. The composition of our holding costs is described in the footnotes to the reconciliation table below. We define Contribution Margin as Contribution Profit as a percentage of revenue.

We view this metric as an important measure of business performance as it captures the unit level performance isolated to homes sold in a given period and provides comparability across reporting periods. Contribution Profit helps management assess inflows and outflow directly associated with a specific resale cohort.

Contribution Profit / Margin After Interest

We define Contribution Profit After Interest as Contribution Profit, minus (1) interest expense associated with homes sold in the presented period and recorded in cost of revenue, minus (2) interest expense associated with homes sold in the presented period, recorded in costs of sales, and previously excluded from Adjusted Gross Profit, and minus (3) interest expense under our senior and mezzanine secured credit facilities incurred on homes sold during the period. This includes interest expense recorded in prior periods in which the sale occurred. Our senior and mezzanine secured credit facilities are secured by our homes in inventory and drawdowns are made on a per-home basis at the time of purchase and are required to be repaid at the time the homes are sold. See "—Liquidity and Capital Resources—Financing Activities." We define Contribution Margin After Interest as Contribution Profit After Interest as a percentage of revenue.

We view this metric as an important measure of business performance. Contribution Profit After Interest helps management assess Contribution Margin performance, per above, when fully burdened with costs of financing.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 47

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The following table presents a reconciliation of our Adjusted Gross Profit, Contribution Profit and Contribution Profit After Interest to our gross profit, which is the most directly comparable GAAP measure, for the periods indicated:

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| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
| (in thousands, except percentages and homes sold, unaudited) | **2022** | **2021** |
| **Gross profit (GAAP)** | $**182422** | $**207815** |
| Gross margin | 4.6% | 10.0% |
| Homes sold | 10635 | 6373 |
| **Gross profit per home sold** | $**17.2** | $**32.6** |
| Adjustments: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory impairment - current period (1) | 58413 | 1205 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory impairment - prior period (2) | (1205) | (160) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense capitalized (3) | 12660 | 6294 |
| **Adjusted gross profit** | $**252290** | $**215154** |
| Adjusted gross margin | 6.4% | 10.4% |
| Adjustments: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Direct selling costs (4) | (97381) | (48066) |
| &nbsp;&nbsp;&nbsp;&nbsp;Holding costs on sales - current period (5)(6) | (8342) | (4262) |
| &nbsp;&nbsp;&nbsp;&nbsp;Holding costs on sales - prior period (5)(7) | (918) | (214) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income (8) | 1532 | 248 |
| **Contribution profit** | $**147181** | $**162860** |
| Contribution margin | 3.7% | 7.9% |
| Homes sold | 10635 | 6373 |
| **Contribution profit per home sold** | $**13.8** | $**25.6** |
| Adjustments: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense capitalized (3) | (12660) | (6294) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense on homes sold - current period (9) | (32022) | (10228) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense on homes sold - prior period (10) | (3737) | (468) |
| **Contribution profit after interest** | $**98762** | $**145870** |
| Contribution margin after interest | 2.5% | 7.0% |
| Homes sold | 10635 | 6373 |
| **Contribution profit after interest per home sold** | $**9.3** | $**22.9** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Inventory impairment – current period is the inventory valuation adjustments recorded during the period presented associated with homes that remain in inventory at period end.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Inventory impairment – prior period is the inventory valuation adjustments recorded in prior periods associated with homes that sold in the period presented.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Interest expense capitalized represents all interest related costs, including senior and mezzanine secured credit facilities, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Direct selling costs represents selling costs incurred related to homes sold in the period presented. This primarily includes broker commissions and title and escrow closing fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Holding costs primarily include insurance, utilities, homeowners association dues, property taxes, cleaning and maintenance costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)Represents holding costs incurred on homes sold in the period presented and expensed to Sales, marketing, and operating on the Consolidated Statements of Operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)Represents holding costs incurred in prior periods on homes sold in the period presented and expensed to Sales, marketing, and operating on the Consolidated Statements of Operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8)Other income principally represents interest income earned on our cash and cash equivalents and income earned from the sale of certain fixed assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)Represents both senior and mezzanine interest expense incurred on homes sold in the period presented and expensed to interest expense on the Consolidated Statements of Operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10)Represents both senior and mezzanine secured credit facilities interest expense incurred in prior periods on homes sold in the period presented and expensed to interest expense on the Consolidated Statements of Operations.

Adjusted Net Income (Loss) and Adjusted EBITDA

We also present Adjusted Net Income (Loss) and Adjusted EBITDA, which are non-GAAP financial measures, which our management team uses to assess our underlying financial performance. We believe these measures provide insight into period over period performance, adjusted for non-recurring or non-cash items.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 48

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We calculate Adjusted Net Income (Loss) as GAAP Net Income (Loss) adjusted for the change in fair value of warrant liabilities. We define Adjusted Net Income (Loss) Margin as Adjusted Net Income (Loss) as a percentage of revenue.

We calculate Adjusted EBITDA as Adjusted Net Income (Loss) adjusted for interest expense, amortization of capitalized interest, taxes, depreciation and amortization and stock-based compensation expense. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue.

Adjusted Net Income (Loss) and Adjusted EBITDA are supplemental to our operating performance measures calculated in accordance with GAAP and have important limitations. For example, Adjusted Net Income (Loss) and Adjusted EBITDA exclude the impact of certain costs required to be recorded under GAAP and could differ substantially from similarly titled measures presented by other companies in our industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.

The following table presents a reconciliation of our Adjusted Net Income (Loss) and Adjusted EBITDA to our GAAP Net Income (Loss), which is the most directly comparable GAAP measure, for the periods indicated:

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| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
| (in thousands, except percentages, unaudited) | **2022** | **2021** |
| **Net (loss) income (GAAP)** | $**(148613)** | $**6460** |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of warrant liabilities | (23522) | (2464) |
| **Adjusted net (loss) income** | $**(172135)** | $**3996** |
| Adjusted net (loss) income margin | (4.4)% | 0.2% |
| Adjustments: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 45991 | 15848 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of capitalized interest (1) | 12660 | 6294 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense | 359 | 170 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 1022 | 523 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of stock-based compensation | 8307 | 3079 |
| **Adjusted EBITDA** | $**(103796)** | $**29910** |
| Adjusted EBITDA margin | (2.6)% | 1.4% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Amortization of capitalized interest represents all interest related costs, including senior and mezzanine secured interest related costs, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale.

**Components of Our Results of Operations**

**Revenue**

We generate revenue primarily from the sale of homes on the open market. Home sales revenue is recognized at the time of the transaction closing when title to and possession of the property are transferred to the buyer. The amount of revenue recognized for each home sale is equal to the sale price of the home net of resale concessions and credits to the buyer.

**Cost of Revenue**

Cost of revenue consists of the initial home purchase costs, renovation costs, holding costs and interest incurred prior to the date the home is ready for resale and real estate inventory impairments, if any. These costs are accumulated in real estate inventory during the property holding period and charged to cost of revenue under the specific identification method when the property is sold.

**Operating Expenses**

Sales, Marketing and Operating

Sales, marketing and operating expense consists of real estate agent commissions for home buyers, advertising, and holding costs on homes incurred after the home is ready for resale, which includes utilities, taxes, maintenance and other costs. Sales, marketing and operating expense also includes headcount expenses in support of sales, marketing, and real estate inventory operations such as salaries, benefits, and stock-based compensation. Sales, marketing and operating expenses are charged to operations as incurred.

General and Administrative

General and administrative expense consists primarily of headcount expenses, including salaries, benefits and stock-based compensation for our executive, finance, human resources, legal and administrative personnel. General and administrative expense also includes third-party professional service fees and rent expense.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 49

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Technology and Development

Technology and development expense consists of headcount expenses, including salaries, benefits and stock-based compensation expense for employees and contractors engaged in the design, development, and testing of website applications, mobile applications, and software development. Technology and development expenses are charged to operations as incurred.

**Change in Fair Value of Warrant Liabilities**

Change in fair value of warrant liabilities consists of the gains or losses recorded as a result of the re-measurement of the warrant liabilities to fair value at each reporting period.

**Interest Expense**

Interest expense consists primarily of interest on borrowings, including amortization of debt issuance costs related to our senior secured credit facilities, mezzanine secured credit facilities and other debt. Borrowings under the senior secured credit facilities accrue interest at a rate based on a SOFR reference rate plus a margin, while borrowings under the mezzanine secured credit facilities accrue interest at a fixed rate.

**Other Income, Net**

Other income, net consists primarily of interest income earned on our cash and cash equivalents and gains from the disposal of property and equipment.

**Income Tax Expense**

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax consequences of events that have been included in our consolidated financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period when the new rate is enacted.

We assess the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2022. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. On the basis of this evaluation, we recorded a full valuation allowance against the net deferred tax assets as of December 31, 2022, 2021 and 2020.

The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce our provision for income taxes.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 50

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**Results of Operations**

The following details our consolidated results of operations and includes a discussion of our operating results and significant items explaining the material changes in our operating results during the periods presented:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  |  |  |  |  | **% of Revenue** | **% of Revenue** |
| (in thousands, except percentages) | **2022** | **2021** | **$ Change** | **% Change** | **2022** | **2021** |
| **Revenue** | $3952314 | $2070446 | $1881868 | 90.9% | 100.0% | 100.0% |
| Cost of revenue | 3769892 | 1862631 | 1907261 | 102.4% | 95.4% | 90.0% |
| **Gross profit** | 182422 | 207815 | (25393) | (12.2)% | 4.6% | 10.0% |
| Operating expenses: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales, marketing and operating | 238931 | 146872 | 92059 | 62.7% | 6.0% | 7.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 58718 | 30317 | 28401 | 93.7% | 1.5% | 1.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Technology and development | 12090 | 10860 | 1230 | 11.3% | 0.3% | 0.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 309739 | 188049 | 121690 | 64.7% | 7.8% | 9.1% |
| **(Loss) income from operations** | (127317) | 19766 | (147083) | (744.1)% | (3.2)% | 0.9% |
| Other income (expense): |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of warrant liabilities | 23522 | 2464 | 21058 | 854.6% | 0.6% | 0.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (45991) | (15848) | (30143) | 190.2% | (1.2)% | (0.7)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income, net | 1532 | 248 | 1284 | 517.7% | 0.0% | 0.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expense | (20937) | (13136) | (7801) | 59.4% | (0.6)% | (0.6)% |
| **(Loss) income before income taxes** | (148254) | 6630 | (154884) | \* | (3.8)% | 0.3% |
| Income tax expense | (359) | (170) | (189) | 111.2% | (0.0)% | (0.0)% |
| **Net (loss) income** | $(148613) | $6460 | $(155073) | \* | (3.8)% | 0.3% |

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**Year Ended December 31, 2022 Compared to Year Ended December 31, 2021**

Revenue

Revenue increased by $1,881.9 million, or 90.9%, to $3,952.3 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase was primarily attributable to higher sales volumes, and a higher average sales price. We sold 10,635 homes during the year ended December 31, 2022 compared to 6,373 homes during the year ended December 31, 2021, representing an increase of 67%. Additionally, the average resale home price increased by 14% from $325,000 in the year ended December 31, 2021 to $371,000 in the year ended December 31, 2022. These increases were the result of the increase in number of markets due to our strategic market expansion plans, an increase in existing market penetration, and increases in overall residential housing prices caused by limited housing supply on the market and the impact of generally strong consumer demand across our markets during the first half of 2022.

Cost of Revenue and Gross Profit

Cost of revenue increased by $1,907.3 million, or 102.4%, to $3,769.9 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. This increase was primarily attributable to higher sales volumes, and a higher average home acquisition price.

Gross profit margin was 4.6% for the year ended December 31, 2022 compared to 10.0% for the year ended December 31, 2021. The decrease in gross profit margin was primarily due to a decrease in the difference between the average home resale price and the average home acquisition price during the year ended December 31, 2022 compared to the year ended December 31, 2021. This decrease was primarily due to the considerable softening in consumer demand for residential real estate during the second half of 2022, resulting from the sudden and significant increase in mortgage interest rates since early 2022, combined with elevated home prices resulting from the increased home price appreciation over the past few years. This, in turn, also resulted in an increase in the average period of time our homes are being held in inventory. Additionally, we recorded inventory impairments of $93.8 million during the year ended December 31, 2022 as a result of the softening consumer demand for residential real estate, causing the net realizable value for certain homes in inventory to be lower than their respective cost, as compared to $2.8 million of inventory impairments during the year ended December 31, 2021.

Sales, Marketing and Operating

Sales, marketing and operating expense increased by $92.1 million, or 62.7%, to $238.9 million, and improved 110 basis points to 6.0% as a percentage of revenue for the year ended December 31, 2022 compared to 7.1% for the year ended December 31, 2021. The increase in expense was primarily attributable to the increase in variable costs associated with the significant increase in homes sold, and higher employee compensation costs associated with increased average employee headcount. The improvement as a percentage of revenue was due to the overall increased cost leverage achieved from the significant increase in revenue, while effectively managing our cost structure.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 51

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General and Administrative

General and administrative expense increased by $28.4 million, or 93.7%, to $58.7 million for the year ended December 31, 2022 compared to the year ended December 31, 2021, and remained consistent at 1.5% as a percentage of revenue for both periods. The increase in expense was primarily attributable to additional expenses incurred as a public company as a result of the Business Combination on September 1, 2021, including costs associated with obtaining directors' and officers' liability insurance and increased legal, accounting and financial compliance costs and professional fees. The increase in expense was also due to higher stock-based compensation expense associated with new grants of equity awards during 2022 and higher employee compensation costs associated with increased average employee headcount as a result of the growth in the business through the first half of 2022. By effectively leveraging our cost structure with the increase in revenue, we were able to absorb the incremental cost increases year over year and maintain general and administrative expenses constant as a percentage of revenue.

Technology and Development

Technology and development expense increased by $1.2 million, or 11.3%, to $12.1 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. This represented an improvement as a percentage of revenue of 20 basis points. The increase in expense was primarily attributable to higher employee compensation costs associated with increased average employee headcount as a result of the growth in the business through the first half of 2022. The improvement as a percentage of revenue was principally attributable to effectively leveraging our cost structure as revenue increased significantly.

Change in Fair Value of Warrant Liabilities

Change in fair value of warrant liabilities for the years ended December 31, 2022 and 2021 represents gains of $23.5 million and $2.5 million as a result of the fair value adjustment of the warrant liabilities during the respective periods.

Interest Expense

Interest expense increased by $30.1 million, or 190.2%, to $46.0 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase was primarily attributable to a general increase in the average outstanding balance of our secured credit facilities due to an increase in real estate inventory financed by the facilities during the first nine months of 2022 and an increase in the weighted average variable interest rates associated with these senior credit facilities.

Other Income, Net

Other income, net during the year ended December 31, 2022 principally represents interest income earned on our cash and cash equivalents. Other income, net during the year ended December 31, 2021 principally represents a gain from the disposal of fixed assets.

Income Tax Expense

We recorded income tax expense of $0.4 million and $0.2 million during the years ended December 31, 2022 and 2021, respectively, and our effective tax rate was (0.2)% and 2.6% for the respective periods. Our effective tax rate for each of the years ended December 31, 2022 and December 31, 2021 differed from the federal statutory rate of 21% primarily due to the valuation allowance recorded on our deferred tax assets, state taxes and stock-based compensation. We record a full valuation allowance on our deferred tax assets, such that our income tax expense reflects only state taxes which are revenue or commerce based.

**Liquidity and Capital Resources**

Overview

Cash and cash equivalents balances consist of operating cash on deposit with financial institutions. Our principal sources of liquidity have historically consisted of cash generated from our operations and financing activities. As of December 31, 2022, we had cash and cash equivalents of $97.2 million and had a total undrawn borrowing capacity of $1,345.8 million, $256.7 million of which is committed and $1,089.1 million uncommitted.

We generated net income during the year ended December 31, 2021. However, we have incurred losses during the year ended December 31, 2022 and each year from inception through December 31, 2020, and may incur additional losses in the future. We continued to invest in the development and expansion of our operations. These investments include improvements in infrastructure and a continual improvement to our software, as well as investments in sales and marketing as we expanded into new markets.

We expect our working capital requirements to continue to increase over the long term, as we seek to increase our inventory and expand into more markets across the United States. We believe our cash on hand, together with proceeds from the resale of homes and cash from future borrowings available under each of our existing credit facilities or the entry into new financing

Offerpad Solutions Inc. \| 2022 Form 10-K \| 52

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arrangements (including the Private Placement (as defined below)), will be sufficient to meet our short-term working capital and capital expenditure requirements for at least the next twelve months. However, our ability to fund our working capital and capital expenditure requirements will depend in part on the residential real estate market conditions in the markets in which we operate and in the U.S. in general, and various other general economic, financial, competitive, legislative, regulatory and other conditions that may be beyond our control. Depending on these and other market conditions, we may seek additional financing. Volatility in the credit markets, rising interest rates and softening consumer demand for residential real estate may have an adverse effect on our ability to obtain debt financing on favorable terms or at all. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, or may require us to agree to unfavorable terms, and our existing stockholders may experience significant dilution.

Private Placement

On January 31, 2023, we entered into a pre-funded warrants subscription agreement (the "Subscription Agreement") with the investors named therein (the "Investors") pursuant to which we sold and issued to the Investors an aggregate of 160,742,959 pre-funded warrants (the "Pre-funded Warrants") to purchase shares (the "Pre-funded Warrant Shares") of Class A Common Stock (the "Private Placement"). Each Pre-funded Warrant was sold at a price of $0.5599 per Pre-funded Warrant and has an initial exercise price of $0.0001 per Pre-funded Warrant, subject to certain customary anti-dilution adjustment provisions. The exercise price for the Pre-funded Warrants can be paid in cash or on a cashless basis, and the Pre-funded Warrants have no expiration date. The aggregate gross proceeds to us was approximately $90.0 million, which we intend to use for general corporate purposes, including working capital. The Investors included Brian Bair, our founder, chief executive officer and chairman of our board of directors; Roberto Sella, a member of our board of directors; First American Financial Corporation ("First American"), a holder of more than 10% of our outstanding Class A Common Stock; and Kenneth DeGiorgio, a member of our board of directors and chief executive officer of First American.

The issuance of the Pre-funded Warrant Shares upon exercise of the Pre-funded Warrants has been approved by stockholders holding stock representing more than a majority of the voting power of our common stock, and we filed a related information statement with the SEC on February 14, 2023. The Pre-funded Warrants will not be exercisable until at least 21 days after the definitive information statement is filed with the SEC or such later time as is necessary to comply with the listing requirements of the NYSE. Furthermore, under the terms of the Subscription Agreement, the Investors have agreed not to transact in or transfer any of our securities, without our prior written consent, until two trading days following the filing with the SEC of our quarterly report on Form 10-Q for the three months ending March 31, 2023.

Under the terms of the Subscription Agreement, we have agreed to file a registration statement covering the resale of the Pre-funded Warrant Shares within ninety (90) calendar days after the January 31, 2023 (the "Filing Deadline") and to use reasonable best efforts to cause the registration statement to be declared effective (i) in the event that the SEC does not review the registration statement, thirty (30) days after the Filing Deadline, or (ii) in the event that the SEC reviews the registration statement, seventy-five (75) days after the Filing Deadline (but in any event, no later than four (4) business days following the SEC indicating that it has no further comments on the registration statement). Pursuant to the terms of our amended and restated registration rights agreement, dated September 1, 2021 (the "RRA"), any Pre-funded Warrant Shares acquired by Investors who are party to the RRA will be considered "registrable securities" for purposes of the RRA.

The Subscription Agreement and form of Pre-funded Warrant include customary representations, warranties and covenants by us and the Investors, which were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.

Financing Activities

Our financing activities primarily include borrowing under our senior secured credit facilities, mezzanine secured credit facilities and new issuances of equity (including the Private Placement, as discussed above). Historically, we have required access to external financing resources in order to fund growth, expansion into new markets and strategic initiatives, and we expect this to continue in the future. Our access to capital markets can be impacted by factors outside our control, including economic conditions.

Buying and selling high-valued assets, such as single-family residential homes, is very cash intensive and has a significant impact on our liquidity and capital resources. We use non-recourse secured credit facilities, consisting of both senior secured credit facilities and mezzanine secured credit facilities, to finance a significant portion of our real estate inventory and related home renovations. Our senior and mezzanine secured credit facilities, however, are not fully committed, meaning the applicable lender may not be obligated to advance new loan funds if they choose not to do so. Our ability to obtain and maintain access to these or similar kinds of credit facilities is significant for us to operate the business.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 53

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Senior Secured Credit Facilities

The following summarizes certain details related to our senior secured credit facilities (in thousands, except interest rates):

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Borrowing Capacity** | **Borrowing Capacity** | **Borrowing Capacity** | **Outstanding** | **Weighted-<br>Average<br>Interest** | **End of<br>Revolving / <br>Withdrawal** | **Final<br>Maturity** |
| **As of December 31, 2022** | **Committed** | **Uncommitted** | **Total** | **Amount** | **Rate** | **Period** | **Date** |
| Financial institution 1 | $300000 | $300000 | $600000 | $228823 | 4.74% | June 2024 | June 2024 |
| Financial institution 2 | 200000 | 200000 | 400000 | 123478 | 4.11% | September 2023 | March 2024 |
| Financial institution 3 | 125000 | 375000 | 500000 | 119559 | 4.48% | December 2023 | December 2023 |
| Related party | 50000 | 25000 | 75000 | 17398 | 6.46% | March 2024 | September 2024 |
| &nbsp;&nbsp;**Senior secured credit facilities** | $675000 | $900000 | $1575000 | $489258 |  |  |  |

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As of December 31, 2022, we had four senior secured credit facilities that we use to fund the purchase of homes and build our real estate inventory, three with separate financial institutions and one with a related party, which holds more than 5% of our Class A common stock. Borrowings under the senior secured credit facilities accrue interest at a rate based on a Secured Overnight Financing Rate ("SOFR") reference rate, plus a margin which varies by facility.

Borrowings under our senior secured credit facilities are collateralized by the real estate inventory financed by the senior secured credit facility. The lenders have legal recourse only to the assets securing the debt and do not have general recourse against us with limited exceptions. We have, however, provided limited non-recourse carve-out guarantees under our senior and mezzanine secured credit facilities for certain of the SPEs' obligations in situations involving "bad acts" by an Offerpad entity and certain other limited circumstances that are generally under our control. Each senior secured facility contains eligibility requirements that govern whether a property can be financed. When we resell a home, the proceeds are used to reduce the corresponding outstanding balance under the related senior and mezzanine secured revolving credit facilities.

During February 2023, we amended our credit facility with financial institution 2, which, among other things, reduced the total borrowing capacity on the facility from $400.0 million to $200.0 million, $100.0 million of which is committed.

Mezzanine Secured Credit Facilities

In addition to the senior secured credit facilities, we use mezzanine secured credit facilities which are structurally and contractually subordinated to the related senior secured credit facilities. The following summarizes certain details related to our mezzanine secured credit facilities (in thousands, except interest rates):

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Borrowing Capacity** | **Borrowing Capacity** | **Borrowing Capacity** | **Outstanding** | **Weighted-<br>Average<br>Interest** | **End of<br>Revolving / <br>Withdrawal** | **Final<br>Maturity** |
| **As of December 31, 2022** | **Committed** | **Uncommitted** | **Total** | **Amount** | **Rate** | **Period** | **Date** |
| Related party facility 1 | $65000 | $32500 | $97500 | $38937 | 11.00% | June 2024 | June 2024 |
| Third-party lender 1 | 45000 | 45000 | 90000 | 31239 | 9.55% | September 2023 | March 2024 |
| Third-party lender 2 | 18387 | 94113 | 112500 | 18387 | 9.50% | December 2023 | December 2023 |
| Related party facility 2 | 35000 | 17500 | 52500 | 3841 | 11.05% | March 2024 | September 2024 |
| &nbsp;&nbsp;**Mezzanine secured credit facilities** | $163387 | $189113 | $352500 | $92404 |  |  |  |

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As of December 31, 2022, we had four mezzanine secured credit facilities, two with separate third-party lenders and two with a related party, which holds more than 5% of our Class A common stock. Borrowings under the mezzanine secured credit facilities accrue interest at fixed rates, which vary by facility and range from 9.5% to 13.0%.

Borrowings under our mezzanine secured credit facilities are collateralized by a second lien on the real estate inventory financed by the relevant credit facility. The lenders have legal recourse only to the assets securing the debt, and do not have general recourse against us with limited exceptions. When we resell a home, the proceeds are used to reduce the corresponding outstanding balance under the related senior and mezzanine secured revolving credit facilities.

During February 2023, we amended our credit facility with third-party lender 1, which, among other things, reduced the total borrowing capacity on the facility from $90.0 million to $45.0 million, $22.5 million of which is committed.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 54

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Covenants for Senior Secured Credit Facilities and Mezzanine Secured Credit Facilities

The secured credit facilities include customary representations and warranties, covenants and events of default. Financed properties are subject to customary eligibility criteria and concentration limits. The terms of these facilities and related financing documents require the Company to comply with a number of customary financial and other covenants, such as maintaining certain levels of liquidity, tangible net worth or leverage (ratio of debt to tangible net worth).

As of December 31, 2022, we were in compliance with all covenants and no event of default had occurred.

Senior Secured Debt - Other

As of December 31, 2022, we have borrowing arrangements with two separate third-party lenders to support purchases of real estate inventory. Borrowings under each of these arrangements accrue interest at a rate based on a SOFR reference rate, plus a margin which varies by arrangement. As of December 31, 2022 and 2021, the weighted-average interest rates under our other senior secured debt were 7.23% and 5.79%, respectively.

**Cash Flows**

The following summarizes our cash flows for the years ended December 31, 2022 and 2021:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
| ($ in thousands) | **2022** | **2021** |
| Net cash provided by (used in) operating activities | $305402 | $(921920) |
| Net cash used in investing activities | (1070) | (11655) |
| Net cash (used in) provided by financing activities | (358466) | 1077266 |
| &nbsp;&nbsp;&nbsp;**Net change in cash, cash equivalents and restricted cash** | $(54134) | $143691 |

---

Operating Activities

Net cash provided by (used in) operating activities was $305.4 million and $(921.9) million for the years ended December 31, 2022 and 2021, respectively. In 2022, net cash provided by operating activities primarily resulted from a $374.1 million decrease in real estate inventory due to an intentional reduction in inventory levels given the dramatic decline in consumer demand for residential real estate, which began toward the end of the second quarter of 2022 and continued through the remainder of the year. During this period of time, we focused on selling our existing inventory of homes acquired in the first half of the year and significantly reduced the number of new homes acquired in the second half of the year. Net cash provided by operating activities during the year ended December 31, 2022 was also impacted by the $148.6 million net loss during the year, which included a $93.8 million non-cash inventory impairment loss as a result of the softening consumer demand for residential real estate, and a $23.5 million non-cash gain as a result of the fair value adjustment of the warrant liabilities.

In 2021, net cash used in operating activities was primarily due to a $949.6 million increase in real estate inventory as a result of the execution of our growth plan, as well as favorable housing market conditions across our markets during 2021. This cash outflow related to increased inventory levels was partially offset by a $21.6 million increase in accrued and other liabilities principally attributable to increased accruals for home renovation, payroll and other employee related expenses, and marketing.

Investing Activities

Net cash used in investing activities was $1.1 million and $11.7 million for the years ended December 31, 2022 and 2021, respectively. Net cash used in investing activities during 2022 represents purchases of property and equipment.

Net cash used in investing activities during 2021 represents purchases of property and equipment of $13.7 million, which was partially offset by proceeds from sales of property and equipment of $2.0 million

Financing Activities

Net cash (used in) provided by financing activities was $(358.5) million and $1,077.3 million for the years ended December 31, 2022 and 2021, respectively. Net cash used in financing activities during 2022 primarily consisted of $3,540.5 million of repayments of credit facilities and other debt, which was partially offset by $3,178.0 million of borrowings from credit facilities and other debt. This net decrease in credit facility funding of $362.5 million was directly related to the decrease in financed inventory during 2022.

Net cash provided by financing activities during 2021 primarily consisted of $2,764.1 million of borrowings from credit facilities and other debt, which was partially offset by $1,912.8 million of repayments of credit facilities and other debt. This net increase in credit facility funding of $851.3 million was directly related to financing the increase in inventory during 2021.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 55

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Net cash provided by financing activities in 2021 also included $284.0 million of proceeds from the Business Combination, which was partially offset by issuance costs of $51.2 million.

**Material Cash Requirements and Other Obligations**

Our material cash requirements include the following contractual obligations and other commitments.

Credit Facilities and Other Debt

As of December 31, 2022, we had aggregate outstanding principal amounts on our senior and mezzanine secured credit facilities of $489.3 million and $92.4 million, respectively, and $89.0 million on our other senior secured debt. Estimated interest payments, which have been calculated using the applicable variable or fixed interest rate in existence at December 31, 2022 over an assumed holding period of 101 days, total $9.4 million, $2.9 million and $2.4 million under the respective facilities and other senior secured debt. Borrowings under the senior and mezzanine secured credit facilities and other senior secured debt are required to be repaid as the related real estate inventory is sold, which is expected to be within 12 months from December 31, 2022.

Home Purchase Commitments

As of December 31, 2022, we were under contract to purchase 98 homes for an aggregate purchase price of $24.9 million, all of which are expected to close within 12 months.

Other Purchase Obligations

We have other purchase obligations which principally include commitments relating to insurance, marketing, information technology and administration services. As of December 31, 2022, we had other purchase obligations of $6.5 million, with $5.8 million payable within 12 months.

Operating Leases

We have operating lease arrangements consisting of our corporate headquarters in Chandler, Arizona and field office facilities in most of the metropolitan markets in which we operate in the United States. As of December 31, 2022, we had $6.3 million of total future payments, including imputed interest, associated with our operating lease arrangements, of which, $2.5 million is short-term.

**Critical Accounting Estimates**

We prepare our consolidated financial statements in accordance with GAAP. In doing so, we make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. Although we believe our estimates, judgments and assumptions are reasonable, actual results may differ from our estimates under different assumptions, judgments or conditions given the inherent uncertainty involved with such matters, which would impact our financial statements. We base our estimates on historical experience and various other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.

Our significant accounting policies and methods used in the preparation of our consolidated financial statements are described in Note 1. Nature of Operations and Significant Accounting Policies to the consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K. Of our significant accounting policies, we believe the assumptions and judgments involved in the accounting estimates described below are the most critical as they involve a high level of uncertainty at the time the estimate is made, and changes in the estimates have had or are reasonably likely to have a material impact on our consolidated financial statements.

Inventory

We review inventory for impairment on a quarterly basis, or more frequently if events or changes in circumstances indicate that the carrying value of inventory may not be recoverable. We evaluate inventory for indicators that net realizable value is lower than cost at the individual home level. When evidence exists that the net realizable value of inventory is lower than its cost, the difference is recognized as impairment in cost of revenue and the related inventory is adjusted to its net realizable value.

Our inventory impairment calculations contain uncertainties because they require management to make assumptions and apply judgment in determining the net realizable value for each home. Key assumptions used in estimating the net realizable value for each home include the projected home sales price and expected selling costs. Estimates of home sales prices and selling costs are based on internal projections and consider multiple factors, including recent comparable home sale transactions in the specific area where the home is located, forecasts about the residential real estate market conditions in both the local market in which the home is located and in the U.S. in general, and the impact of national, regional or local economic conditions. These

Offerpad Solutions Inc. \| 2022 Form 10-K \| 56

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estimates are subjective and are affected by factors such as changes in economic conditions and changes in operating performance.

For individual homes or portfolios of homes under contract to sell as of the impairment assessment date, if the carrying value exceeds the contract price less expected selling costs, the carrying value of these homes are adjusted to the contract price less expected selling costs. For all other homes, if the carrying value exceeds the expected sale price less expected selling costs, the carrying value of these homes are adjusted to the expected sale price less expected selling costs.

We recorded inventory impairments of $93.8 million, $2.8 million and $3.2 million during the years ended December 31, 2022, 2021 and 2020, respectively.

**Recent Accounting Pronouncements**

For a discussion of recent accounting pronouncements, refer to Note 1. Nature of Operations and Significant Accounting Policies in Item 8, Financial Statements and Supplementary Data.

**Item 7A. Quantitative and Qualitative Disclosures About Market Risk.** 

We are exposed to economic and other market risks, which principally includes changes in interest rates.

**Interest Rate Risk**

We are subject to market risk associated with changing interest rates within our variable rate senior secured credit facilities and other senior secured debt.

As of December 31, 2022, our exposure to changes in interest rates within these debt arrangements is principally associated with the Secured Overnight Financing Rate ("SOFR"). We had outstanding borrowings on our senior secured credit facilities and other senior secured debt of $578.3 million as of December 31, 2022, of which, $489.3 million was outstanding on our senior secured credit facilities. Borrowings under our senior secured credit facilities accrue interest at a floating rate based on a SOFR reference rate plus a margin. Assuming no change in the outstanding borrowings on our senior secured credit facilities, we estimate that a one percentage point increase in SOFR would have increased our annual interest expense by $4.9 million during the year ended December 31, 2022.

As of December 31, 2021, our exposure to changes in interest rates within our variable rate senior secured credit facilities and other senior secured debt was principally associated with the London Interbank Offered Rate ("LIBOR"). Assuming no change in the outstanding borrowings on our senior secured credit facilities as of December 31, 2021, we estimate that a one percentage point increase in LIBOR would have increased our annual interest expense by $8.3 million during the year ended December 31, 2021.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 57

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**Item 8. Financial Statements and Supplementary Data.** 

---

| | |
|:---|:---|
| [<u>Report of Independent Registered Public Accounting Firm (PCAOB ID No.</u> 34<u>)</u>](#auditor_report) | 59 |
| [<u>Consolidated Balance Sheets</u>](#balance_sheets) | 61 |
| [<u>Consolidated Statements of Operations</u>](#statements_of_operations) | 62 |
| [<u>Consolidated Statements of Changes in Temporary Equity and Stockholders' Equity (Deficit)</u>](#statements_of_changes_in_equity) | 63 |
| [<u>Consolidated Statements of Cash Flows</u>](#statement_of_cash_flows) | 64 |
| [<u>Notes to Consolidated Financial Statements</u>](#note_to_consolidated_financial_statement) | 65 |

---

Offerpad Solutions Inc. \| 2022 Form 10-K \| 58

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**Report of Independent Registered Public Accounting Firm**

To the stockholders and the Board of Directors of Offerpad Solutions Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of Offerpad Solutions Inc. and subsidiaries (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations, changes in temporary equity and stockholders' equity (deficit), and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matter**

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

**Inventory – Valuation — Refer to Notes 1 and 3 to the financial statements**

Critical Audit Matter Description

As described in Note 1 of the financial statements, the Company carries inventory of acquired homes at the lower of cost or net realizable value. Inventory is reviewed at least quarterly for impairment indicators that net realizable value may be lower than cost. If the net realizable value is lower than cost, an inventory impairment is recorded to cost of revenue and the related inventory is adjusted to its net realizable value. For homes that are not under contract, if the carrying value exceeds the expected sales price less expected selling costs, the carrying value of these homes are adjusted to the expected sales price less expected selling costs. The inventory balance of homes that are not under contract was $495.4 million as of December 31, 2022.

We identified the expected sales price estimate used in the inventory impairment analysis for homes that are not under contract to be a critical audit matter due to the subjectivity of management's market comparables used in estimating the expected sales price. The evaluation of inventory recoverability for homes not under contract required a high degree of auditor judgment and an increased extent of effort to evaluate the reasonableness of the expected sales price estimate used in management's impairment analysis.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 59

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How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to evaluating the expected sales price estimate included the following, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We tested the design and effectiveness of the Company's internal controls related to management's inventory impairment analysis, including those over the determination of the expected sales price estimate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We evaluated management's ability to accurately estimate the expected sales price by comparing contract prices for homes that went under contract to the expected sales price estimate for these same homes used in management's impairment analysis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•With the assistance of our internal fair value specialists, we evaluated the market comparables used by management to determine the expected sales price estimate and compared selections for testing to external market sources.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We tested the mathematical accuracy of management's analysis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We evaluated management's ability to develop reasonable estimates of the expected sales price by comparing prior period estimates of expected sales price to actual selling prices for homes sold in the current period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We evaluated external macroeconomic market sources regarding trends and changing market conditions.

/s/ DELOITTE & TOUCHE LLP

Tempe, Arizona

February 28, 2023

We have served as the Company's auditor since 2019.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 60

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**OFFERPAD SOLUTIONS INC.**

**Consolidated Balance Sheets**

---

| | | | |
|:---|:---|:---|:---|
|  |  | **As of December 31,** | **As of December 31,** |
| (in thousands, except par value per share) |  | **2022** | **2021** |
| **ASSETS** |  |  |  |
| Current assets: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents |  | $97241 | $169817 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash |  | 43058 | 24616 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable |  | 2350 | 6165 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory |  | 664697 | 1132571 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets |  | 6833 | 9808 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets |  | 814179 | 1342977 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property and equipment, net |  | 5194 | 5146 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other non-current assets |  | 5696 | 4959 |
| **TOTAL ASSETS** | (1) | $825069 | $1353082 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |  |
| Current liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable |  | $4647 | $6399 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued and other current liabilities |  | 28252 | 35027 |
| &nbsp;&nbsp;&nbsp;&nbsp;Secured credit facilities and other debt, net |  | 605889 | 861762 |
| &nbsp;&nbsp;&nbsp;&nbsp;Secured credit facilities and other debt - related party |  | 60176 | 164434 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities |  | 698964 | 1067622 |
| &nbsp;&nbsp;&nbsp;&nbsp;Warrant liabilities |  | 539 | 24061 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other long-term liabilities |  | 3689 | 3830 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | (2) | 703192 | 1095513 |
| Commitments and contingencies (Note 16) |  |  |  |
| Stockholders' equity: |  |  |  |
| &nbsp;&nbsp;&nbsp;Class A common stock, $0.0001 par value; 2,000,000 shares authorized; 232,379 and 224,154 shares issued and outstanding as of December 31, 2022 and 2021, respectively |  | 23 | 22 |
| &nbsp;&nbsp;&nbsp;Class B common stock, $0.0001 par value; 20,000 shares authorized; 14,816 shares issued and outstanding as of December 31, 2022 and 2021, respectively |  | 2 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid in capital |  | 402521 | 389601 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit |  | (280669) | (132056) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total stockholders' equity** |  | 121877 | 257569 |
| **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** |  | $825069 | $1353082 |

---

(1)Our consolidated assets as of December 31, 2022 and 2021 include the following assets of certain variable interest entities ("VIEs") that can only be used to settle the liabilities of those VIEs: Restricted cash, $42,958 and $24,616; Accounts receivable, $1,841 and $4,845; Inventory, $664,697 and $1,132,571; Prepaid expenses and other current assets, $212 and $2,871; Total assets of $709,708 and $1,164,903, respectively.

(2)Our consolidated liabilities as of December 31, 2022 and 2021 include the following liabilities for which the VIE creditors do not have recourse to Offerpad: Accounts payable, $1,976 and $2,810; Accrued and other current liabilities, $4,408 and $3,537; Secured credit facilities and other debt, net, $666,065 and $1,026,196; Total liabilities, $672,449 and $1,032,543, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 61

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**OFFERPAD SOLUTIONS INC.**

**Consolidated Statements of Operations**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| (in thousands, except per share data) | **2022** | **2021** | **2020** |
| **Revenue** | $3952314 | $2070446 | $1064257 |
| Cost of revenue | 3769892 | 1862631 | 976478 |
| **Gross profit** | 182422 | 207815 | 87779 |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;Sales, marketing and operating | 238931 | 146872 | 76786 |
| &nbsp;&nbsp;&nbsp;General and administrative | 58718 | 30317 | 17481 |
| &nbsp;&nbsp;&nbsp;Technology and development | 12090 | 10860 | 7270 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 309739 | 188049 | 101537 |
| **(Loss) income from operations** | (127317) | 19766 | (13758) |
| Other income (expense): |  |  |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant liabilities | 23522 | 2464 |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (45991) | (15848) | (10031) |
| &nbsp;&nbsp;&nbsp;Other income, net | 1532 | 248 | 834 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expense | (20937) | (13136) | (9197) |
| **(Loss) income before income taxes** | (148254) | 6630 | (22955) |
| Income tax expense | (359) | (170) | (163) |
| **Net (loss) income** | $(148613) | $6460 | $(23118) |
| Net (loss) income per share, basic | $(0.61) | $0.05 | $(0.40) |
| Net (loss) income per share, diluted | $(0.61) | $0.05 | $(0.40) |
| Weighted average common shares outstanding, basic | 245148 | 118571 | 57865 |
| Weighted average common shares outstanding, diluted | 245148 | 143220 | 57865 |

---

The accompanying notes are an integral part of these consolidated financial statements.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 62

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**OFFERPAD SOLUTIONS INC.**

**Consolidated Statements of Changes in Temporary Equity and Stockholders' Equity (Deficit)**

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| | | | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Temporary Equity** | **Temporary Equity** | **Temporary Equity** | **Temporary Equity** | **Temporary Equity** | **Temporary Equity** | **Temporary Equity** | **Temporary Equity** | **Temporary Equity** | **Temporary Equity** | **Temporary Equity** | **Stockholders' (Deficit) Equity** | **Stockholders' (Deficit) Equity** | **Stockholders' (Deficit) Equity** | **Stockholders' (Deficit) Equity** | **Stockholders' (Deficit) Equity** | **Stockholders' (Deficit) Equity** | **Stockholders' (Deficit) Equity** |
|  | **Series A<br>Convertible<br>Preferred Stock** | **Series A<br>Convertible<br>Preferred Stock** | **Series A-1<br>Convertible<br>Preferred Stock** | **Series A-1<br>Convertible<br>Preferred Stock** | **Series A-2<br>Convertible<br>Preferred Stock** | **Series A-2<br>Convertible<br>Preferred Stock** | **Series B<br>Convertible<br>Preferred Stock** | **Series B<br>Convertible<br>Preferred Stock** | **Series C<br>Convertible<br>Preferred Stock** | **Series C<br>Convertible<br>Preferred Stock** | **Total<br>Temporary** | **Common Stock** | **Common Stock** | **Additional<br>Paid in** | **Accumulated** | **Treasury Stock** | **Treasury Stock** | **Total<br>Stockholders'<br>(Deficit)** |
| (in thousands) | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Equity** | **Shares** | **Amount** | **Capital** | **Deficit** | **Shares** | **Amount** | **Equity** |
| **Balance at December 31, 2019** | 20907 | $14921 | 10905 | $7470 | 8322 | $7463 | 58390 | $49845 | 28358 | $74601 | $154300 | 57865 | $— | $4545 | $(115398) | 4794 | $(10650) | $(121503) |
| Issuance of Series C (extension) stock, net of offering costs |  |  |  |  |  |  |  |  | 11627 | 29823 | 29823 |  |  |  |  |  |  |  |
| Stock-based compensation expense |  |  |  |  |  |  |  |  |  |  |  |  |  | 1363 |  |  |  | 1363 |
| Net loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (23118) |  |  | (23118) |
| **Balance at December 31, 2020** | 20907 | $14921 | 10905 | $7470 | 8322 | $7463 | 58390 | $49845 | 39985 | $104424 | $184123 | 57865 | $— | $5908 | $(138516) | 4794 | $(10650) | $(143258) |
| Issuance of common stock upon exercise of stock options |  |  |  |  |  |  |  |  |  |  |  | 2279 |  | 647 |  |  |  | 647 |
| Issuance of common stock upon early exercise of stock options |  |  |  |  |  |  |  |  |  |  |  | 211 |  |  |  |  |  |  |
| Repurchased shares |  |  |  |  |  |  |  |  |  |  |  | (70) |  |  |  |  |  |  |
| Vesting of early exercised stock options |  |  |  |  |  |  |  |  |  |  |  |  |  | 171 |  |  |  | 171 |
| Conversion of preferred stock to common stock | (20907) | (14921) | (10905) | (7470) | (8322) | (7463) | (58390) | (49845) | (39985) | (104424) | (184123) | 138612 | 14 | 184109 |  |  |  | 184123 |
| Issuance of Class A common stock and Class B common stock in connection with Business Combination |  |  |  |  |  |  |  |  |  |  |  | 40073 | 10 | 195687 |  | (4794) | 10650 | 206347 |
| Stock-based compensation expense |  |  |  |  |  |  |  |  |  |  |  |  |  | 3079 |  |  |  | 3079 |
| Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 6460 |  |  | 6460 |
| **Balance at December 31, 2021** |  | $— |  | $— |  | $— |  | $— |  | $— | $— | 238970 | $24 | $389601 | $(132056) |  | $— | $257569 |
| Issuance of common stock upon exercise of stock options |  |  |  |  |  |  |  |  |  |  |  | 8101 | 1 | 4670 |  |  |  | 4671 |
| Issuance of common stock upon vesting of restricted stock units |  |  |  |  |  |  |  |  |  |  |  | 124 |  | (57) |  |  |  | (57) |
| Stock-based compensation expense |  |  |  |  |  |  |  |  |  |  |  |  |  | 8307 |  |  |  | 8307 |
| Net loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (148613) |  |  | (148613) |
| **Balance at December 31, 2022** |  | $— |  | $— |  | $— |  | $— |  | $— | $— | 247195 | $25 | $402521 | $(280669) |  | $— | $121877 |

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The accompanying notes are an integral part of these consolidated financial statements.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 63

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**OFFERPAD SOLUTIONS INC.**

**Consolidated Statements of Cash Flows**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| ($ in thousands) | **2022** | **2021** | **2020** |
| **Cash flows from operating activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Net (loss) income | $(148613) | $6460 | $(23118) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 1022 | 523 | 434 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of property and equipment |  | (246) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt financing costs | 2948 | 916 | 262 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment of inventory | 93810 | 2843 | 3170 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 8307 | 3079 | 1363 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of warrant liabilities | (23522) | (2464) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 3815 | (3845) | 937 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | 374064 | (949591) | 169079 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | (275) | (5288) | 115 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (1752) | 4130 | 841 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued and other liabilities | (4402) | 21563 | 1781 |
| **Net cash provided by (used in) operating activities** | 305402 | (921920) | 154864 |
| **Cash flows from investing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Purchases of property and equipment | (1070) | (13687) | (2858) |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of property and equipment |  | 2032 |  |
| **Net cash used in investing activities** | (1070) | (11655) | (2858) |
| **Cash flows from financing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Borrowings from credit facilities and other debt | 3178033 | 2764071 | 799997 |
| &nbsp;&nbsp;&nbsp;Repayments of credit facilities and other debt | (3540466) | (1912837) | (960510) |
| &nbsp;&nbsp;&nbsp;Payment of debt financing costs | (646) | (7632) | (457) |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of stock options | 4898 | 902 |  |
| &nbsp;&nbsp;&nbsp;Payments for taxes related to stock-based awards | (285) |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from Business Combination |  | 284011 |  |
| &nbsp;&nbsp;&nbsp;Issuance cost of common stock |  | (51249) |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of Class C preferred stock, net |  |  | 29823 |
| **Net cash (used in) provided by financing activities** | (358466) | 1077266 | (131147) |
| **Net change in cash, cash equivalents and restricted cash** | (54134) | 143691 | 20859 |
| **Cash, cash equivalents and restricted cash, beginning of period** | 194433 | 50742 | 29883 |
| **Cash, cash equivalents and restricted cash, end of period** | $140299 | $194433 | $50742 |
| **Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheet:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $97241 | $169817 | $43938 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 43058 | 24616 | 6804 |
| **Total cash, cash equivalents and restricted cash** | $140299 | $194433 | $50742 |
| **Supplemental disclosure of cash flow information:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash payments for interest | $59732 | $21875 | $14048 |
| **Supplemental disclosure of non-cash investing and financing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Transfer of property and equipment, net to inventory | $— | $14464 | $— |
| &nbsp;&nbsp;&nbsp;Acquisition of warrant liabilities | $— | $26525 | $— |
| &nbsp;&nbsp;&nbsp;Conversion of preferred stock to common stock | $— | $184123 | $— |
| &nbsp;&nbsp;&nbsp;Conversion of treasury stock | $— | $10650 | $— |

---

The accompanying notes are an integral part of these consolidated financial statements.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 64

------

**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

**Note 1. Nature of Operations and Significant Accounting Policies**

**Description of Business**

Offerpad was founded in 2015 and together with its subsidiaries, is a customer-centric, home buying and selling platform that provides customers with the ultimate home transaction experience, offering convenience, control, certainty, and value. The Company is headquartered in Chandler, Arizona and operated in over 1,800 cities and towns in 28 metropolitan markets across 16 states as of December 31, 2022.

**Basis of Presentation**

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB").

Offerpad Solutions Inc. was formed on September 1, 2021 through a business combination (the "Business Combination") with Supernova Partners Acquisition Company, Inc. ("Supernova"). In connection with the closing of the Business Combination, Supernova changed its name to Offerpad Solutions Inc. The Business Combination was accounted for as a reverse recapitalization.

**Use of Estimates**

The preparation of the Company's consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Significant estimates include those related to the net realizable value of inventory, among others. Actual results could differ from those estimates.

**Principles of Consolidation**

The Company's consolidated financial statements include the assets, liabilities, revenues and expenses of the Company, its wholly owned operating subsidiaries and variable interest entities where the Company is the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation.

**Segment Reporting**

Operating segments are components of an entity for which discrete financial information is available and is regularly reviewed by the Chief Operating Decision Maker ("CODM") in deciding how to allocate resources and in assessing operating performance. The Company's CODM is its Chief Executive Officer.

The Company is not organized around specific services or geographic regions, but rather, operates in one service line, providing a home buying and selling platform. The Company's CODM reviews the financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it is organized and operated as one operating and reportable segment on a consolidated basis for each of the periods presented.

**Cash and Cash Equivalents**

Cash includes demand deposits with banks and financial institutions. Cash equivalents include only investments with original maturities to us of three months or less that are highly liquid and readily convertible to known amounts of cash.

**Restricted Cash** 

Restricted cash primarily consists of cash received from the resale of homes that is specifically designated to repay borrowings under one of the Company's secured credit facilities and is typically released within a few days of the home sale.

**Concentrations of Credit Risk** 

Financial instruments that are potentially subject to concentrations of credit risk are primarily cash and cash equivalents. Cash and cash equivalents are placed with major financial institutions deemed to be of high-credit-quality in order to limit credit exposure. Cash is regularly maintained in excess of federally insured limits at the financial institutions. Management believes that the Company is not exposed to any significant credit risk related to cash deposits.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 65

------

**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

**Accounts Receivable**

Accounts receivable are generated through the sale of a home and generally results in a one- or two-day delay in receiving cash from the title company. Accounts receivable are stated at the amount management expects to collect from outstanding balances. Most of the Company's transactions are processed through escrow and therefore, collectability is reasonably assured. The Company reviews accounts receivable on a regular basis and estimates an amount of losses for uncollectible accounts based on its historical collections, age of the receivable, and any other known conditions that may affect collectability.

**Inventory**

Inventory consists of acquired homes and is stated at the lower of cost or net realizable value, with cost and net realizable value determined by the specific identification of each home. Costs include initial purchase costs and renovation costs, as well as holding costs and interest incurred during the renovation period, prior to the listing date. Selling costs, including commissions and holding costs incurred after the listing date, are expensed as incurred and included in sales, marketing and operating expenses.

The Company reviews inventory for impairment on a quarterly basis, or more frequently if events or changes in circumstances indicate that the carrying value of inventory may not be recoverable. The Company evaluates inventory for indicators that net realizable value is lower than cost at the individual home level. The Company generally considers multiple factors in determining net realizable value for each home, including recent comparable home sale transactions in the specific area where the home is located, the residential real estate market conditions in both the local market in which the home is located and in the U.S. in general, the impact of national, regional or local economic conditions and expected selling costs. When evidence exists that the net realizable value of inventory is lower than its cost, the difference is recognized as impairment in cost of revenue and the related inventory is adjusted to its net realizable value.

For individual homes or portfolios of homes under contract to sell as of the impairment assessment date, if the carrying value exceeds the contract price less expected selling costs, the carrying value of these homes are adjusted to the contract price less expected selling costs. For all other homes, if the carrying value exceeds the expected sale price less expected selling costs, the carrying value of these homes are adjusted to the expected sale price less expected selling costs. Changes in the Company's pricing assumptions may lead to a change in the outcome of the impairment analysis, and actual results may differ from the Company's assumptions.

The Company recorded inventory impairments of $93.8 million, $2.8 million and $3.2 million during the years ended December 31, 2022, 2021 and 2020, respectively. Refer to Note 3. Inventory, for further details.

**Property and Equipment** 

Property and equipment is recorded at cost less accumulated depreciation, and primarily consists of rooftop solar panel systems installed on residential real estate. The Company depreciates its property and equipment using the straight-line method over the estimated useful lives of the related assets, which are as follows:

---

| | |
|:---|:---|
| **Property and Equipment Category** | **Estimated Useful Life** |
| Rooftop solar panel systems | Twenty years |
| Leasehold improvements | Lesser of estimated useful life or remaining lease term |
| Computers and equipment | Five years |
| Office equipment and furniture | Seven years |
| Software systems | Three to five years |

---

Refer to Note 4. Property and Equipment, for further details.

**Leases**

The Company determines if an arrangement is or contains a lease at inception of the arrangement. For leases with terms greater than 12 months, the Company records the related operating or finance right-of-use asset and lease liability at the present value of the future lease payments over the lease term at the lease commencement date. The Company is generally not able to readily determine the implicit rate in its lease arrangements, and therefore, uses its incremental borrowing rate at lease commencement to determine the present value of lease payments. The incremental borrowing rate represents the Company's estimate of the interest rate the Company would incur at lease commencement to borrow an amount similar to the lease payments on a collateralized basis over the term of a lease. Renewal and early termination options are not included in the measurement of the right-of-use asset and lease liability unless the Company is reasonably certain to exercise the option. Additionally, certain leases contain lease incentives, such as construction allowances from landlords. These incentives reduce the right-of-use asset related to the lease.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 66

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**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

Certain of the Company's leases contain rent escalations over the lease term. The Company recognizes expense for operating leases on a straight-line basis over the lease term. Certain of the Company's lease agreements also contain variable lease payments for common area maintenance, utility, and taxes. The Company has elected the practical expedient to combine lease and non-lease components for all asset categories. Therefore, the lease payments used to measure the lease liability for these leases include fixed minimum rentals along with non-lease component charges. The Company does not have significant residual value guarantees or restrictive covenants in its lease portfolio.

Operating lease assets and liabilities are included on the Company's Consolidated Balance Sheet in Other non-current assets, Accrued and other current liabilities, and Other long-term liabilities.

Refer to Note 5. Leases, for further details.

**Long-Lived Asset Impairments**

Long-lived assets, including property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment loss is recognized to the extent the carrying amount of the underlying asset exceeds its fair value.

The Company recognized no impairment charges on its long-lived assets during the years ended December 31, 2022, 2021 and 2020.

**Warrant Liabilities**

The Company evaluates its financial instruments, including its outstanding warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company has outstanding public and private warrants, both of which do not meet the criteria for equity classification and are accounted for as liabilities. Accordingly, the Company recognizes the warrants as liabilities at fair value and adjusts the warrants to fair value at each reporting period. The warrant liabilities are subject to re-measurement at each balance sheet date until exercised or expired, and any change in fair value is recognized in the Company's consolidated statements of operations.

The fair value of the public warrants is estimated based on the quoted market price of such warrants on the valuation date. The fair value of the private warrants is estimated using the Black-Scholes-Merton option-pricing model. Refer to Note 8. Warrant Liabilities, for further details.

**Revenue Recognition**

Revenue is recognized when (or as) performance obligations are satisfied by transferring control of the promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those products or services. The Company applies the following steps in determining the timing and amount of revenue to recognize: (1) identify the contract with our customer; (2) identify the performance obligation(s) in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract, if applicable; and (5) recognize revenue when (or as) the performance obligation is satisfied.

Revenue from the sale of homes is derived from the resale of homes on the open market. Home sales revenue is recognized at the time of the closing when title to and possession of the property are transferred to the buyer. The amount of revenue recognized for each home sale is equal to the sale price of the home net of resale concessions and credits to the buyer.

**Cost of Revenue**

Cost of revenue includes the initial purchase costs, renovation costs, holding costs and interest incurred during the renovation period, prior to listing date and real estate inventory valuation adjustments, if any. These costs are accumulated in real estate inventory up until the home is ready for resale, and then charged to cost of revenue under the specific identification method when the property is sold.

**Sales, Marketing and Operating**

Sales, marketing and operating expenses consist of real estate agent commissions, advertising, and holding costs on homes incurred during the period that homes are listed for sale, which includes utilities, taxes, maintenance, and other costs. Sales, marketing and operating expense includes any headcount expenses in support of sales, marketing, and real estate inventory operations such as salaries, benefits, and stock-based compensation. Sales, marketing and operating expenses are charged to

Offerpad Solutions Inc. \| 2022 Form 10-K \| 67

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**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

operations as incurred. The Company incurred advertising expenses of $46.5 million, $45.3 million and $11.5 million during the years ended December 31, 2022, 2021 and 2020, respectively.

**Technology and Development**

Technology and development expenses consist of headcount expenses, including salaries, benefits and stock-based compensation expense for employees and contractors engaged in the design, development, and testing of website applications and software development. Technology and development expenses are charged to operations as incurred.

**Stock-Based Compensation**

Stock-based compensation awards consist of stock options, restricted stock units and performance-based restricted stock units. The Company measures and recognizes compensation expense for all stock-based compensation awards based on their estimated fair values on the grant date. The Company records compensation expense for all stock-based compensation awards on a straight-line basis over the requisite service period of the awards, which is generally the vesting period of the award. These amounts are reduced by forfeitures in the period the forfeitures occur.

Stock Options

The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock option awards as of the grant date. The Black-Scholes-Merton option pricing model requires the Company to estimate the following key assumptions based on both historical information and management judgment regarding market factors and trends:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Expected term – The Company uses the simplified method when calculating the expected term due to insufficient historical exercise data. The expected term is estimated using the mid-point between the vesting period and the contractual term of the options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Risk-free interest rate – The Company estimates the risk-free interest rate using the rate of return on U.S. treasury notes interpolated between the years equal to the expected term assumption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Expected stock price volatility – As the Company's shares were not publicly traded prior to the Business Combination, and have a limited trading history subsequent to the Business Combination, the Company estimates expected volatility for stock option awards based on the average historical volatility of similar publicly traded companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Expected dividend yield – The expected dividend yield assumption considers that the Company has not historically paid dividends and does not expect to pay dividends in the foreseeable future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Stock price – The Company has issued stock options with exercise prices equal to the fair value of the underlying stock price. Prior to the completion of the Business Combination and listing of the Company's common stock on the public stock exchange, the fair value of Old Offerpad common stock that underlies the stock options was determined based on then-current valuation estimates at the time of grant. Because such grants occurred prior to the public trading of the Company's common stock, the fair value of Old Offerpad common stock was typically determined with assistance of periodic valuation analyses from an independent third-party valuation firm. Subsequent to the Business Combination, the fair value of the Company's common stock is based on the closing price of the Company's Class A common stock on the grant date.

Restricted Stock Units

The Company determines the fair value of restricted stock units based on the closing price of the Company's Class A common stock on the grant date.

Performance-Based Restricted Stock Units

The Company determines the fair value of performance-based restricted stock units using a Monte Carlo simulation model that determines the probability of satisfying the market condition stipulated in the award. The Monte Carlo simulation model incorporates various key assumptions, including expected stock price volatility, contractual term, risk-free interest rate, dividend yield and stock price on the grant date. The Company estimates expected stock price volatility based on the average historical volatility of similar publicly traded companies. The Company estimates the risk-free interest rate using the rate of return on U.S. treasury notes equal to the contractual term of the award. The expected dividend yield assumption considers that the Company has not historically paid dividends and does not expect to pay dividends in the foreseeable future.

The Company determines the requisite service period for performance-based restricted stock units by comparing the derived service period to achieve the market-based condition and the explicit service-based period, using the longer of the two service periods as the requisite service period.

Refer to Note 11. Stock-Based Awards, for further details.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 68

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**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

**Employee Benefit Plan**

The Company offers a 401(k) plan which provides employees the opportunity to contribute a portion of their pre-tax or post-tax earnings, subject to certain restrictions as set forth in the Internal Revenue Code. Beginning January 1, 2022, the Company matches 100% of participant contributions, up to 2.5% of eligible compensation. The Company contributed $1.6 million to the 401(k) plan during the year ended December 31, 2022.

**Income Taxes**

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period when the new rate is enacted.

The Company records a valuation allowance to reduce deferred tax assets to the amount that it believes is more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax laws, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company evaluates and accounts for uncertain tax positions using a two-step approach. Recognition (step one) occurs when the Company concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. Measurement (step two) determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Derecognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more likely than not threshold of being sustained.

Refer to Note 14. Income Taxes, for further details.

**Consolidation of Variable Interest Entities**

The Company is a variable interest holder in certain entities in which equity investors at risk do not have the characteristics of a controlling financial interest or where the entity does not have enough equity at risk to finance its activities without additional subordinated financial support from other parties; these entities are VIEs. The Company's variable interest arises from contractual, ownership or other monetary interest in the entity, which fluctuates based on the VIE's economic performance. The Company consolidates a VIE if it is the primary beneficiary. The Company is the primary beneficiary if it has a controlling financial interest, which includes both the power to direct the activities that most significantly impact the economic performance of the VIE and a variable interest that obligates the Company to absorb losses or the right to receive benefits that potentially could be significant to the VIE. The Company assesses whether it is the primary beneficiary of a VIE on an ongoing basis. Refer to Note 12. Variable Interest Entities, for further details.

**Fair Value Measurements**

The Company accounts for assets and liabilities in accordance with accounting standards that define fair value and establish a consistent framework for measuring fair value on either a recurring or a nonrecurring basis. Fair value is an exit price representing the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

Accounting standards include disclosure requirements relating to the fair values used for certain financial instruments and establish a fair value hierarchy. The hierarchy prioritizes valuation inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of three levels:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Assets or liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.

Level 3—Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk premiums that a market participant would require.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 69

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**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

Refer to Note 9. Fair Value Measurements, for further details.

**New Accounting Standards Recently Adopted**

Reference Rate Reform

In March 2020, the FASB issued a new standard which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Inter Bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. This guidance is optional for a limited period of time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. In December 2022, the FASB issued an additional standard which defers the expiration date of the reference rate reform guidance to December 31, 2024. The Company adopted the guidance related to reference rate reform during 2022 and the adoption of this guidance did not have a material impact on the Company's consolidated financial statements.

**Note 2. Business Combination**

On September 1, 2021 (the "Closing Date"), we consummated the transactions contemplated by the Agreement and Plan of Merger, dated March 17, 2021 (the "Merger Agreement"), by and among OfferPad, Inc. ("Old Offerpad"), Supernova Partners Acquisition Company, Inc., a Delaware corporation ("Supernova"), and Orchids Merger Sub, Inc., a Delaware corporation ("Merger Sub"). Pursuant to these transactions, Merger Sub merged with and into Old Offerpad, with Old Offerpad becoming a wholly owned subsidiary of Supernova (the "Business Combination" and, collectively with the other transactions described in the Merger Agreement, the "Transactions"). On the Closing Date, and in connection with the closing of the Transactions (the "Closing"), Supernova changed its name to Offerpad Solutions Inc. ("Offerpad Solutions").

At the Closing, each share of common stock and preferred stock of Old Offerpad that was issued and outstanding immediately prior to the effective time of the Merger (other than excluded shares as contemplated by the Merger Agreement) was cancelled and converted into the right to receive approximately 7.533 shares (the "Exchange Ratio") of Offerpad Solutions Inc. common stock. The shares of Offerpad Solutions Inc. common stock received as consideration by Brian Bair, the Chief Executive Officer and Founder of the Company, are Class B shares.

At the Closing, each option to purchase Old Offerpad's common stock, whether vested or unvested, was assumed and converted into an option to purchase a number of shares of Offerpad Solutions Class A common stock in the manner set forth in the Merger Agreement.

Additionally, in connection with the execution of the Merger Agreement, Supernova entered into subscription agreements, pursuant to which certain Supernova investors agreed to purchase at the closing of the Transactions an aggregate of 20,000,000 shares of Offerpad Solutions Class A common stock, for a price of $10.00 per share for an aggregate purchase price of $200.0 million (the "PIPE Investment"). The PIPE Investment was consummated simultaneously with the Closing.

Further, in connection with the closing of Supernova's initial public offering, Supernova entered into forward purchase agreements pursuant to which certain affiliates of Supernova agreed to purchase, upon the closing of the Transactions, an aggregate of 5,000,000 shares of Offerpad Solutions Class A common stock and an aggregate of 1,666,667 warrants to purchase one share of Offerpad Solutions Class A common stock, for an aggregate purchase price of $50,000,000, or $10.00 per share of Offerpad Solutions Class A common stock and one-third of one warrant to purchase one share of Offerpad Solutions Class A common stock ("Forward Purchase Agreements"). Offerpad Solutions received the funds under the Forward Purchase Agreements upon the Closing.

We accounted for the Business Combination as a reverse recapitalization whereby Old Offerpad was determined as the accounting acquirer and Supernova as the accounting acquiree. Accordingly, the Business Combination was treated as the equivalent of Old Offerpad issuing stock for the net assets of Supernova, accompanied by a recapitalization. The net assets of Supernova are stated at historical cost, with no goodwill or other intangible assets recorded.

Upon the closing of the Transactions, Offerpad Solutions received total gross proceeds of $284.0 million, which consisted of $34.0 million from Supernova's trust and operating accounts, $200.0 million from the PIPE Investment and $50.0 million from the Forward Purchase Agreements. Total transaction costs were $51.2 million, which principally consisted of advisory, legal and other professional fees. Cumulative debt repayments of $63.4 million, inclusive of accrued but unpaid interest, were paid in conjunction with the close.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 70

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**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

**Note 3. Inventory**

The components of inventory, net of applicable lower of cost or net realizable value adjustments, consist of the following as of December 31:

---

| | | |
|:---|:---|:---|
| ($ in thousands) | **2022** | **2021** |
| Homes preparing for and under renovation | $54499 | $327455 |
| Homes listed for sale | 440862 | 400308 |
| Homes under contract to sell | 169336 | 404808 |
| &nbsp;&nbsp;&nbsp;**Inventory** | $664697 | $1132571 |

---

**Note 4. Property and Equipment**

Property and equipment consist of the following as of December 31:

---

| | | |
|:---|:---|:---|
| ($ in thousands) | **2022** | **2021** |
| Rooftop solar panel systems | $5075 | $5075 |
| Leasehold improvements | 1087 | 797 |
| Office equipment and furniture | 736 | 160 |
| Software systems | 386 | 318 |
| Computers and equipment | 265 | 265 |
| Construction in progress | 136 |  |
| &nbsp;&nbsp;&nbsp;**Property and equipment, gross** | 7685 | 6615 |
| &nbsp;&nbsp;&nbsp;Less: accumulated depreciation | (2491) | (1469) |
| &nbsp;&nbsp;&nbsp;**Property and equipment, net** | $5194 | $5146 |

---

Depreciation expense totaled $1.0 million, $0.5 million and $0.4 million during the years ended December 31, 2022, 2021 and 2020, respectively.

**Note 5. Leases**

The Company's operating lease arrangements consist of its corporate headquarters in Chandler, Arizona and field office facilities in most of the metropolitan markets in which the Company operates in the United States. These leases typically have original lease terms of 1 year to 6 years, and some leases contain multiyear renewal options. The Company does not have any finance lease arrangements.

The Company's operating lease costs are included in operating expenses in our consolidated statements of operations. During the years ended December 31, 2022 and 2021, operating lease cost was $2.1 million, and $1.4 million, respectively, and variable and short-term lease costs were $0.3 million and $0.2 million, respectively. Rent expense for operating leases, as previously reported under former lease accounting standards, was $1.4 million during the year ended December 31, 2020.

During the years ended December 31, 2022 and 2021, cash payments for amounts included in the measurement of operating lease liabilities were $2.0 million and $1.4 million, respectively, and right-of-use assets obtained in exchange for new or acquired operating lease liabilities were $2.5 million and $1.6 million during the respective periods.

As of December 31, 2022 and 2021, the Company's operating leases had a weighted-average remaining lease term of 2.7 years and 3.5 years, respectively, and a weighted-average discount rate of 4.2% and 4.1%, respectively.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 71

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**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

The Company's operating lease liability maturities as of December 31, 2022 are as follows:

---

| | |
|:---|:---|
| ($ in thousands) |  |
| 2023 | $2461 |
| 2024 | 2373 |
| 2025 | 1103 |
| 2026 | 269 |
| 2027 | 79 |
| Thereafter |  |
| &nbsp;&nbsp;&nbsp;Total future lease payments | 6285 |
| Less: Imputed interest | (332) |
| &nbsp;&nbsp;&nbsp;Total lease liabilities | $5953 |

---

The Company's operating lease right-of-use assets and operating lease liabilities, and the associated financial statement line items, are as follows as of December 31:

---

| | | | |
|:---|:---|:---|:---|
| ($ in thousands) | **Financial Statement Line Items** | **2022** | **2021** |
| Right-of-use assets | Other non-current assets | $5469 | $4784 |
| Lease liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;Current liabilities | Accrued and other current liabilities | 2264 | 1345 |
| &nbsp;&nbsp;&nbsp;Non-current liabilities | Other long-term liabilities | 3689 | 3830 |
| Total lease liabilities |  | $5953 | $5175 |

---

**Note 6. Accrued and Other Liabilities**

Accrued and other current liabilities consist of the following as of December 31:

---

| | | |
|:---|:---|:---|
| ($ in thousands) | **2022** | **2021** |
| Payroll and other employee related expenses | $10670 | $12836 |
| Interest | 4360 | 3537 |
| Marketing | 4161 | 5795 |
| Home renovation | 3168 | 8540 |
| Operating lease liabilities | 2264 | 1345 |
| Legal and professional obligations | 1035 | 1743 |
| Other | 2594 | 1231 |
| &nbsp;&nbsp;&nbsp;**Accrued and other current liabilities** | $28252 | $35027 |

---

Other long-term liabilities as of December 31, 2022 consists of the non-current portion of our operating lease liabilities.

**Note 7. Credit Facilities and Other Debt**

The carrying value of the Company's credit facilities and other debt consists of the following as of December 31:

---

| | | |
|:---|:---|:---|
| ($ in thousands) | **2022** | **2021** |
| <u>Credit facilities and other debt, net</u> |  |  |
| Senior secured credit facilities with financial institutions | $471860 | $747514 |
| Senior secured credit facility with a related party | 17398 | 81926 |
| Senior secured debt - other | 89024 | 33320 |
| Mezzanine secured credit facilities with third-party lenders | 49626 | 87851 |
| Mezzanine secured credit facilities with a related party | 42778 | 82508 |
| Debt issuance costs | (4621) | (6923) |
| &nbsp;&nbsp;&nbsp;Total credit facilities and other debt, net | 666065 | 1026196 |
| <u>Current portion - credit facilities and other debt, net</u> |  |  |
| Total credit facilities and other debt, net | 605889 | 861762 |
| Total credit facilities and other debt - related party | 60176 | 164434 |
| &nbsp;&nbsp;&nbsp;Total credit facilities and other debt, net | $666065 | $1026196 |

---

Offerpad Solutions Inc. \| 2022 Form 10-K \| 72

------

**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

The Company utilizes inventory financing facilities consisting of senior secured credit facilities, mezzanine secured credit facilities and other senior secured borrowing arrangements to provide financing for the Company's real estate inventory purchases and renovation. Borrowings under the Company's credit facilities and other debt are classified as current liabilities on the accompanying consolidated balance sheets as amounts drawn to purchase and renovate homes are required to be repaid as the related real estate inventory is sold, which is expected to be within 12 months.

As of December 31, 2022, the Company had total borrowing capacity of $1,927.5 million under its senior secured credit facilities and mezzanine secured credit facilities, of which $838.4 million was committed. Any borrowings above the committed amounts are subject to the applicable lender's discretion.

Under the Company's senior secured credit facilities and mezzanine secured credit facilities, amounts can be borrowed, repaid and borrowed again during the revolving period. The borrowing capacity is generally available until the end of the applicable revolving period as reflected in the tables below. Outstanding amounts drawn under each senior secured credit facility and mezzanine secured credit facility are required to be repaid on the facility maturity date or earlier if accelerated due to an event of default or other mandatory repayment event.

The Company's senior secured credit facilities and mezzanine secured credit facilities have aggregated borrowing bases, which increase or decrease based on the cost and value of the properties financed under a given facility and the time that those properties are in the Company's possession. When the Company resells a home, the proceeds are used to reduce the corresponding outstanding balance under the related senior and mezzanine secured revolving credit facilities. The borrowing base for a given facility may be reduced as properties age beyond certain thresholds or the performance of the properties financed under that facility declines, and any borrowing base deficiencies may be satisfied through contributions of additional properties or partial repayment of the facility.

**Senior Secured Credit Facilities**

The following summarizes certain details related to the Company's senior secured credit facilities (in thousands, except interest rates):

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Borrowing Capacity** | **Borrowing Capacity** | **Borrowing Capacity** | **Outstanding** | **Weighted-<br>Average<br>Interest** | **End of<br>Revolving / <br>Withdrawal** | **Final<br>Maturity** |
| **As of December 31, 2022** | **Committed** | **Uncommitted** | **Total** | **Amount** | **Rate** | **Period** | **Date** |
| Financial institution 1 | $300000 | $300000 | $600000 | $228823 | 4.74% | June 2024 | June 2024 |
| Financial institution 2 | 200000 | 200000 | 400000 | 123478 | 4.11% | September 2023 | March 2024 |
| Financial institution 3 | 125000 | 375000 | 500000 | 119559 | 4.48% | December 2023 | December 2023 |
| Related party | 50000 | 25000 | 75000 | 17398 | 6.46% | March 2024 | September 2024 |
| &nbsp;&nbsp;**Senior secured credit facilities** | $675000 | $900000 | $1575000 | $489258 |  |  |  |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Borrowing Capacity** | **Borrowing Capacity** | **Borrowing Capacity** | **Outstanding** | **Weighted-<br>Average<br>Interest** |
| **As of December 31, 2021** | **Committed** | **Uncommitted** | **Total** | **Amount** | **Rate** |
| Financial institution 1 | $300000 | $100000 | $400000 | $365392 | 2.60% |
| Financial institution 2 | 400000 |  | 400000 | 375063 | 2.60% |
| Financial institution 3 | 300000 | 200000 | 500000 | 7059 | 2.60% |
| Related party | 85000 |  | 85000 | 81926 | 4.10% |
| &nbsp;&nbsp;**Senior secured credit facilities** | $1085000 | $300000 | $1385000 | $829440 |  |

---

As of December 31, 2022, the Company had four senior secured credit facilities, three with separate financial institutions and one with a related party, which holds more than 5% of our Class A common stock. Borrowings under the senior secured credit facilities accrue interest at a rate based on a Secured Overnight Financing Rate ("SOFR") reference rate, plus a margin which varies by facility. The Company may also pay fees on its senior secured credit facilities, including a commitment fee and fees on certain unused portions of the committed borrowing capacity, as defined in the respective credit agreements.

Borrowings under the Company's senior secured credit facilities are collateralized by the real estate inventory financed by the senior secured credit facility. The lenders have legal recourse only to the assets securing the debt and do not have general

Offerpad Solutions Inc. \| 2022 Form 10-K \| 73

------

**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

recourse against the Company with limited exceptions. The Company has, however, provided limited non-recourse carve-out guarantees under its senior and mezzanine secured credit facilities for certain of the SPEs' obligations in situations involving "bad acts" by an Offerpad entity and certain other limited circumstances that are generally under the Company's control. Each senior secured facility contains eligibility requirements that govern whether a property can be financed.

During February 2023, the Company amended its credit facility with financial institution 2, which, among other things, reduced the total borrowing capacity on the facility from $400.0 million to $200.0 million, $100.0 million of which is committed.

**Mezzanine Secured Credit Facilities**

The following summarizes certain details related to the Company's mezzanine secured credit facilities (in thousands, except interest rates):

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Borrowing Capacity** | **Borrowing Capacity** | **Borrowing Capacity** | **Outstanding** | **Weighted-<br>Average<br>Interest** | **End of<br>Revolving / <br>Withdrawal** | **Final<br>Maturity** |
| **As of December 31, 2022** | **Committed** | **Uncommitted** | **Total** | **Amount** | **Rate** | **Period** | **Date** |
| Related party facility 1 | $65000 | $32500 | $97500 | $38937 | 11.00% | June 2024 | June 2024 |
| Third-party lender 1 | 45000 | 45000 | 90000 | 31239 | 9.55% | September 2023 | March 2024 |
| Third-party lender 2 | 18387 | 94113 | 112500 | 18387 | 9.50% | December 2023 | December 2023 |
| Related party facility 2 | 35000 | 17500 | 52500 | 3841 | 11.05% | March 2024 | September 2024 |
| &nbsp;&nbsp;**Mezzanine secured credit facilities** | $163387 | $189113 | $352500 | $92404 |  |  |  |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Borrowing Capacity** | **Borrowing Capacity** | **Borrowing Capacity** | **Outstanding** | **Weighted-<br>Average<br>Interest** |
| **As of December 31, 2021** | **Committed** | **Uncommitted** | **Total** | **Amount** | **Rate** |
| Related party facility 1 | $65000 | $— | $65000 | $58767 | 13.00% |
| Third-party lender 1 | 90000 |  | 90000 | 86262 | 9.50% |
| Third-party lender 2 | 67500 | 45000 | 112500 | 1588 | 9.50% |
| Related party facility 2 | 14000 |  | 14000 | 23742 | 13.00% |
| &nbsp;&nbsp;**Mezzanine secured credit facilities** | $236500 | $45000 | $281500 | $170359 |  |

---

As of December 31, 2022, the Company had four mezzanine secured credit facilities, two with separate third-party lenders and two with a related party, which holds more than 5% of our Class A common stock. Borrowings under the Company's mezzanine secured credit facilities accrue interest at fixed rates, which vary by facility and range from 9.5% to 13.0%. The Company may also pay fees on its mezzanine secured credit facilities, including a commitment fee and fees on certain unused portions of the committed borrowing capacity, as defined in the respective credit agreements.

Borrowings under the Company's mezzanine secured credit facilities are collateralized by a second lien on the real estate inventory financed by the relevant credit facility. The lenders have legal recourse only to the assets securing the debt, and do not have general recourse to Offerpad with limited exceptions.

The Company's mezzanine secured credit facilities are structurally and contractually subordinated to the related senior secured credit facilities.

During February 2023, the Company amended its credit facility with third-party lender 1, which, among other things, reduced the total borrowing capacity on the facility from $90.0 million to $45.0 million, $22.5 million of which is committed.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 74

------

**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

**Maturities**

As of December 31, 2022, certain of the Company's senior secured credit facilities and mezzanine secured credit facilities mature within the next twelve months following the date these consolidated financial statements are issued. The Company expects to enter into new financing arrangements or amend existing arrangements to meet its obligations as they come due, which the Company believes is probable based on its history of prior credit facility renewals. The Company believes cash on hand, together with proceeds from the resale of homes and cash from future borrowings available under each of the Company's existing credit facilities or the entry into new financing arrangements (including the Private Placement (as defined in Note 17. Subsequent Events), will be sufficient to meet its obligations as they become due in the ordinary course of business for at least 12 months following the date these consolidated financial statements are issued.

**Covenants for Senior Secured Credit Facilities and Mezzanine Secured Credit Facilities**

The secured credit facilities include customary representations and warranties, covenants and events of default. Financed properties are subject to customary eligibility criteria and concentration limits. The terms of these facilities and related financing documents require the Company to comply with a number of customary financial and other covenants, such as maintaining certain levels of liquidity, tangible net worth or leverage (ratio of debt to tangible net worth).

As of December 31, 2022, the Company was in compliance with all covenants and no event of default had occurred.

**Senior Secured Debt - Other** 

As of December 31, 2022, the Company has borrowing arrangements with two separate third-party lenders to support purchases of real estate inventory. Borrowings under each of these arrangements accrue interest at a rate based on a SOFR reference rate, plus a margin which varies by arrangement. As of December 31, 2022 and 2021, the weighted-average interest rates under the Company's other senior secured debt were 7.23% and 5.79%, respectively.

**Note 8. Warrant Liabilities**

In connection with the Business Combination, the Company assumed 13.4 million public warrants and 6.7 million private placement warrants, both of which were previously issued by Supernova. Further, upon the closing of the Business Combination, an additional 1.7 million private placement warrants were issued. As such, as of September 1, 2021, the Company had outstanding warrants to purchase an aggregate of up to 21.8 million shares of Offerpad Solutions Class A common stock that will become exercisable securities in the future after certain requirements have been met.

During 2022, a private placement warrant holder elected to transfer 1.8 million private placement warrants, upon which the warrants were converted into public warrants pursuant to the terms of the Warrant Agreement. Accordingly, as of December 31, 2022, the Company had 15.2 million public warrants and 6.6 million private placement warrants outstanding.

**Public Warrants**

Each public warrant entitles the registered holder to acquire one share of the Company's Class A common stock at a price of $11.50 per share, subject to adjustment as discussed below. The warrants became exercisable on October 23, 2021. A holder may exercise its warrants only for a whole number of shares of Class A common stock. This means only a whole warrant may be exercised at a given time by a warrant holder. The public warrants will expire September 1, 2026, or earlier upon redemption or liquidation.

Redemption of warrants for cash

The Company may call the public warrants for redemption for cash:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•in whole and not in part;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•at a price of $0.01 per warrant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•upon not less than 30 days prior written notice of redemption to each warrant holder; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•if, and only if, the last reported sale price of the Company's Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of the Company's Class A common stock and equity-linked securities) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the warrant holders.

If and when the warrants become redeemable by the Company for cash, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

Redemption of warrants for shares of Class A common stock

Offerpad Solutions Inc. \| 2022 Form 10-K \| 75

------

**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

The Company may redeem the outstanding warrants for shares of Class A common stock:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•in whole and not in part;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•at $0.10 per warrant upon a minimum of 30 days prior written notice of redemption provided that holders will be able to exercise their warrants prior to redemption and receive that number of shares determined by reference to an agreed table, based on the redemption date and the "fair market value" of Class A common stock (as defined below) except as otherwise described below;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•if, and only if, the last reported sale price of the Company's Class A common stock equals or exceeds $10.00 per share (as adjusted per stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of the Company's Class A common stock and equity-linked securities) on the trading day prior to the date on which the Company sends the notice of redemption to the warrant holders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•if and only if, the private placement warrants are also concurrently exchanged at the same price (equal to a number of shares of our Class A common stock) as the outstanding public warrants, as described above.

The "fair market value" of the Class A common stock shall mean the average of the last reported sales price for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of Class A common stock per warrant (subject to adjustment).

**Private Placement Warrants**

The private placement warrants are not redeemable by us so long as they are held by the Supernova Sponsor or its permitted transferees, except in certain limited circumstances. The Supernova Sponsor, or its permitted transferees, has the option to exercise the private placement warrants on a cashless basis and the Supernova Sponsor and its permitted transferees has certain registration rights related to the private placement warrants (including the shares of Class A common stock issuable upon exercise of the private placement warrants). Except as described in this section, the private placement warrants have terms and provisions that are identical to those of the public warrants. If the private placement warrants are held by holders other than the Supernova Sponsor or its permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by the holders on the same basis as the public warrants.

**Note 9. Fair Value Measurements**

The fair values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and certain prepaid and other current assets and accrued expenses approximate carrying values because of their short-term nature. The Company's credit facilities are carried at amortized cost and the carrying value approximates fair value because of their short-term nature.

The Company's liabilities that are measured at fair value on a recurring basis consist of the following (in thousands):

---

| | | | |
|:---|:---|:---|:---|
| **As of December 31, 2022** | **Quoted Prices in<br>Active Markets for <br>Identical Liabilities<br>(Level 1)** | **Significant Other<br>Observable Inputs<br>(Level 2)** | **Significant<br>Unobservable Inputs<br>(Level 3)** |
| Public warrant liabilities | $343 | $— | $— |
| Private placement warrant liabilities | $— | $— | $196 |

---

---

| | | | |
|:---|:---|:---|:---|
| **As of December 31, 2021** | **Quoted Prices in<br>Active Markets for <br>Identical Liabilities<br>(Level 1)** | **Significant Other<br>Observable Inputs<br>(Level 2)** | **Significant<br>Unobservable Inputs<br>(Level 3)** |
| Public warrant liabilities | $14356 | $— | $— |
| Private placement warrant liabilities | $— | $— | $9705 |

---

**Public Warrants**

The public warrants were initially recognized as a liability in connection with the Business Combination on September 1, 2021. The fair value of the public warrants is estimated based on the quoted market price of such warrants on the valuation date. The Company recorded changes in the fair value of the public warrants of $14.0 million and $1.8 million during the years ended December 31, 2022 and 2021, respectively. These changes are recorded in Change in fair value of warrant liabilities in our consolidated statements of operations.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 76

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**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

**Private Placement Warrants**

The private placement warrants were initially recognized as a liability in connection with the Business Combination on September 1, 2021. The following summarizes the changes in the Company's private placement warrant liabilities, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the respective periods:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
| ($ in thousands) | **2022** | **2021** |
| **Beginning balance** | $9705 | $— |
| &nbsp;&nbsp;&nbsp;Initial fair value of private placement warrants |  | 10291 |
| &nbsp;&nbsp;&nbsp;Change in fair value of private placement warrants included in net (loss) income | (9509) | (586) |
| **Ending balance** | $196 | $9705 |

---

The following summarizes the range of assumptions used in the Black-Scholes-Merton option-pricing model to determine the fair value of the private placement warrants during the respective periods:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** |
| Volatility | 47.00% - 83.50% | 25.00% - 40.50% |
| Stock price | $0.46 - $5.03 | $6.40 - $8.80 |
| Expected life of the options to convert | 3.669 - 4.419 | 4.669 - 5.000 |
| Risk-free rate | 2.43% - 4.16% | 0.78% - 1.22% |
| Dividend yield | 0.00% | 0.00% |

---

Volatility: Expected volatility is estimated using a Monte Carlo simulation model to determine volatility based on the trading price of the public warrants and to reflect the probability of different outcomes.

Expected Life: The expected life of the warrants is assumed to be equivalent to their remaining contractual term.

Risk-Free Interest Rate: The risk-free interest rate is estimated based on the U.S. Treasury zero-coupon yield curve on the valuation date for a maturity similar to the expected remaining life of the warrants.

Expected Dividend Yield: The expected dividend yield assumption considers that we have not historically paid dividends and we do not expect to pay dividends in the foreseeable future.

There were no transfers between Levels 1, 2, and 3 during the years ended December 31, 2022, 2021 and 2020.

**Note 10. Stockholders' Equity**

**Authorized Capital Stock**

The Company's charter authorizes the issuance of 2,370,000,000 shares, which includes Class A common stock, Class B common stock, Class C common stock and preferred stock.

**Class A Common Stock**

Subsequent to the Closing of the Business Combination, our Class A common stock and warrants began trading on the New York Stock Exchange ("NYSE") under the symbols "OPAD" and "OPAD WS," respectively. Pursuant to the Company's charter, the Company is authorized to issue 2,000,000,000 shares of Class A common stock, par value $0.0001 per share. As of December 31, 2022, we had 232,378,752 shares of Class A common stock issued and outstanding.

Prior to the Business Combination, Old Offerpad had outstanding shares of Series A, Series A-1, Series A-2, Series B and Series C convertible preferred stock (collectively, "Preferred Stock"). Upon the Closing of the Business Combination, each share of Old Offerpad's Preferred Stock and common stock that was issued and outstanding immediately prior to the effective time of the Merger was cancelled and converted into Offerpad Solutions Inc. Class A common stock with the application of the Exchange Ratio as discussed in Note 3, Business Combination.

Additionally, we have outstanding warrants to purchase shares of Offerpad Solutions Class A common stock that will become exercisable securities in the future after certain requirements have been met. Refer to Note 8. Warrant Liabilities.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 77

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**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

**Class B Common Stock**

Pursuant to the Company's charter, the Company is authorized to issue 20,000,000 shares of Class B common stock, par value $0.0001 per share.

In connection with the Closing of the Business Combination, Brian Bair, the Chief Executive Officer and Founder of the Company, or entities controlled by Mr. Bair, received Class B shares of Offerpad Solutions Inc. common stock as consideration. These Class B shares entitle Mr. Bair or his permitted transferees to 10 votes per share until the earlier of (a) the date that is nine months following the date on which Mr. Bair (x) is no longer providing services, whether upon death, resignation, removal or otherwise, to Offerpad Solutions as a member of the senior leadership team, officer or director and (y) has not provided any such services for the duration of such nine-month period; and (b) the date as of which Mr. Bair or his permitted transferees have transferred, in the aggregate, more than seventy-five (75%) of the shares of Class B common stock that were held by Mr. Bair and his permitted transferees immediately following the Closing.

As of December 31, 2022, we had 14,816,236 shares of Class B common stock issued and outstanding.

In January 2023, Mr. Bair notified the Company's Board of Directors that he will convert all shares of Class B common stock beneficially owned by him to shares of Class A common stock immediately following the conclusion of the Company's 2023 annual meeting of stockholders.

**Class C Common Stock**

Pursuant to the Company's charter, the Company is authorized to issue 250,000,000 shares of Class C common stock, par value $0.0001 per share. Our Class C common stock will entitle its holder to have substantially the same rights as Class A common stock, except it will not have any voting rights. As of December 31, 2022, there were no shares of Class C common stock issued and outstanding.

**Preferred Stock**

Pursuant to the Company's charter, the Company is authorized to issue 100,000,000 shares of preferred stock, par value $0.0001 per share. Our board of directors has the authority without action by the stockholders, to designate and issue shares of preferred stock in one or more classes or series, and the number of shares constituting any such class or series, and to fix the voting powers, designations, preferences, limitations, restrictions and relative rights of each class or series of preferred stock, including, without limitation, dividend rights, conversion rights, redemption privileges and liquidation preferences, which rights may be greater than the rights of the holders of the common stock. As of December 31, 2022, there were no shares of preferred stock issued and outstanding.

**Dividends**

Our Class A and Class B common stock are entitled to dividends if and when any dividend is declared by our board of directors, subject to the rights of all classes of stock outstanding having priority rights to dividends. We have not paid any cash dividends on common stock to date. We may retain future earnings, if any, for the further development and expansion of our business and have no current plans to pay cash dividends for the foreseeable future. Any future determination to pay dividends will be made at the discretion of our board of directors and will depend on, among other things, our financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as our board of directors may deem relevant.

**Note 11. Stock-Based Awards**

**2016 Stock Plan**

Prior to the Closing of the Business Combination, the Company maintained the OfferPad 2016 Stock Option and Grant Plan (the "2016 Plan") that allowed for granting of incentive and non-qualified stock options to employees, directors, and consultants.

In connection with the Business Combination, each option granted under the 2016 Plan that was outstanding immediately prior to the Business Combination, whether vested or unvested, was assumed and converted into an option to purchase a number of shares of Class A common stock (rounded down to the nearest whole share) equal to the product of (i) the number of shares of Old Offerpad common stock subject to such Old Offerpad option immediately prior to the Business Combination and (ii) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to the quotient obtained by dividing (A) the exercise price per share of such Old Offerpad option immediately prior to the consummation of the Business Combination by (B) the Exchange Ratio. Stock option activity prior to the Business Combination was retroactively adjusted to reflect this conversion.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 78

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**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

Awards outstanding under the 2016 Plan were assumed by Offerpad Solutions upon the Closing and continue to be governed by the terms and conditions of the 2016 Plan and applicable award agreement. Shares of our common stock subject to awards granted under the 2016 Plan that expire unexercised or are cancelled, terminated, or forfeited in any manner without issuance of shares thereunder following the effective date of the 2021 Plan (as defined below), will not again become available for issuance under the 2016 Plan or the 2021 Plan.

In connection with the completion of the Business Combination and the adoption of the 2021 Plan, no additional awards will be granted under the 2016 Plan.

**2021 Equity Incentive Plans**

In connection with the Business Combination, our board of directors adopted, and our stockholders approved, the Offerpad Solutions Inc. 2021 Incentive Award Plan (the "2021 Plan") under which 26,333,222 shares of Class A common stock were initially reserved for issuance. The 2021 Plan allows for the issuance of incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock or cash based awards. The number of shares of the Company's Class A common stock available for issuance under the 2021 Plan increases annually on the first day of each calendar year, beginning on and including January 1, 2022 and ending on and including January 1, 2031 equal to the lesser of (i) a number of shares such that the aggregate number of shares of Class A common stock available for grant under the 2021 Plan immediately following such increase shall be equal to 5% of the number of fully-diluted shares on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of Class A common stock as is determined by the Company's board of directors. As of December 31, 2022, the Company has granted stock options, restricted stock units ("RSUs") and performance-based RSUs ("PSUs") under the 2021 Plan.

In connection with the close of the Business Combination, our board of directors adopted, and our stockholders approved the Offerpad Solutions Inc. 2021 Employee Stock Purchase Plan ("ESPP"). There are 2,633,322 shares of Class A common stock initially reserved for issuance under the ESPP. The number of shares of the Company's Class A common stock available for issuance under the ESPP increases annually on the first day of each calendar year, beginning on and including January 1, 2022 and ending on and including January 1, 2031, by the lesser of (a) a number of shares such that the aggregate number of shares of Class A common stock available for grant under the ESPP immediately following such increase shall be equal to 1% of the number of fully-diluted shares on the final day of the immediately preceding calendar year and (b) such smaller number of shares of Class A common stock as determined by the Company's board of directors; provided that, no more than 50,000,000 shares of Class A common stock may be issued under the ESPP. As of December 31, 2022, no shares have been issued under the ESPP.

**Stock Options**

During the years ended December 31, 2022, 2021 and 2020, the Company granted stock option awards with a service vesting condition that is generally four years. The range of assumptions used in the Black-Scholes-Merton option pricing model to determine the fair value of stock option awards granted during the respective years are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **2022 Range** | **2021 Range** | **2020 Range** |
| Expected term (in years) | 6.25 | 5.97 - 6.10 | 5.36 - 6.11 |
| Risk-free interest rate | 1.63% - 3.37% | 0.64% - 0.67% | 0.38% - 0.46% |
| Expected stock price volatility | 57.8% - 60.0% | 52.5% - 52.7% | 51.7% - 52.9% |
| Expected dividend yield |  |  |  |
| Fair value on grant date | $1.43 - $5.11 | $4.49 - $4.55 | $4.27 - $4.49 |

---

Offerpad Solutions Inc. \| 2022 Form 10-K \| 79

------

**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

The following summarizes stock option activity during the years ended December 31, 2022, 2021 and 2020:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of<br>Shares**<br> (in thousands) | **Weighted-<br>Average<br>Exercise Price<br>Per Share** | **Weighted-Average<br>Remaining<br>Contractual<br>Term**<br> (in years) | **Aggregate<br>Intrinsic<br>Value**<br> (in thousands) |
| **Outstanding as of December 31, 2019** | 23669 | 0.55 | 7.71 | $16275 |
| Granted | 5258 | 1.22 |  |  |
| Exercised |  |  |  |  |
| Forfeited or cancelled | (1336) | 0.54 |  |  |
| **Outstanding as of December 31, 2020** | 27591 | 0.68 | 7.40 | 14619 |
| Granted | 1559 | 1.22 |  |  |
| Exercised | (2490) | 0.36 |  |  |
| Forfeited or cancelled | (1084) | 0.85 |  |  |
| **Outstanding as of December 31, 2021** | 25576 | 0.73 | 6.82 | 137170 |
| Granted | 1147 | 4.90 |  |  |
| Exercised | (8101) | 0.58 |  |  |
| Forfeited or cancelled | (895) | 1.46 |  |  |
| **Outstanding as of December 31, 2022** | 17727 | 1.02 | 5.82 | 953 |
| **Exercisable as of December 31, 2022** | 14122 | 0.72 | 5.24 | 953 |
| **Vested and expected to vest as of December 31, 2022** | 17727 | 1.02 | 5.82 | 953 |

---

The total intrinsic value of stock options exercised during the years ended December 31, 2022 and 2021 was $35.8 million and $10.5 million, respectively. No stock options were exercised during the year ended December 31, 2020.

The weighted-average grant date fair value per option granted during the years ended December 31, 2022, 2021 and 2020 was $2.73, $0.60 and $0.61, respectively.

As of December 31, 2022, the Company had $3.5 million of unrecognized stock-based compensation expense related to unvested stock options. This expense is expected to be recognized over a weighted average period of 1.98 years. The fair value of stock options that vested during the years ended December 31, 2022, 2021 and 2020 was $2.1 million, $2.6 million and $1.2 million, respectively.

**Restricted Stock Units**

The Company did not grant restricted stock unit ("RSU") awards during the year December 31, 2020.

During the years ended December 31, 2022 and 2021, the Company granted RSUs with service vesting conditions to employees and non-employee members of our board of directors. The vesting period for RSUs granted to employees is generally three years, subject to continued employment, and the vesting period for RSUs granted to non-employee members of our board of directors generally ranges from three months to three years, subject to continued service on the board of directors.

The following summarizes RSU award activity during the years ended December 31, 2022 and 2021:

---

| | | |
|:---|:---|:---|
|  | **Number of<br>RSUs**<br> (in thousands) | **Weighted<br>Average<br>Grant Date <br>Fair Value** |
| **Outstanding as of December 31, 2020** |  | $— |
| &nbsp;&nbsp;&nbsp;Granted | 203 | 7.88 |
| &nbsp;&nbsp;&nbsp;Vested and settled |  |  |
| &nbsp;&nbsp;&nbsp;Forfeited or expired |  |  |
| **Outstanding as of December 31, 2021** | 203 | 7.88 |
| &nbsp;&nbsp;&nbsp;Granted | 2118 | 4.50 |
| &nbsp;&nbsp;&nbsp;Vested and settled | (163) | 5.33 |
| &nbsp;&nbsp;&nbsp;Forfeited or expired | (193) | 5.05 |
| **Outstanding as of December 31, 2022** | 1965 | 4.73 |

---

Offerpad Solutions Inc. \| 2022 Form 10-K \| 80

------

**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

As of December 31, 2022, 351,600 RSUs have vested, but have not yet been settled in shares of the Company's Class A common stock, pursuant to elections made by certain non-employee members of our board of directors to defer settlement thereof under the Offerpad Solutions Inc. Deferred Compensation Plan for Directors.

As of December 31, 2022, the Company had $6.2 million of unrecognized stock-based compensation expense related to unvested RSUs. This expense is expected to be recognized over a weighted average period of 1.89 years. The fair value of RSUs that vested during the years ended December 31, 2022 and 2021 was $1.6 million and $0.1 million, respectively.

**Performance-Based Restricted Stock Units**

The Company did not grant PSUs during the years ended December 31, 2020 and 2021, respectively.

During the year ended December 31, 2022, The Company granted PSUs which include both a service vesting condition and a performance vesting condition that is associated with the share price of the Company's Class A common stock. Subject to the employee's continued employment or service through the end of the performance period, the PSUs will vest based on the achievement of predetermined price per share goals over the performance period calculated based on the average price per share over any 60 consecutive calendar-day period during the performance period. Shares earned under the PSU awards are transferred to the award holders upon the completion of the requisite service period of three years. If the average price per share does not meet the minimum price per share goal as of the last day of the performance period, the PSUs automatically will be forfeited and terminated without consideration.

The assumptions used in the Monte Carlo simulation model to determine the fair value of the PSU awards granted during the year ended December 31, 2022 are as follows:

---

| | |
|:---|:---|
| Risk-free interest rate | 1.47% |
| Expected stock price volatility | 60.0% |
| Expected dividend yield | 0.0% |
| Fair value on grant date | $5.11 |

---

The following summarizes PSU award activity during the year ended December 31, 2022:

---

| | | |
|:---|:---|:---|
|  | **Number of<br>PSUs**<br> (in thousands) | **Weighted<br>Average<br>Grant Date <br>Fair Value** |
| **Outstanding as of December 31, 2021** |  | $— |
| &nbsp;&nbsp;&nbsp;Granted | 2115 | 4.72 |
| &nbsp;&nbsp;&nbsp;Vested |  |  |
| &nbsp;&nbsp;&nbsp;Forfeited or expired | (175) | 4.72 |
| **Outstanding as of December 31, 2022** | 1940 | 4.72 |

---

As of December 31, 2022, the Company had $6.6 million of unrecognized stock-based compensation expense related to unvested PSUs. This expense is expected to be recognized over a weighted average period of 2.16 years.

**Stock-based Compensation Expense**

The following details stock-based compensation expense for the years ended December 31:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| ($ in thousands) | **2022** | **2021** | **2020** |
| Sales, marketing and operating | $2023 | $700 | $375 |
| General and administrative | 5743 | 1889 | 544 |
| Technology and development | 541 | 490 | 444 |
| &nbsp;&nbsp;&nbsp;**Stock-based compensation expense** | $8307 | $3079 | $1363 |

---

Offerpad Solutions Inc. \| 2022 Form 10-K \| 81

------

**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

**Note 12. Variable Interest Entities**

The Company formed certain special purpose entities (each, an "SPE") to purchase and sell residential properties. Each SPE is a wholly owned subsidiary of the Company and a separate legal entity, and neither the assets nor credit of any such SPE are available to satisfy the debts and other obligations of any affiliate or other entity. The credit facilities are secured by the assets and equity of one or more SPEs. These SPEs are variable interest entities, and the Company is the primary beneficiary as it has the power to control the activities that most significantly impact the SPEs' economic performance and the obligation to absorb losses of the SPEs or the right to receive benefits from the SPEs that could potentially be significant to the SPEs. The SPEs are consolidated within the Company's consolidated financial statements.

The following summarizes the assets and liabilities related to the VIEs as of December 31:

---

| | | |
|:---|:---|:---|
| ($ in thousands) | **2022** | **2021** |
| **Assets** |  |  |
| Restricted cash | $42958 | $24616 |
| Accounts receivable | 1841 | 4845 |
| Inventory | 664697 | 1132571 |
| Prepaid expenses and other current assets | 212 | 2871 |
| &nbsp;&nbsp;&nbsp;Total assets | $709708 | $1164903 |
| **Liabilities** |  |  |
| Accounts payable | $1976 | $2810 |
| Accrued and other current liabilities | 4408 | 3537 |
| Secured credit facilities and other debt, net - current portion | 666065 | 1026196 |
| &nbsp;&nbsp;&nbsp;Total liabilities | $672449 | $1032543 |

---

Offerpad Solutions Inc. \| 2022 Form 10-K \| 82

------

**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

**Note 13. Earnings Per Share**

Basic earnings per share is calculated based on the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated based on the weighted average number of common shares plus the incremental effect of dilutive potential common shares outstanding during the period. In periods when losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

The components of basic and diluted earnings per share are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| (In thousands, except per share data) | **2022** | **2021** | **2020** |
| **Numerator:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Net (loss) income | $(148613) | $6460 | $(23118) |
| **Denominator:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Weighted average common shares outstanding, basic | 245148 | 118571 | 57865 |
| &nbsp;&nbsp;&nbsp;Dilutive effect of stock options (1) |  | 24644 |  |
| &nbsp;&nbsp;&nbsp;Dilutive effect of restricted stock units (1) |  | 5 |  |
| &nbsp;&nbsp;&nbsp;Dilutive effect of preferred stock (1) |  |  |  |
| &nbsp;&nbsp;&nbsp;Dilutive effect of warrants (1) |  |  |  |
| &nbsp;&nbsp;&nbsp;Weighted average common shares outstanding, diluted | 245148 | 143220 | 57865 |
| Net (loss) income per share, basic | $(0.61) | $0.05 | $(0.40) |
| Net (loss) income per share, diluted | $(0.61) | $0.05 | $(0.40) |
| **Anti-dilutive securities excluded from diluted (loss) income per share:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Anti-dilutive stock options (1) | 5520 |  | 27591 |
| &nbsp;&nbsp;&nbsp;Anti-dilutive restricted stock units (1) | 1748 |  |  |
| &nbsp;&nbsp;&nbsp;Anti-dilutive performance-based restricted stock units | 2047 |  |  |
| &nbsp;&nbsp;&nbsp;Anti-dilutive warrants (1) | 21783 |  | 1887 |
| &nbsp;&nbsp;&nbsp;Anti-dilutive preferred stock (1) |  |  | 138612 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Due to the net loss during each of the years ended December 31, 2022 and 2020, no dilutive securities were included in the calculation of diluted loss per share because they would have been anti-dilutive.

**Note 14. Income Taxes**

The Company is subject to federal and state income taxes in the United States.

&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income before income taxes was $(148.3) million, $6.6 million and $(23.0) million during the years ended December 31, 2022, 2021 and 2020, respectively.

Income tax expense consisted of the following for the respective periods:

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
| ($ in thousands) | **2022** | **2021** | **2020** |
| Current: |  |  |  |
| &nbsp;&nbsp;&nbsp;Federal | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;State | 359 | 170 | 163 |
| **Total current** | 359 | 170 | 163 |
| Deferred: |  |  |  |
| &nbsp;&nbsp;&nbsp;Federal |  |  |  |
| &nbsp;&nbsp;&nbsp;State |  |  |  |
| **Total deferred** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Income tax expense** | $359 | $170 | $163 |

---

Offerpad Solutions Inc. \| 2022 Form 10-K \| 83

------

**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

The provision for income taxes differs from the tax computed using the statutory U.S. federal income tax rate as a result of the following items for the respective periods:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
| (In thousands, except percentages) | **2022** | **2022** | **2021** | **2021** | **2020** | **2020** |
| (Benefit) provision at federal statutory income tax rate | $(31133) | 21.0% | $1392 | 21.0% | $(4821) | 21.0% |
| State income taxes | (7636) | 5.2% | 360 | 5.4% | (446) | 1.9% |
| Change in fair value of warrant liabilities | (4940) | 3.3% | (517) | (7.8)% |  | 0.0% |
| Return-to-provision | (2277) | 1.5% | 221 | 3.3% | 218 | (0.9)% |
| Transaction costs | (1874) | 1.3% | (1226) | (18.5)% |  | 0.0% |
| Stock-based compensation | (1091) | 0.7% | 647 | 9.8% | 286 | (1.2)% |
| Valuation allowance | 48690 | (32.8)% | (675) | (10.2)% | 4999 | (21.8)% |
| Other | 620 | (0.4)% | (32) | (0.4)% | (73) | 0.3% |
| &nbsp;&nbsp;&nbsp;**Effective income tax rate** | $359 | (0.2)% | $170 | 2.6% | $163 | (0.7)% |

---

Deferred tax assets and liabilities consist of the following as of December 31:

---

| | | |
|:---|:---|:---|
| ($ in thousands) | **2022** | **2021** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;Federal net operating loss carryforwards | $50178 | $26721 |
| &nbsp;&nbsp;&nbsp;State net operating loss carryforwards | 9847 | 4703 |
| &nbsp;&nbsp;&nbsp;Inventory | 14771 | 341 |
| &nbsp;&nbsp;&nbsp;Research and development expenditures | 3190 |  |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 1852 |  |
| &nbsp;&nbsp;&nbsp;Transaction costs | 1707 |  |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | 1507 | 1284 |
| &nbsp;&nbsp;&nbsp;Other | 2117 | 2421 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Gross deferred tax assets** | 85169 | 35470 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Valuation allowance** | (82026) | (33336) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Deferred tax assets, net of valuation allowance** | 3143 | 2134 |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets | (1385) | (1187) |
| &nbsp;&nbsp;&nbsp;Property and equipment | (739) | (874) |
| &nbsp;&nbsp;&nbsp;Other | (1019) | (73) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Gross deferred tax liabilities** | (3143) | (2134) |
| **Net deferred income taxes** | $— | $— |

---

As of December 31, 2022, the Company had federal net operating loss carryforwards of $231.4 million to offset future taxable income, of which $26.0 million expires in 2036 and 2037 if not utilized, with the remaining $205.4 million having no expiration. The Company also has U.S. state net operating loss carryforwards of $195.1 million, of which $121.7 million expires at various dates ranging from 2032 through 2042 if not utilized, with the remaining $73.4 million having no expiration.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. As a result of historical cumulative losses, the Company has determined that, based on all available evidence, there was substantial uncertainty as to whether it will recover recorded net deferred taxes in future periods. Therefore, the Company recorded a full valuation allowance equal to the amount of the net deferred tax assets as of December 31, 2022 and 2021. The valuation allowance increased by $48.7 million during the year ended December 31, 2022, decreased by $0.7 million during the year ended December 31, 2021 and increased $5.0 million during the year ended December 31, 2020.

The Internal Revenue Code contains provisions that limit the utilization of net operating loss carryforwards and tax credit carryforwards if there has been an ownership change. Such ownership change, as described in Section 382 of the Internal Revenue Code, may limit the Company's ability to utilize its net operating loss carryforwards and tax credit carryforwards on a yearly basis. To the extent that any single-year limitation is not utilized to the full amount of the limitation, such unused amounts are carried over to subsequent years until the earlier of utilization or the expiration of the relevant carryforward

Offerpad Solutions Inc. \| 2022 Form 10-K \| 84

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**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

period. The Company determined that an ownership change occurred on February 10, 2017. An analysis was performed and while utilization of net operating losses would be limited in years prior to December 31, 2020, subsequent to that date, there is no limitation on the Company's ability to utilize its net operating losses. As such, the ownership change has no impact to the carrying value of the Company's net operating loss carryforwards or ability to use them in future years.

**Uncertain Tax Positions**

During the years ended December 31, 2022, 2021 and 2020, the Company had no uncertain tax positions.

**Income Tax Audits**

The Company files in U.S. federal and various state income tax jurisdictions. The Company is subject to U.S. federal and state income tax examinations by authorities for all tax years beginning in 2017 due to the accumulated net operating losses that are carried forward.

**Note 15. Related-Party Transactions**

**LL Credit Facilities**

As of December 31, 2022, we have one senior secured credit facility with a related party and two mezzanine secured credit facilities with a related party. The following summarizes certain details related to these facilities as of December 31:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | **2021** | **2021** |
| ($ in thousands) | **Borrowing<br>Capacity** | **Outstanding<br>Amount** | **Borrowing<br>Capacity** | **Outstanding<br>Amount** |
| Senior secured credit facility with a related party | $75000 | $17398 | $85000 | $81926 |
| Mezzanine secured credit facilities with a related party | $150000 | $42778 | $79000 | $82509 |

---

Since October 2016, we have been party to a loan and security agreement (the "LL Funds Loan Agreement"), with LL Private Lending Fund, L.P. and LL Private Lending Fund II, L.P., both of which are affiliates of LL Capital Partners I, L.P., which holds more than 5% of our Class A common stock. Additionally, Roberto Sella, who is a member of our board of directors, is the managing partner of LL Funds. The LL Funds Loan Agreement is comprised of a senior secured credit facility and a mezzanine secured credit facility, under which we may borrow funds up to a maximum principal amount of $75.0 million and $52.5 million, respectively. The LL Funds Loan Agreement also provides us with the option to borrow above the fully committed borrowing capacity, subject to the lender's discretion. Refer to Note 7. Credit Facilities and Other Debt, for further details about the facilities under the LL Funds Loan Agreement.

Since March 2020, we have also been party to a mezzanine loan and security agreement (the "LL Mezz Loan Agreement"), with LL Private Lending Fund II, L.P., which is an affiliate of LL Capital Partners I, L.P. Under the LL Mezz Loan Agreement, we may borrow funds up to a maximum principal amount of $97.5 million. Refer to Note 7. Credit Facilities and Other Debt, for further details about the mezzanine facility under the LL Mezz Loan Agreement.

We paid interest for borrowings under the LL facilities of $9.4 million, $11.7 million and $8.2 million during the years ended December 31, 2022, 2021 and 2020, respectively.

**Use of First American Financial Corporation's Services**

First American Financial Corporation ("First American"), which holds more than 5% of our Class A common stock, through its subsidiaries is a provider of title insurance and settlement services for real estate transactions and a provider of property data services. Additionally, Kenneth DeGiorgio, who is a member of the Company's board of directors, is the chief executive officer of First American. We use First American's services in the ordinary course of our home-buying and home-selling activities. We paid First American $18.1 million, $11.9 million and $7.1 million during the years ended December 31, 2022, 2021 and 2020, respectively, for its services, inclusive of the fees for property data services.

**Private Placement**

On January 31, 2023, the Company entered into a pre-funded warrants subscription agreement with the investors named therein (the "Investors") pursuant to which the Company sold and issued to the Investors an aggregate of 160,742,959 pre-funded warrants to purchase shares of the Company's Class A common stock. The Investors included Brian Bair, Roberto Sella, First American, and Kenneth DeGiorgio. Refer to Note 17. Subsequent Events, for further details.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 85

------

**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

**Warehouse Lending Facility with FirstFunding, Inc.**

During July 2022, Offerpad Mortgage, LLC ("Offerpad Home Loans" or "OPHL"), a wholly owned subsidiary of the Company, entered into a warehouse lending facility with FirstFunding, Inc. ("FirstFunding"), a wholly owned subsidiary of First American, which holds more than 5% of our Class A common stock. Offerpad Home Loans uses the warehouse lending facility to fund mortgage loans it originates and then sells to third-party mortgage servicers. The committed amount under the facility is $15.0 million and OPHL pays certain customary and ordinary course fees to FirstFunding under the facility, including a funding fee per loan and interest. There were no amounts outstanding under the facility as of December 31, 2022 and amounts paid under the facility were immaterial during the year ended December 31, 2022.

**Compensation of Immediate Family Members of Brian Bair**

Offerpad employs two of Brian Bair's brothers, along with Mr. Bair's sister-in-law. The following details the total compensation paid to Mr. Bair's brothers and Mr. Bair's sister-in-law, which includes both base salary and annual performance-based cash incentives during the respective periods:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| ($ in thousands) | **2022** | **2021** | **2020** |
| Mr. Bair's brother 1 | $631 | $572 | $260 |
| Mr. Bair's brother 2 | 594 | 469 | 313 |
| Mr. Bair's sister-in-law | 123 | 141 | 120 |
|  | $1348 | $1182 | $693 |

---

During the year ended December 31, 2022, Mr. Bair's brothers and Mr. Bair's sister-in-law received grants of equity awards under the Offerpad Solutions Inc. 2021 Incentive Award Plan, which included awards of restricted stock units ("RSUs"), performance-based RSUs ("PSUs") and/or stock options, as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Number of <br>RSUs** | **Number of <br>RSUs** | **Number of <br>Target PSUs** | **Number of <br>Target PSUs** | **Number of <br>Stock Options** | **Number of <br>Stock Options** |
| Mr. Bair's brother 1 |  | 84,367 |  | 126,551 |  |  |
| Mr. Bair's brother 2 |  | 79,404 |  | 119,107 |  |  |
| Mr. Bair's sister-in-law |  | 3,000 |  |  |  | 6,000 |
|  |  | 166,771 |  | 245,658 |  | 6,000 |

---

In June 2022, Mr. Bair's brothers each entered into employment agreements with the Company with customary severance and other terms provided to similarly situated executives.

During February 2023, Mr. Bair's brothers and Mr. Bair's sister-in-law each received annual performance-based cash incentive payments, which totaled $0.5 million.

**Note 16. Commitments and Contingencies**

**Homes Purchase Commitments**

As of December 31, 2022, the Company was under contract to purchase 98 homes for an aggregate purchase price of $24.9 million.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 86

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**OFFERPAD SOLUTIONS INC.**

**Notes to Consolidated Financial Statements**

**Other Purchase Obligations**

The Company's other purchase obligations principally include commitments relating to insurance, marketing, information technology and administration services. As of December 31, 2022, the Company had other purchase obligations of $6.5 million, with $5.8 million payable within 12 months.

**Lease Commitments**

The Company has entered into operating lease agreements for its corporate headquarters in Chandler, Arizona and field office facilities in most of the metropolitan markets in which the Company operates in the United States. Refer to Note 5. Leases, for further details.

**Note 17. Subsequent Events**

The Company has determined that there have been no events that have occurred that would require recognition in the consolidated financial statements or additional disclosure herein, except as described below and elsewhere in the notes to the consolidated financial statements.

**Private Placement**

On January 31, 2023, the Company entered into a pre-funded warrants subscription agreement (the "Subscription Agreement") with the investors named therein (the "Investors") pursuant to which the Company sold and issued to the Investors an aggregate of 160,742,959 pre-funded warrants (the "Pre-funded Warrants") to purchase shares (the "Pre-funded Warrant Shares") of the Company's Class A common stock. Each Pre-funded Warrant was sold at a price of $0.5599 per Pre-funded Warrant and has an initial exercise price of $0.0001 per Pre-funded Warrant, subject to certain customary anti-dilution adjustment provisions. The exercise price for the Pre-funded Warrants can be paid in cash or on a cashless basis, and the Pre-funded Warrants have no expiration date. The aggregate gross proceeds to the Company was approximately $90.0 million. The Investors included Brian Bair, Roberto Sella, First American, and Kenneth DeGiorgio.

**Class B Common Stock Conversion**

In January 2023, Brian Bair notified the Company's Board of Directors that he will convert all shares of Class B common stock beneficially owned by him to shares of Class A common stock immediately following the conclusion of the Company's 2023 annual meeting of stockholders.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 87

------

**Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.**

The information required by this Item 9 was previously reported in our Current Report on Form 8-K/A that was filed with the Securities and Exchange Commission on September 7, 2021.

**Item 9A. Controls and Procedures.** 

**Limitations on Effectiveness of Disclosure Controls and Procedures**

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of the disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

**Evaluation of Disclosure Controls and Procedures**

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Annual Report on Form 10-K, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and our principal financial officer have concluded that, as of December 31, 2022, our disclosure controls and procedures were effective at the reasonable assurance level.

**Management's Report on Internal Control over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2022.

The effectiveness of the Company's internal control over financial reporting as of December 31, 2022 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which appears at the end of Part II, Item 9A of this Annual Report on Form 10-K.

**Changes in Internal Control over Financial Reporting**

There were no changes in our internal control over financial reporting, as identified in connection with the evaluation required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that occurred during the three months ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 88

------

**Report of Independent Registered Public Accounting Firm**

To the stockholders and the Board of Directors of Offerpad Solutions Inc.

**Opinion on Internal Control over Financial Reporting**

We have audited the internal control over financial reporting of Offerpad Solutions Inc. and subsidiaries (the "Company") as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2022, of the Company and our report dated February 28, 2023, expressed an unqualified opinion on those financial statements.

**Basis for Opinion** 

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

**Definition and Limitations of Internal Control over Financial Reporting**

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP

Tempe, Arizona

February 28, 2023

Offerpad Solutions Inc. \| 2022 Form 10-K \| 89

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**Item 9B. Other Information.** 

We are reporting the following information in lieu of reporting on a Current Report on Form 8-K under Item 1.01 Entry into a Material Definitive Agreement.

On February 27, 2023, Offerpad SPE Borrower A, LLC, and Offerpad Holdings LLC (collectively, the "Offerpad Parties"), each a wholly owned subsidiary of the Company, and JPMorgan Chase Bank, N.A., AG Mortgage Value Partners Onshore Master Fund, L.P., AG Asset Based Credit Master Fund (B), L.P., AG TCDRS, L.P., AG Centre Street Partnership, L.P. (each, a "Lender") entered into Amendment No. 4 to Loan and Security Agreement and Reaffirmation of Guarantees, dated as of February 27, 2023 ("Amendment No. 4"), which amends that certain Loan and Security Agreement, dated as of September 21, 2021, by and among the Offerpad Parties and the Lenders, as amended by Amendment No. 1, dated as of December 16, 2021, as further amended by Amendment No. 2, dated as of September 21, 2022, as further amended by Amendment No. 3, dated as of December 21, 2022, and as further amended by Amendment No. 4, the "Loan Agreement."

Amendment No. 4, among other things, reduces the borrowing capacity under the Loan Agreement, including reducing the senior facility from $400.0 million to $200.0 million, $100.0 million of which is committed, and reducing the mezzanine facility from $90.0 million to $45.0 million, $22.5 million of which is committed.

The foregoing does not purport to be a complete description of the terms of Amendment No. 4 and such description is qualified in its entirety by reference to Amendment No. 4, a copy of which is filed as Exhibit 10.30 hereto and is incorporated herein by reference.

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.** 

Not applicable.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 90

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**PART III** 

**Item 10. Directors, Executive Officers and Corporate Governance.** 

**Information about our Directors**

The following details certain information about our board of directors as of February 28, 2023:

---

| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Brian Bair | 46 | Chief Executive Officer and Chairman of the Board |
| Katie Curnutte | 43 | Director |
| Kenneth DeGiorgio | 51 | Director |
| Alexander Klabin | 46 | Director |
| Ryan O'Hara | 54 | Director |
| Sheryl Palmer | 61 | Director |
| Roberto Sella | 57 | Director |

---

**Brian Bair** has served as Old Offerpad's Chief Executive Officer since he founded Offerpad in July 2015 with a mission to provide the best way to buy and sell a home, including as the Chief Executive Officer and Chairman of our Board since September 2021. Mr. Bair has had a strong influence in the real estate industry over the past 15 years, having pioneered several successful real estate service models that aim to give sellers and buyers more certainty and control. Prior to founding Offerpad, Mr. Bair served as the founder and president at Bair Group Real Estate from April 2008 to June 2015. Additionally, Mr. Bair co-founded Lexington Financial in March 2011, and served as its managing member from March 2011 to March 2012. He also co-founded Bridgeport Financial Services in May 2008, a company that specialized in acquiring distressed homes, and served as its managing member from May 2008 to May 2011. Mr. Bair has also consulted for national companies on how to acquire, renovate and sell homes. Mr. Bair has also served as an advisory member for the Freddie Mac Housing of Tomorrow Council since January 2020.

We believe that Mr. Bair is qualified to serve as Chairman of our board of directors due to his extensive experience in the real estate industry and his history as Offerpad's founder.

**Katie Curnutte** has served on our board of directors since September 2021. Ms. Curnutte is a founding partner at Kingston Marketing Group ("KMG"), a start-up focused, global marketing and communications firm founded in September 2019. At KMG, she runs communications strategy for notable companies. Before KMG, Ms. Curnutte was senior vice president of communications and public affairs at Zillow from July 2008 to August 2019. Ms. Curnutte also served on the board of directors of Supernova Partners Acquisition Co II, Ltd. from March 2021 until March 2022. Ms. Curnutte graduated from the University of Illinois Urbana-Champaign with a B.S. in Journalism.

We believe Ms. Curnutte is qualified to serve on our board of directors due to her experience in communications, public affairs and scaling technology companies.

**Kenneth DeGiorgio** served as a member of the board of directors for Old OfferPad from February 2019 until September 2021 and on our board of directors since September 2021. Mr. DeGiorgio also serves as chief executive officer of First American Financial Corporation ("FAF"), a public company engaged in title insurance and settlement services, a position he has held since February 2022. Prior to his appointment as CEO, Mr. DeGiorgio served as FAF's president from 2021 to 2022 and its executive vice president, overseeing FAF's international division, trust company and various corporate functions from 2010 to 2021.

We believe Mr. DeGiorgio is qualified to serve on our board of directors due to his extensive real estate and business experience and knowledge of Offerpad's business and operations.

**Alexander M. Klabin** served as a member of Supernova's board of directors from its inception until the closing of the Business Combination in September 2021, and on our board of directors since September 2021. Mr. Klabin is Chairman and CEO of Ancient, an investment holding company based in New York. He serves as executive chairman of Sotheby's Financial Services, a leading art-based lender, and Chairman of Solairus Aviation, the largest private aircraft management company in the United States. Prior to forming Ancient in 2022, Mr. Klabin co-founded Senator Investment Group in 2008 and served as managing partner and co-chief investment officer. Mr. Klabin has served as a member of the board of directors of Supernova Partners Acquisition Co III, Ltd. since its inception in March 2021. Mr. Klabin also served as a member of the board of directors of Supernova Partners Acquisition Co II, Ltd. from March 2021 until March 2022. He is a member of the board of directors of several private companies. Additionally, Mr. Klabin serves as a Trustee of the New York Philharmonic, The Allen-Stevenson School and is a member of the Leadership Council of The Robin Hood Foundation. Mr. Klabin received a B.A. degree in English Literature from Princeton University.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 91

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We believe Mr. Klabin is well qualified to serve on our board of directors due to his significant investment and corporate finance experience.

**Ryan O'Hara** has served on our board of directors since September 2021. Mr. O'Hara has served as Chief Executive Officer of Home Buyers Warranty Group, a leading home warranty company, since July 2022, and as an advisor to Apollo Global Management, a global alternative investment management firm, in the technology and media sectors since January 2020. From June 2019 to December 2019, Mr. O'Hara served as the chief executive officer of Shutterfly, Inc., a public image sharing company, where he also served as a member of the board of directors from June 2019 to October 2019. Prior to Shutterfly, from January 2015 to June 2019, Mr. O'Hara served as the chief executive officer of Move Inc., a real estate listing company, which operates real estate websites including Realtor.com. Mr. O'Hara has also served as a member on the board of directors of REA Group Limited from June 2017 to April 2019. Mr. O'Hara currently serves on two public company boards of directors: Thryv Holdings, Inc., a company specializing in small business management software, and TKB Critical Technologies 1, a special purpose acquisition company. Mr. O'Hara also currently serves on the advisory council for the Stanford University Center on Longevity. Mr. O'Hara holds a B.A. in Economics from Stanford University, an M.B.A. from Harvard Business School and the Director Certificate from Harvard Business School.

We believe Mr. O'Hara is qualified to serve on our board of directors because of his significant knowledge of the technology sector and his experience serving on the board of directors of both public and private companies.

**Sheryl Palmer** has served on our board of directors since September 2021. Ms. Palmer has served as the president, chief executive officer and a member of the board of directors of Taylor Morrison Home Corporation ("Taylor Morrison"), a public national homebuilder and developer, since August 2007. She has also served as Taylor Morrison's chairman of the board of directors since May 2017. Ms. Palmer brings over 30 years of cross-functional building experience to her position, including leadership in land acquisition, sales and marketing, development and operations management. Ms. Palmer previously served as a member of the board of directors and the audit and compensation committees of Interface, Inc., a leading publicly traded global manufacturer of modular carpet, and as a member of the board of directors and executive committee of HomeAid America, a national non-profit that works with the local building industry to build and renovate multi-unit shelters for homeless families. She currently serves as chairman of the board of directors for Building Talent Foundation, and as a member of the executive committee of the Joint Center for Housing Studies at Harvard University.

We believe Ms. Palmer's over 30 years of real estate industry experience and her role as a seasoned public company director make her a valuable member of our board of directors.

**Roberto Sella** served as a member of the board of directors of Old OfferPad from February 2019 until September 2021, and on our board of directors since September 2021. Mr. Sella is the founder of LL Funds, an alternative asset manager and private equity fund, and has served as LL Funds' managing partner since inception in March 2009. Mr. Sella currently serves on the board of directors of several private companies. Mr. Sella received his B.A. in Economics and Mathematics from the University of Wisconsin and M.B.A. from The Wharton School, University of Pennsylvania.

We believe Mr. Sella is qualified to serve on our board of directors because of his extensive investment experience, financial expertise and knowledge of Offerpad's business and operations.

**Information about our Executive Officers**

The following details certain information about our executive officers as of February 28, 2023:

---

| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Brian Bair | 46 | Chief Executive Officer and Chairman of the Board |
| Michael Burnett | 55 | Chief Financial Officer |
| Benjamin Aronovitch | 44 | Chief Legal Officer |

---

The biography for Mr. Bair appears above under the heading "Information About Our Directors."

**Michael Burnett** has served as Offerpad's Chief Financial Officer since October 2019. Previously, Mr. Burnett served as Executive Vice President and Chief Financial Officer at AV Homes, Inc., a national homebuilder and developer, from October 2013 to October 2018. Prior to this, Mr. Burnett served as Group Vice President, Finance, Treasury and Investor Relations for JDA Software Group, Inc., a leading global software provider offering supply chain management solutions, from November 2009 to October 2013. Mr. Burnett holds a B.S. in Accounting from Miami University.

**Benjamin Aronovitch** has served as Offerpad's Chief Legal Officer since October 2020. Previously, Mr. Aronovitch was Vice President and Deputy General Counsel at Taylor Morrison from September 2013 to October 2020. Prior to Taylor Morrison, Mr. Aronovitch was a corporate attorney at Paul, Weiss, Rifkind, Wharton & Garrison LLP from May 2010 to September 2013 and Cravath, Swaine & Moore LLP from October 2006 to May 2010. Mr. Aronovitch holds a B.A. in Political Science and

Offerpad Solutions Inc. \| 2022 Form 10-K \| 92

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Economics from McGill University and law degrees from McGill and Oxford University. He is a member of the New York Bar and is admitted to practice in Arizona.

**Code of Business Conduct and Ethics**

We have a Code of Business Conduct and Ethics that applies to all of our executive officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. A copy of our Code of Business Conduct and Ethics is available on our website, investor.offerpad.com. We intend to make any legally required disclosures regarding amendments to, or waivers of, provisions of our Code of Business Conduct and Ethics on our website rather than by filing a Current Report on Form 8-K.

The remaining information required by this item will be included in the 2023 Proxy Statement and is incorporated herein by reference.

**Item 11. Executive Compensation.** 

The information required by this item will be included in the 2023 Proxy Statement and is incorporated herein by reference.

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.** 

The information required by this item will be included in the 2023 Proxy Statement and is incorporated herein by reference.

**Item 13. Certain Relationships and Related Transactions, and Director Independence.**

The information required by this item will be included in the 2023 Proxy Statement and is incorporated herein by reference.

**Item 14. Principal Accountant Fees and Services.** 

The information required by this item will be included in the 2023 Proxy Statement and is incorporated herein by reference.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 93

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**PART IV** 

**Item 15. Exhibits and Financial Statement Schedules.** 

The following documents are filed as part of this Annual Report on Form 10-K:

(a)(1) The following financial statements are included in Part II, Item 8 of this Annual Report on Form 10-K:

---

| | |
|:---|:---|
| **<u>Index to Financial Statements</u>** | **<u>Page</u>** |
| [<u>Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)</u>](#auditor_report) | 59 |
| [<u>Consolidated Balance Sheets</u>](#balance_sheets) | 61 |
| [<u>Consolidated Statements of Operations</u>](#statements_of_operations) | 62 |
| [<u>Consolidated Statements of Changes in Temporary Equity and Stockholders' Equity (Deficit)</u>](#statements_of_changes_in_equity) | 63 |
| [<u>Consolidated Statements of Cash Flows</u>](#statement_of_cash_flows) | 64 |
| [<u>Notes to Consolidated Financial Statements</u>](#note_to_consolidated_financial_statement) | 65 |

---

(a)(2) Financial statement schedules have been omitted since they either are not required, not applicable, or the information is otherwise included in the consolidated financial statements or the related footnotes.

(a)(3) The following is a list of exhibits filed as part of this Annual Report on Form 10-K

Offerpad Solutions Inc. \| 2022 Form 10-K \| 94

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**Exhibit Index**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** |
| **Exhibit**<br>**Number** | **Exhibit Description** | **Form** | **File No.** | **Exhibit** | **Filing**<br>**Date** |
| 2.1+ | [<u>Agreement and Plan of Merger, dated as of March 17, 2021, by and among the Registrant, Orchids Merger Sub, Inc., Orchids Merger Sub, LLC, and OfferPad, Inc.</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312521244679/d109868ddefm14a.htm#tx109868_44) | 10-Q | 001-39641 | 2.1 | 11/10/21 |
| 3.1 | [<u>Third Restated Certificate of Incorporation of Offerpad Solutions Inc.</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312521266687/d206147dex31.htm) | 8-K/A | 001-39641 | 3.1 | 9/7/21 |
| 3.2 | [<u>Bylaws of Offerpad Solutions Inc.</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312521240631/d109868ds4a.htm#tx109868_46) | S-4 | 333-255079 | 3.4 | 8/9/21 |
| 4.1 | [<u>Warrant Agreement, dated as of October 20, 2020, between the Registrant and Continental Stock Transfer & Trust Company, as warrant agent</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312520275438/d59886dex41.htm) | S-4 | 333-255079 | 4.1 | 8/9/21 |
| 4.2 | [<u>Specimen Class A Common Stock Certificate of Offerpad Solutions Inc.</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312520268513/d19363dex42.htm) | S-4 | 333-255079 | 4.2 | 8/9/21 |
| 4.3 | [<u>Specimen Warrant Certificate</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312520268513/d19363dex44.htm) | S-4 | 333-255079 | 4.4 | 8/9/21 |
| 4.4 | [<u>Form of Pre-Funded Warrant</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312523021670/d450831dex41.htm) | 8-K | 001-39641 | 4.1 | 2/1/23 |
| 4.5 | [<u>Description of Securities</u>](https://www.sec.gov/Archives/edgar/data/1825024/000095017022002999/opad-ex4_4.htm) | 10-K | 001-39641 | 4.4 | 3/7/22 |
| 10.1# | [<u>Form of Indemnity Agreement</u>](https://www.sec.gov/Archives/edgar/data/0001825024/000119312521198739/d109868dex1024.htm) | S-4 | 333-255079 | 10.24 | 8/9/21 |
| 10.2 | [<u>Amended and Restated Registration Rights Agreement, dated September 1, 2021</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312521266687/d206147dex107.htm) | 8-K/A | 001-39641 | 10.7 | 9/7/21 |
| 10.3# | [<u>Offerpad Solutions 2021 Incentive Award Plan</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312521266682/d207874dex1010.htm) | 8-K/A | 001-39641 | 10.10 | 9/7/21 |
| 10.4# | [<u>Offerpad Solutions 2021 Employee Stock Purchase Plan</u>](https://www.sec.gov/Archives/edgar/data/0001825024/000119312521266682/d207874dex1011.htm) | 8-K/A | 001-39641 | 10.11 | 9/7/21 |
| 10.5# | [<u>Amended and Restated OfferPad, Inc. 2016 Stock Option and Grant Plan</u>](https://www.sec.gov/Archives/edgar/data/1825024/000095017022002999/opad-ex10_5.htm) | 10-K | 001-39641 | 10.5 | 3/7/22 |
| 10.6# | [<u>Form of Incentive Stock Option Agreement under the OfferPad, Inc. 2016 Stock Option and Grant Plan</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312521108261/d109868dex1023a.htm) | S-4 | 333-255079 | 10.23(a) | 8/9/21 |
| 10.7# | [<u>Offerpad Solutions Inc. Non-Employee Director Compensation Program</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312521266687/d206147dex1022.htm) | 8-K/A | 001-39641 | 10.22 | 9/7/21 |
| 10.8# | [<u>Offerpad Solutions Inc. Director Deferred Compensation Plan</u>](https://www.sec.gov/Archives/edgar/data/1825024/000095017022002999/opad-ex10_8.htm) | 10-K | 001-39641 | 10.8 | 3/7/22 |
| 10.9# | [<u>Restricted Stock Unit Agreement, dated March 1, 2022, by and between Brian Bair and Offerpad Solutions Inc.</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312522066308/d323163dex102.htm) | 8-K | 001-39641 | 10.2 | 3/4/22<br>|
| 10.10# | [<u>Performance-Based Restricted Stock Unit Agreement, dated March 1, 2022, by and between Brian Bair and Offerpad Solutions Inc.</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312522066308/d323163dex103.htm) | 8-K | 001-39641 | 10.3 | 3/4/22<br>|
| 10.11# | [<u>Form of Restricted Stock Unit Award Agreement (under 2021 Incentive Award Plan)</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312522066308/d323163dex104.htm) | 8-K | 001-39641 | 10.4 | 3/4/22<br>|
| 10.12# | [<u>Form of Performance-Based Restricted Stock Unit Award Agreement (under 2021 Incentive Award Plan)</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312522066308/d323163dex105.htm) | 8-K | 001-39641 | 10.5 | 3/4/22<br>|
| 10.13# | [<u>Form of Director Deferred Cash Fee Restricted Stock Unit Award Agreement (under 2021 Incentive Award Plan)</u>](https://www.sec.gov/Archives/edgar/data/1825024/000095017022007428/opad-ex10_6.htm) | 10-Q | 001-39641 | 10.6 | 5/4/22 |
| 10.14# | [<u>Form of Director Deferred Restricted Stock Unit Award Agreement (under 2021 Incentive Award Plan)</u>](https://www.sec.gov/Archives/edgar/data/1825024/000095017022007428/opad-ex10_7.htm) | 10-Q | 001-39641 | 10.7 | 5/4/22 |
| 10.15# | [<u>Form of Option Award Agreement (under 2021 Incentive Award Plan)</u>](https://www.sec.gov/Archives/edgar/data/1825024/000095017022007428/opad-ex10_8.htm) | 10-Q | 001-39641 | 10.8 | 5/4/22 |
| 10.16# | [<u>Employment Agreement, dated March 1, 2022, by and between Brian Bair and Offerpad Solutions Inc.</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312522066308/d323163dex101.htm) | 8-K | 001-39641 | 10.1 | 3/4/22 |
| 10.17# | [<u>Amended and Restated Employment Agreement, dated as of June 6, 2022, by and between Offerpad Solutions Inc. and Michael Burnett</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312522169305/d337444dex102.htm) | 8-K | 001-39641 | 10.2 | 6/7/22 |
| 10.18# | [<u>Amended and Restated Employment Agreement, dated as of June 6, 2022, by and between Offerpad Solutions Inc. and Benjamin Aronovitch</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312522169305/d337444dex103.htm) | 8-K | 001-39641 | 10.3 | 6/7/22 |
| 10.19+ | [<u>Seventh Amended and Restated Loan and Security Agreement, dated as of December 16, 2022, by and among Offerpad (SVPBORROWER1), LLC, LL Private Lending Fund, L.P., LL Private Lending Fund II, L.P., and LL Funds, LLC</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312522308410/d423080dex101.htm) | 8-K | 001-39641 | 10.1 | 12/22/22 |
| 10.20+ | [<u>Second Amended and Restated Mezzanine Loan and Security Agreement, dated as of December 16, 2021, by and among OP SPE Borrower Parent, LLC, OP SPE PHX1, LLC, OP SPE TPA1, LLC and LL Private Lending Fund II, L.P.</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312521362389/d273854dex103.htm) | 8-K | 001-39641 | 10.3 | 12/20/21 |
| 10.21 | [<u>Amendment No. 1 to Second Amended and Restated Mezzanine Loan and Security Agreement, dated as of July 7, 2022, by and among OP SPE Borrower Parent, LLC, OP SPE PHX1, LLC, OP SPE TPA1, LLC and LL Private Lending Fund II, L.P.</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312522190520/d364377dex101.htm) | 8-K | 001-39641 | 10.1 | 7/8/22 |

---

Offerpad Solutions Inc. \| 2022 Form 10-K \| 95

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---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| 10.22+ | [<u>Third Amended and Restated Master Loan and Security Agreement, dated as of June 7, 2022, by and among Citibank, N.A., OP SPE Borrower Parent, LLC, OP SPE PHX1, LLC, OP SPE TPA1, LLC and Wells Fargo Bank, N.A.</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312522169305/d337444dex101.htm) | 8-K | 001-39641 | 10.1 | 6/7/22 |
| 10.23\* | [<u>Amendment No. 1 dated December 8, 2022 to the Third Amended and Restated Master Loan and Security Agreement dated as of June 7, 2022, by and among Citibank, N.A., OP SPE Borrower Parent, LLC, OP SPE PHX1, LLC, OP SPE TPA1, LLC and Wells Fargo Bank, N.A.</u>](opad-ex10_23.htm) |  |  |  |  |
| 10.24+ | [<u>Credit Agreement, dated as of June 30, 2021, by and between OfferPad, Inc. and First American Title Insurance Company</u>](https://www.sec.gov/Archives/edgar/data/0001825024/000119312521240631/d109868dex1032.htm) | S-4 | 333-255079 | 10.32 | 8/9/21 |
| 10.25 | [<u>Amendment No. 1, dated August 12, 2021, to the Credit Agreement dated as of June 30, 2021, by and between OfferPad, Inc. and First American Title Insurance Company.</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312521266687/d206147dex1024a.htm) | 8-K/A | 001-39641 | 10.24(a) | 9/7/21 |
| 10.26+ | [<u>Loan and Security Agreement, dated September 10, 2021, among JPMorgan Chase Bank, N.A., as Administrative Agent, the lenders party thereto, Offerpad SPE Borrower A, LLC, as initial borrower, and Wells Fargo Bank, National Association, as Paying Agent and Calculation Agent</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312521274026/d166917dex101.htm) | 8-K | 001-39641 | 10.1 | 9/15/21 |
| 10.27+ | [<u>Amendment No. 1 dated December 16, 2021, to the Loan and Security Agreement, dated September 10, 2021, among JPMorgan Chase Bank, N.A., as Administrative Agent, the lenders party thereto, Offerpad SPE Borrower A, LLC, as initial borrower, and Wells Fargo Bank, National Association, as Paying Agent and Calculation Agent</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312521362389/d273854dex101.htm) | 8-K | 001-39641 | 10.1 | 12/20/21 |
| 10.28+ | [<u>Amendment No. 2 dated September 21, 2022, to the Loan and Security Agreement, dated September 10, 2021, among JPMorgan Chase Bank, N.A., as Administrative Agent, the lenders party thereto, Offerpad SPE Borrower A, LLC, as initial borrower, and Wells Fargo Bank, National Association, as Paying Agent and Calculation Agent</u>](https://www.sec.gov/Archives/edgar/data/1825024/000095017022021307/opad-ex10_2.htm) | 10-Q | 001-39641 | 10.2 | 11/2/22 |
| 10.29\*+ | [<u>Amendment No. 3 dated December 21, 2022, to the Loan and Security Agreement, dated September 10, 2021, among JPMorgan Chase Bank, N.A., as Administrative Agent, the lenders party thereto, Offerpad SPE Borrower A, LLC, as initial borrower, and Wells Fargo Bank, National Association, as Paying Agent and Calculation Agent</u>](opad-ex10_29.htm) |  |  |  |  |
| 10.30\*+ | [<u>Amendment No. 4 dated February 27, 2023, to the Loan and Security Agreement, dated September 10, 2021, among JPMorgan Chase Bank, N.A., as Administrative Agent, the lenders party thereto, Offerpad SPE Borrower A, LLC, as initial borrower, and Wells Fargo Bank, National Association, as Paying Agent and Calculation Agent</u>](opad-ex10_30.htm) |  |  |  |  |
| 10.31 | [<u>Pre-Funded Warrants Subscription Agreement, dated January 31, 2023, by and among Offerpad Solutions Inc. and the purchasers named therein</u>](https://www.sec.gov/Archives/edgar/data/1825024/000119312523021670/d450831dex101.htm) | 8-K | 001-39641 | 10.1 | 2/1/23 |
| 21.1\* | [<u>List of Subsidiaries</u>](opad-ex21_1.htm) |  |  |  |  |
| 23.1\* | [<u>Consent of Deloitte & Touche LLP</u>](opad-ex23_1.htm) |  |  |  |  |
| 31.1\* | [<u>Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)</u>](opad-ex31_1.htm) |  |  |  |  |
| 31.2\* | [<u>Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)</u>](opad-ex31_2.htm) |  |  |  |  |
| 32.1\*\* | [<u>Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350</u>](opad-ex32_1.htm) |  |  |  |  |
| 32.2\*\* | [<u>Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350</u>](opad-ex32_2.htm) |  |  |  |  |
| 101.INS\* | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |  |  |  |  |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document |  |  |  |  |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |  |  |  |  |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |  |  |  |  |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |  |  |  |  |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |  |  |  |  |
| 104\* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |  |  |  |  |

---

------

\* Filed herewith.

\*\* Furnished herewith.

# Indicates management contract or compensatory plan.

+ Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished to the SEC upon request.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 96

------

**Item 16. Form 10-K Summary.**

None.

Offerpad Solutions Inc. \| 2022 Form 10-K \| 97

------

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **OFFERPAD SOLUTIONS INC.** | **OFFERPAD SOLUTIONS INC.** |
| Date: February 28, 2023 | By: | /s/ Brian Bair |
|  |  | **Brian Bair** |
|  |  | **Chief Executive Officer and** <br>**Chairman of the Board**<br>**(Principal Executive Officer)** |
| Date: February 28, 2023 | By: | /s/ Michael Burnett |
|  |  | **Michael Burnett** |
|  |  | **Chief Financial Officer**<br>**(Principal Financial Officer and** <br>**Principal Accounting Officer)** |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and in the dates indicated.

---

| | | |
|:---|:---|:---|
| **SIGNATURE** | **TITLE** | **DATE** |
| /s/ Brian Bair | Chief Executive Officer and | February 28, 2023 |
| Brian Bair | Chairman of the Board<br>(Principal Executive Officer) |  |
| /s/ Michael Burnett | Chief Financial Officer | February 28, 2023 |
| Michael Burnett | (Principal Financial Officer and Principal Accounting Officer) |  |
| /s/ Katie Curnutte | Director | February 28, 2023 |
| Katie Curnutte |  |  |
| /s/ Kenneth DeGiorgio | Director | February 28, 2023 |
| Kenneth DeGiorgio |  |  |
| /s/ Alexander Klabin | Director | February 28, 2023 |
| Alexander Klabin |  |  |
| /s/ Ryan O'Hara | Director | February 28, 2023 |
| Ryan O'Hara |  |  |
| /s/ Sheryl Palmer | Director | February 28, 2023 |
| Sheryl Palmer |  |  |
| /s/ Roberto Sella | Director | February 28, 2023 |
| Roberto Sella |  |  |

---

Offerpad Solutions Inc. \| 2022 Form 10-K \| 98

------

## Ex-10

**EXECUTION VERSION**

AMENDMENT NUMBER ONE

to the

THIRD AMENDED AND RESTATED MASTER LOAN AND SECURITY AGREEMENT

Dated as of June 7, 2022,

among

OP SPE BORROWER PARENT, LLC,

OP SPE PHX1, LLC,

OP SPE TPA1, LLC,

WELLS FARGO BANK, N.A.

and

CITIBANK, N.A.

This AMENDMENT NUMBER ONE (this "<u>Amendment Number One</u>") is made this 8th day of December, 2022 (the "<u>Amendment Effective Date</u>"), among OP SPE BORROWER PARENT, LLC ("<u>Parent Borrower</u>"), OP SPE PHX1, LLC and OP SPE TPA1, LLC; (each, a "<u>Borrower</u>" and collectively with Parent Borrower, "<u>Borrowers</u>") and CITIBANK, N.A. ("<u>Lender</u>"), and acknowledged by WELLS FARGO BANK, N.A. ("<u>Calculation Agent</u>" and "<u>Paying Agent</u>"), to the Third Amended and Restated Master Loan and Security Agreement, dated as of June 7, 2022, among Borrowers, Lender and Calculation Agent and Paying Agent (as may be amended, restated, supplemented or otherwise modified from time to time, the "<u>Loan Agreement</u>"). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Loan Agreement.

<u>RECITALS</u>

WHEREAS, Borrowers and Lender have agreed to amend the Loan Agreement as more specifically set forth herein; and

WHEREAS, as of the date hereof, Borrowers represent to Lender that the Relevant Parties are in full compliance with all of the terms and conditions of the Loan Agreement and each other Loan Document and no Default or Event of Default has occurred and is continuing under the Loan Agreement or any other Loan Document.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and for the mutual covenants herein contained, the parties hereto hereby agree as follows:

Section 1.<u>Amendments</u>. Effective as of the Amendment Effective Date, the Loan Agreement is hereby amended as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Section 1.01</u> of the Loan Agreement is hereby amended by deleting the definition of "<u>Loan Documents</u>" in its entirety and replacing it with the following:

"<u>Loan Documents</u>" shall mean collectively, this Loan Agreement, the Note, the Guaranty, the Diligence Agent Agreement, each Asset Management Agreement, each Assignment of Asset Management Agreement, each Mezzanine Financing Intercreditor Agreement (if applicable), the Pricing Side Letter, the Collection Account Control Agreement, the Concentration Account Control Agreement, each Pledge Agreement, the PRES License Agreement, the PRES Side Letter, and each other agreement entered into by a Borrower, on the one hand, and Lender and/or any of its Affiliates or Subsidiaries on the other, and all other Governing Documents related to each Borrower and

122708120\V-4

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Parent SPE, and the executed Power of Attorney in the form of <u>Exhibit I</u> for each Borrower, in connection herewith or therewith, in each case as such agreement may be amended and in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Section 1.01</u> of the Loan Agreement is hereby amended by adding the following new definition of "<u>Required Reserve Amount</u>" in the appropriate alphabetical order:

"<u>Required Reserve Amount</u>" shall mean, as of any date of determination, with respect to Properties that have been subject to Advances for greater than 180 days following the applicable Funding Date, (i) during the period beginning on the Amendment No. 1 Effective Date through (and including) March 31, 2023, an amount equal to six (6) months of interest due under this Loan Agreement with respect to each such Property, based on the amount of the Advances outstanding on such day and (ii) at all other times, an amount equal to three (3) months of interest due under this Loan Agreement with respect to each such Property, based on the amount of the Advances outstanding on such day. At all times, the Collection Account shall contain funds in an amount equal to the Required Reserve Amount, and such funds shall be held for the benefit of Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Section 3.03(i)</u> of the Loan Agreement is hereby amended by deleting such Section in its entirety and replacing it with the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) For federal income tax purposes (i) the Collection Account will be owned by OP SPE Borrower Parent, LLC (the "<u>Account Owner</u>"). The Account Owner shall provide Wells Fargo, in its capacity as Paying Agent with (i) an IRS Form W-9 or appropriate IRS Form W-8 by the Effective Date, and (ii) any additional IRS forms (or updated versions of any previously submitted IRS forms) or other documentation at such time or times required by applicable law or upon the reasonable request of Wells Fargo as may be necessary (a) to reduce or eliminate the imposition of U.S. withholding taxes to the Account Owner and (b) to permit Wells Fargo to fulfill its tax reporting obligations under applicable law with respect to the Collection Account, or any amounts paid to the Account Owner. If any IRS form or other documentation previously delivered by an Account Owner becomes obsolete or inaccurate in any respect (including without limitation in connection with the transfer of any beneficial ownership interest in Borrower), the Account Owner shall timely provide to Wells Fargo in its capacity as Paying Agent accurately updated and complete versions of such IRS forms or other documentation. Wells Fargo, both in its individual capacity and in its capacity as Paying Agent, shall have no liability to the Account Owner or any other person in connection with any tax withholding amounts paid or withheld from the Collection Account pursuant to applicable law arising from the Account Owner's failure to timely provide an accurate, correct and complete IRS Form W-9, an appropriate IRS Form W-8 or such other documentation contemplated under this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Section 3.05(b)</u> of the Loan Agreement is hereby amended by deleting such Section in its entirety and replacing it with the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To the extent that no Default or Event of Default has occurred and is continuing, the Paying Agent shall on each Payment Date, Funding Date and Repayment Date (in accordance with the Payment Date Report as approved by the Lender in accordance with <u>Section 3.05(d)</u> below), apply such Income on deposit in the Collection Account in the following order of priority:

<u>first</u>, to Paying Agent, for the account of the appropriate Agent or Diligence Agent, as applicable, any regularly scheduled fees, expenses, and any Calculation Agent Indemnity Amounts and Paying Agent Indemnity Amounts due and owing to the Agents

122708120\V-4

------

or Diligence Agent, as applicable (including, without limitation, the Calculation Agent Fee, the Paying Agent Fee and the Diligence Agent Fee);

<u>second</u>, to pay to Paying Agent, for the account of Lender an amount equal to any fees (other than any Commitment Fee), expenses and indemnity amounts due to Lender;

<u>third</u>, only if such date is a Payment Date, to pay to Paying Agent, for the account of Lender an amount equal to the amount of any Commitment Fee for such period and any accrued and unpaid interest on the Loans for the Interest Period then ending;

<u>fourth</u>, to pay Paying Agent, for the account of Lender an amount equal to reduce the outstanding Advances with respect to any Properties that have been sold or transferred to zero;

<u>fifth</u>, to pay to Paying Agent, for the account of Lender an amount sufficient to eliminate any Borrowing Base Deficiency;

<u>sixth</u>, to pay to Paying Agent, for the account of Lender and held in the Collection Account an amount necessary to fully satisfy the Required Reserve Amount;

<u>seventh</u>, to pay to Asset Manager an amount equal to the Asset Management Fees and permitted expenses then due and owing to Asset Manager in accordance with the Loan Documents; and

<u>eighth</u>, 100% of the remaining amount less the Required Reserve Amount shall be paid to or at the direction of Borrowers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Clause (iii) of Section 4.01(b)</u> of the Loan Agreement are hereby amended by deleting such clause in its entirety and replacing it with the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Concentration Account, the Collection Account and all Income relating to the Pledged Equity or the Contributed Properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Section 5.02(t)</u> of the Loan Agreement is hereby amended by deleting such Section in its entirety and replacing it with the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) The Required Reserve Amount is maintained in the Collection Account;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)<u>Section 7.16</u> of the Loan Agreement is hereby amended by deleting such Section in its entirety and replacing it with the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.16 <u>Financial Covenants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrowers shall comply with the financial covenants set forth in <u>Section 3(a)</u> of the Pricing Side Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrowers shall maintain the Required Reserve Amount in the Collection Account at all times.

Section 2.<u>Effectiveness</u>. This Amendment Number One shall become effective as of the date that Lender shall have received:

122708120\V-4

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)counterparts of this Amendment Number One duly executed by each of the parties hereto; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)counterparts of that certain Amendment Number One to the Third Amended and Restated Pricing Side Letter, dated as of the date hereof, duly executed by each of the parties thereto.

Section 3.<u>Fees and Expenses</u>. Borrowers jointly and severally agree to pay to Lender all reasonable out of pocket costs and expenses incurred by Lender in connection with this Amendment Number One (including all reasonable fees and out of pocket costs and expenses of Lender's legal counsel) in accordance with Section 14.03 of the Loan Agreement.

Section 4.<u>Representations</u>. Borrowers hereby represent to Lender that as of the date hereof, the Relevant Parties are in full compliance with all of the terms and conditions of the Loan Agreement and each other Loan Document and no Default or Event of Default has occurred and is continuing under the Loan Agreement or any other Loan Document.

Section 5.<u>Binding Effect; Governing Law</u>. This Amendment Number One shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. THIS AMENDMENT NUMBER ONE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (EXCEPT FOR SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH SHALL GOVERN).

Section 6.<u>Counterparts</u>. This Amendment Number One may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. The parties agree this Amendment Number One, any documents to be delivered pursuant to this Amendment Number One and any notices hereunder may be transmitted between them by e-mail and/or by facsimile. The parties intend that faxed signatures and electronically imaged signatures such as .pdf files and signatures executed using third party electronic signature capture service providers, which comply with the Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act or any other similar state law based on the Uniform Electronic Transactions Act, shall constitute original signatures and are binding on all parties. The original documents shall be promptly delivered, if requested.

Section 7.<u>Limited Effect</u>. Except as amended hereby, the Loan Agreement shall continue in full force and effect in accordance with its terms. Reference to this Amendment Number One need not be made in the Loan Agreement or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to, or with respect to, the Loan Agreement, any reference in any of such items to the Loan Agreement being sufficient to refer to the Loan Agreement as amended hereby.

[Signature Page Follows]

122708120\V-4

------

IN WITNESS WHEREOF, Borrowers and Lender have caused this Amendment Number One to be executed and delivered by their duly authorized officers as of the Amendment Effective Date.

**OP SPE BORROWER PARENT, LLC,**

as Parent Borrower

By: <u>/s/ Michael S. Burnett</u> <br>Name: Michael S. Burnett<br>Title: Chief Financial Officer

**[Amendment Number One to Third A&R MLSA (Citi-Offerpad) (2022)]**

------

**OP SPE PHX1, LLC**

as a Borrower

By: <u>/s/ Michael S. Burnett</u> <br>Name: Michael S. Burnett<br>Title: Chief Financial Officer

**[Amendment Number One to Third A&R MLSA (Citi-Offerpad) (2022)]**

------

**OP SPE TPA1, LLC**

as a Borrower

By: <u>/s/ Michael S. Burnett</u> <br>Name: Michael S. Burnett<br>Title: Chief Financial Officer

**[Amendment Number One to Third A&R MLSA (Citi-Offerpad) (2022)]**

------

**CITIBANK, N.A.,**

as Lender

By: <u>/s/ Arunthathi Theivakumaran</u> <br>Name: Arunthathi Theivakumaran<br>Title: Vice President

**[Amendment Number One to Third A&R MLSA (Citi-Offerpad) (2022)]**

------

Acknowledged as of the date first above written:

**WELLS FARGO BANK, N.A.**, as Calculation Agent and Paying Agent

By: Computershare Trust Company, N.A., as Agent

By: <u>/s/ Arunthathi Theivakumaran</u> 

Name: Jessica Wuomos

Title: Vice President

**[Amendment Number One to Third A&R MLSA (Citi-Offerpad) (2022)]**

------

## Ex-10

**EXECUTION VERSION**

**AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT AND REAFFIRMATION OF GUARANTEES**

Amendment No. 3 to Loan and Security Agreement, Waiver, and Reaffirmation of Guarantees dated as of December 21, 2022 (this "<u>Amendment</u>"), among OFFERPAD SPE BORROWER A, LLC, as borrower ("<u>Borrower</u>"), OFFERPAD SPE BORROWER A, LLC, as

borrower representative ("<u>Borrower Representative</u>"), OFFERPAD SPE BORROWER A HOLDINGS, LLC, as pledgor and guarantor ("<u>Pledgor</u>"), OFFERPAD HOLDINGS LLC, as limited guarantor ("<u>Guarantor</u>"), JPMORGAN CHASE BANK, N.A., as a lender, AG MORTGAGE VALUE PARTNERS ONSHORE MASTER FUND, L.P., as a lender, AG ASSET BASED CREDIT MASTER FUND (B), L.P., as a lender, AG TCDRS, L.P., as a lender, AG CENTRE STREET PARTNERSHIP, L.P., as a lender and JPMORGAN CHASE BANK,

N.A., in its capacity as administrative agent acting for and on behalf of Lenders ("<u>Administrative</u> <u>Agent</u>").

<u>RECITALS</u>

Borrower, Borrower Representative, Lenders and Administrative Agent are parties to that certain Loan and Security Agreement, dated as of September 10, 2021 (as amended by Amendment No. 1 to Loan and Security Agreement, dated as of December 16, 2021, as further amended by Amendment No. 2 to Loan and Security Agreement, dated as of September 21, 2022, the "<u>Existing Loan Agreement</u>", as further amended by this Amendment, the "<u>Loan Agreement</u>"). Pledgor is a party to that certain Guaranty Agreement, dated as of September 10, 2021, made in favor of Administrative Agent (the "<u>Guaranty Agreement</u>"). Guarantor is a party to that certain Limited Guaranty, dated as of September 10, 2021, made in favor of Administrative Agent (the "<u>Limited Guaranty</u>"). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Loan Agreement.

Borrower, Borrower Representative, Pledgor, Guarantor, Lenders and Administrative Agent have agreed, subject to the terms and conditions of this Amendment, that the Existing Loan Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Loan Agreement.

Accordingly, Borrower, Borrower Representative, Pledgor, Guarantor, Lenders and Administrative Agent hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Loan Agreement is hereby amended as follows:

SECTION 1. <u>Amendments to Existing Loan Agreement</u>. Effective as of the date hereof, the Existing Loan Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double- underlined text (indicated textually in the same manner as the following example: <u>double-</u> <u>underlined text</u>) as set forth in the pages attached as Exhibit I-A hereto. A conformed copy of the Loan Agreement marked to show such changes is attached as Exhibit I-B hereto.

SECTION 2. <u>Conditions Precedent</u>. This Amendment shall become effective as of the date hereof, upon the execution and delivery to Administrative Agent and Lenders of (i) this

------

Amendment by Borrower, Borrower Representative, Pledgor, Guarantor, Administrative Agent and Lenders and (ii) that certain Second Amended and Restated Side Letter dated as of the date hereof made among Administrative Agent, Lenders, Borrower and Borrower Representative.

SECTION 3. <u>Limited Effect</u>. Except as expressly amended and modified by this Amendment, the Existing Loan Agreement, the Guaranty Agreement and the Limited Guaranty shall continue to be, and shall remain, in full force and effect in accordance with their terms. The parties hereto have entered into this Amendment solely to amend the terms of the Existing Loan Agreement and do not intend this Amendment or the transactions contemplated hereby to be, and this Amendment and the transactions contemplated hereby shall not be construed to be, a novation of any of the obligations owing by Borrower, Pledgor, Guarantor or any other party under or in connection with the Existing Loan Agreement, the Guaranty Agreement, the Limited Guaranty or any of the other Facility Documents. It is the intention and agreement of each of the parties hereto that (i) the perfection and priority of all security interests securing the payment of the obligations of the parties under the Existing Loan Agreement, the Guaranty Agreement and the Limited Guaranty are preserved, (ii) the liens and security interests granted under the Existing Loan Agreement continue in full force and effect, and (iii) any reference to the Existing Loan Agreement in any Facility Document shall be deemed to reference the Existing Loan Agreement as amended by this Amendment. The execution of this Amendment by Administrative Agent does not operate as a waiver of any of its rights, powers, or privileges under the Loan Agreement, the Guaranty Agreement, the Limited Guaranty or under any of the other Facility Documents (including, without limitation, any other occurrences under the Loan Agreement that would commence a Default).

SECTION 4. <u>Ratification and Reaffirmation of Guarantees</u>. Pledgor and Guarantor each hereby ratifies and reaffirms the terms and conditions of the Guaranty Agreement and the Limited Guaranty, as applicable. Pledgor's and Guarantor's obligations, liabilities, covenants, and guaranties pursuant to the Guaranty Agreement and the Limited Guaranty, whether for payment, performance, or otherwise, are now and shall remain valid and binding obligations of Pledgor and Guarantor, as applicable, and both before and after giving effect to the Amendment, will remain, now and hereafter, in full force and effect, unmodified and enforceable against Pledgor and Guarantor in accordance with their terms. Pledgor and Guarantor each acknowledges and agrees that this ratification and reaffirmation is given to induce Administrative Agent and Lenders to provide their consent to this Amendment. Absent execution and delivery of this Amendment by Pledgor and Guarantor, Administrative Agent would not have provided such consent to this Amendment.

SECTION 5. <u>Severability</u>. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

SECTION 6. <u>Counterparts</u>. This Amendment may be executed by each of the parties hereto by means of (i) an original manual signature; (ii) a faxed, scanned, or photocopied manual signature, or (iii) any other electronic signature (including, but not limited to, DocuSign) permitted by the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, and/or any other relevant electronic signatures law, including any relevant provisions of the Uniform Commercial Code (collectively, "Signature Law"), in each case to the extent applicable. Each faxed, scanned, or photocopied manual signature, or electronic signature, shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Each party hereto shall be entitled to conclusively rely upon, and shall have no liability with respect to, any faxed, scanned, or

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photocopied manual signature, or other electronic signature, of any other party and shall have no duty to investigate, confirm of otherwise verify the validity or authenticity thereof. This Amendment may be executed in one or more counterparts and by the different parties hereto on separate counterparts, including without limitation counterparts transmitted by facsimile or other electronic transmission, each of which, when so executed, shall be deemed to be an original and such counterparts, together, shall constitute one and the same agreement. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile.

**SECTION 7. <u>GOVERNING LAW</u>. THIS AMENDMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH SHALL GOVERN.**

SECTION 8. <u>Headings.</u> The headings of this Amendment are provided solely for convenience of reference and shall not modify, define, expand or limit any of the terms or provisions of this Amendment.

SECTION 9. <u>Consent</u>. By countersigning this Amendment, Lenders, constituting all of the Lenders under the Loan Agreement, hereby consent to this Amendment. In addition, by countersigning this Amendment, each of Paying Agent and Calculation Agent hereby consents to this Amendment.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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**IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed as of the date first above written.**

<u>ADMINISTRATIVE AGENT:</u>

**JPMORGAN CHASE BANK, N.A.**

By: <u>/s/ Mackenzie Smith</u> <u>_</u>

Name: Mackenzie Smith

Title: Vice President

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<u>LENDER</u>:

**JPMORGAN CHASE BANK, N.A.**

By: <u>/s/ Mackenzie Smith</u> <u>_</u>

Name: Mackenzie Smith

Title: Vice President

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<u>LENDER:</u>

**AG Mortgage Value Partners Onshore Master Fund, L.P.**

By: Angelo, Gordon & Co., L.P., as manager or advisor

By: <u>/s/ Thomas Durkin</u> <u>_</u>

Name: Thomas Durkin

Title: Authorized Person

**AG Asset Based Credit Master Fund (B), L.P.**

By: Angelo, Gordon & Co., L.P., as manager or advisor

By: <u>/s/ Thomas Durkin</u> <u>_</u>

Name: Thomas Durkin

Title: Authorized Person

**AG TCDRS, L.P.**

By: Angelo, Gordon & Co., L.P., as manager or advisor

By: <u>/s/ Thomas Durkin</u> <u>_</u>

Name: Thomas Durkin

Title: Authorized Person

**AG Centre Street Partnership, L.P.**

By: Angelo, Gordon & Co., L.P., as manager or advisor

By: <u>/s/ Thomas Durkin</u> <u>_</u>

Name: Thomas Durkin

Title: Authorized Person

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<u>BORROWER</u>**:**

**OFFERPAD SPE BORROWER A, LLC,**

as a Borrower

By: <u>/s/ Michael S. Burnett</u> <u>_</u>

Name: Michael S. Burnett

Title: Chief Financial Officer

By: <u>/s/ Benjamin Aronovitch</u> <u>_</u>

Name: Benjamin Aronovitch

Title: Chief Legal Officer

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<u>BORROWER REPRESENTATIVE:</u>

**OFFERPAD SPE BORROWER A, LLC,**

By: <u>/s/ Michael S. Burnett</u> <u>_</u>

Name: Michael S. Burnett

Title: Chief Financial Officer

By: <u>/s/ Benjamin Aronovitch</u> <u>_</u>

Name: Benjamin Aronovitch

Title: Chief Legal Officer

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<u>PLEDGOR AND GUARANTOR:</u>

**OFFERPAD SPE BORROWER A HOLDINGS, LLC,** as Pledgor

By: <u>/s/ Michael S. Burnett</u> <u>_</u>

Name: Michael S. Burnett

Title: Chief Financial Officer

By: <u>/s/ Benjamin Aronovitch</u> <u>_</u>

Name: Benjamin Aronovitch

Title: Chief Legal Officer

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<u>LIMITED GUARANTOR:</u>

**OFFERPAD HOLDINGS LLC,** as Guarantor

By: <u>/s/ Michael S. Burnett</u> <u>_</u>

Name: Michael S. Burnett

Title: Chief Financial Officer

By: <u>/s/ Benjamin Aronovitch</u> <u>_</u>

Name: Benjamin Aronovitch

Title: Chief Legal Officer

------

**Exhibit I-B**

**<u>Loan and Security Agreement</u> (Conformed Through Amendment No. 3)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(Attached)**

------

**EXECUTION VERSION**

**Conformed through: Amendment No. 1 dated as of December 16, 2021**

**Amendment No. 2 dated as of September 21, 2022 <u>Amendment No. 3 dated as of December 21, 2022</u>**

**LOAN AND SECURITY AGREEMENT**

among

**JPMORGAN CHASE BANK, N.A.**,

as Administrative Agent

**JPMORGAN CHASE BANK, N.A., AG MORTGAGE VALUE PARTNERS ONSHORE MASTER FUND, L.P. AG ASSET BASED CREDIT MASTER FUND (B), L.P.**

**AG TCDRS, L.P.**

**AG CENTRE STREET PARTNERSHIP, L.P., AND THE PERSONS FROM TIME TO TIME PARTY HERETO AS LENDERS**,

each a Lender

**OFFERPAD SPE BORROWER A, LLC**,

as Initial Borrower

such other Delaware limited liability companies that may, from time to time, become a Borrower hereunder

and

**WELLS FARGO BANK, NATIONAL ASSOCIATION**,

as Paying Agent and Calculation Agent Dated as of September 10, 2021

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**Table of Contents**

---

| | | |
|:---|:---|:---|
|  |  | Page |
| &nbsp;&nbsp;&nbsp;Section 1. | Definitions | 1 |
| &nbsp;&nbsp;&nbsp;Section 2. | Facility | 34 |
| &nbsp;&nbsp;&nbsp;Section 3. | Payment of Facility Interest  | 47<u>48</u> |
| &nbsp;&nbsp;&nbsp;Section 4. | Income Payments | 48 |
| &nbsp;&nbsp;&nbsp;Section 5. | Requirements of Law | 52<u>53</u> |
| &nbsp;&nbsp;&nbsp;Section 6. | Taxes  | 53<u>54</u> |
| &nbsp;&nbsp;&nbsp;Section 7. | Security Interest; Administrative Agent's Appointment as<br>Attorney-in-Fact | <br>58<u>59</u> |
| &nbsp;&nbsp;&nbsp;Section 8. | Payment, Transfer And Custody | 60<u>61</u> |
| &nbsp;&nbsp;&nbsp;Section 9. | Authorizations  | 60<u>61</u> |
| &nbsp;&nbsp;&nbsp;Section 10. | Fees | 60<u>61</u> |
| &nbsp;&nbsp;&nbsp;Section 11. | Representations  | 61<u>62</u> |
| &nbsp;&nbsp;&nbsp;Section 12. | Covenants of Borrower  | 68<u>69</u> |
| &nbsp;&nbsp;&nbsp;Section 13. | Events of Default  | 79<u>80</u> |
| &nbsp;&nbsp;&nbsp;Section 14. | Remedies  | 82<u>83</u> |
| &nbsp;&nbsp;&nbsp;Section 15. | Indemnification and Expenses | 87 |
| &nbsp;&nbsp;&nbsp;Section 16. | Property Management | 88<u>89</u> |
| &nbsp;&nbsp;&nbsp;Section 17. | Paying Agent; Calculation Agent | 90<u>91</u> |
| &nbsp;&nbsp;&nbsp;Section 18. | Assignability  | 102<u>103</u> |
| &nbsp;&nbsp;&nbsp;Section 19. | Transfer Register | 103<u>104</u> |
| &nbsp;&nbsp;&nbsp;Section 20. | Tax Treatment  | 103<u>104</u> |
| &nbsp;&nbsp;&nbsp;Section 21. | Set-Off  | 103<u>104</u> |
| &nbsp;&nbsp;&nbsp;Section 22. | Survival  | 104<u>105</u> |
| &nbsp;&nbsp;&nbsp;Section 23. | Notices and Other Communications  | 104<u>105</u> |
| &nbsp;&nbsp;&nbsp;Section 24. | Entire Agreement; Severability; Single Agreement | 104<u>105</u> |
| &nbsp;&nbsp;&nbsp;Section 25. | GOVERNING LAW  | 105<u>106</u> |
| &nbsp;&nbsp;&nbsp;Section 26. | SUBMISSION TO JURISDICTION; WAIVERS  | 105<u>106</u> |
| &nbsp;&nbsp;&nbsp;Section 27. | No Waivers, etc | 106<u>107</u> |
| &nbsp;&nbsp;&nbsp;Section 28. | Cross-Default; Cross-Collateralization; Waiver of Marshalling of Assets  | 106<u>107</u> |
| &nbsp;&nbsp;&nbsp;Section 29. | Confidentiality  | 107<u>108</u> |

---

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---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;Section 30. | Conflicts | 108<u>109</u> |
| &nbsp;&nbsp;&nbsp;Section 31. | Miscellaneous | 109 |
| &nbsp;&nbsp;&nbsp;Section 32. | Amendments and Waivers | 110 |
| &nbsp;&nbsp;&nbsp;Section 33. | Administrative Agent Provisions  | 111<u>112</u> |
| &nbsp;&nbsp;&nbsp;Section 34. | Joint and Several Liability  | 115<u>116</u> |
| &nbsp;&nbsp;&nbsp;Section 35. | General Interpretive Principles | 116 |

---

<u>SCHEDULES</u>

SCHEDULE 1 AUTHORIZED REPRESENTATIVES

SCHEDULE 2 BORROWER'S ORGANIZATIONAL IDENTIFICATION NUMBER SCHEDULE 3 PROPERTY DOCUMENTS

SCHEDULE 4 INSURANCE REQUIREMENTS SCHEDULE 5 CALCULATIONS SCHEDULE

SCHEDULE 6 DISCLOSURE OF MATERIAL ADVERSE EFFECT

<u>EXHIBITS</u>

EXHIBIT A FORM OF ADVANCE REQUEST

EXHIBIT B FORM OF ASSET SCHEDULE

EXHIBIT C FORM OF SECTION 6 CERTIFICATE

EXHIBIT D FORM OF PROPERTY MANAGEMENT REPORT EXHIBIT E FORM OF BORROWER POWER OF ATTORNEY EXHIBIT F FORM OF BORROWER JOINDER AGREEMENT EXHIBIT G FORM OF REVIEWER CERTIFICATION

EXHIBIT H FORM OF COMPLIANCE CERTIFICATE

EXHIBIT I-1 FORM OF CLASS A PROMISSORY NOTE

EXHIBIT I-2 FORM OF CLASS B PROMISSORY NOTE

ii

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**LOAN AND SECURITY AGREEMENT**

This is a LOAN AND SECURITY AGREEMENT, dated as of September 10, 2021, among OFFERPAD SPE BORROWER A, LLC, a Delaware limited liability company (the "<u>Initial Borrower</u>") and each other Delaware limited liability company that may be subsequently added as a party to this Agreement under a Joinder Agreement (individually, each a "<u>Borrower</u>" and collectively "<u>Borrowers</u>"), OFFERPAD SPE BORROWER A, LLC as borrower representative ("<u>Borrower Representative</u>") JPMORGAN CHASE BANK, N.A., as lender, AG MORTGAGE VALUE PARTNERS ONSHORE MASTER FUND, L.P., as lender, AG TCDRS, L.P., as lender, AG CENTRE STREET PARTNERSHIP, L.P., as lender, AG ASSET BASED CREDIT MASTER FUND (B), L.P., as lender and the persons from time to time party hereto as lenders (each, a "<u>Lender</u>" and collectively, "<u>Lenders</u>"), JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent acting for and on behalf of Lenders ("<u>Administrative Agent</u>") and WELLS FARGO BANK, NATIONAL ASSOCIATION, as paying agent (in such capacity, "<u>Paying Agent</u>") and calculation agent (in such capacity, "<u>Calculation Agent</u>").

PRELIMINARY STATEMENTS

The Initial Borrower has requested that Lenders make advances, upon the request of Borrower Representative on behalf of a Borrower, to such Borrower for the acquisition of certain Eligible SF Properties (as defined in this Agreement) and which Eligible SF Properties shall be pledged to Administrative Agent to secure such advances.

The Initial Borrower has requested OFFERPAD SPE BORROWER A, LLC to act as the representative of the Borrowers hereunder and OFFERPAD SPE BORROWER A, LLC is willing to act as the representative of each Borrower.

Lenders are willing to extend such credit on the terms and subject to the conditions set forth herein.

Section 1. <u>Definitions</u>. As used herein, the following terms shall have the following meanings."<u>ABR</u>", when used in reference to any Advance, refers to whether such Advance, bears interest at a rate determined by reference to the Alternate Base Rate.

"<u>Accelerated Repayment Date</u>" shall have the meaning set forth in <u>Section 14(a)(i)</u>

hereof.

"<u>Account Bank</u>" shall mean Wells Fargo Bank, National Association, in its capacity as

account bank with respect to the Operating Account.

"<u>Account Owner</u>" shall have the meaning set forth in <u>Section 6(i)</u> hereof.

"<u>Acquisition Date</u>" shall mean, with respect to any Financed SF Property, the date on which such Financed SF Property was purchased or acquired by Borrower, as set forth in the final settlement statement with respect to such Financed SF Property.

"<u>Acquisition Parameters</u>" shall mean, with respect to any SF Property, the acquisition parameters set forth on <u>Schedule 3</u> to the Side Letter, as such acquisition parameters may be updated from time to time by Borrowers and approved by Administrative Agent in its sole discretion.

"<u>Additional Borrower</u>" shall have the meaning set forth in <u>Section 2(d)(vii)</u> hereof. There may not be more than three (3) Borrowers at any time.

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"<u>Adjusted Daily Simple SOFR</u>" shall mean an interest rate per annum equal to (a) the Daily Simple SOFR, plus (b) 0.10%; provided that if Adjusted Daily Simple SOFR as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

"<u>Adjusted Term SOFR Rate</u>" shall mean, for any Pricing Period, an interest rate per annum equal to (a) the Term SOFR Rate for such Pricing Period, plus (b) 0.10% ; provided that if the Adjusted Term SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

"<u>Administrative Agent</u>" shall mean JPMorgan Chase Bank, N.A., in its capacity as administrative agent for and on behalf of Lenders, together with its successors and assigns.

"<u>Administrative Agent Fee</u>" shall have the meaning ascribed to such term in the Side

Letter.

"<u>Advance</u>" shall have the meaning set forth in <u>Section 2(e)(i)</u> hereof.

"<u>Advance Amount</u>" shall mean with respect to Class A Advances, the Class A Advance Amount and, with respect to Class B Advances, the Class B Advance Amount.

"<u>Advance Reduction</u>" or "<u>Advance Reductions</u>" shall have the meaning set forth in <u>Section 2(h)(ii)</u> hereof.

"<u>Advance Request</u>" shall mean a request from Borrower Representative to Administrative Agent for Lenders to make an Advance to one or more specified Borrowers in the form attached hereto as <u>Exhibit A</u>.

"<u>Advances Outstanding</u>" shall mean, of any date of determination, (a) with respect to the Class A Advances, the aggregate outstanding principal balance of all outstanding Class A Advances as of such date, and (b) with respect to the Class B Advances, the aggregate outstanding principal balance of all outstanding Class B Advances as of such date.

"<u>Affiliate</u>" shall mean, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (together with the correlative meanings of "controlled by" and "under common control with") shall mean possession, directly or indirectly, of the power (a) to vote fifty percent (50%) or more of the securities (on a fully diluted basis) having ordinary voting power for the directors or managing general partners (or their equivalent) of such Person, or (b) to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.

"<u>Aggregate Advance Amount</u>" shall mean, as of any date, (a) with respect to the Class A Advances, the sum of the Class A Advance Amounts for all Financed SF Properties and (b) with respect to the Class B Advances, the sum of the Class B Advance Amounts for all Financed SF Properties

"<u>Aggregate Repayment Amount</u>" shall mean, as of any date, the sum of the then-outstanding Repayment Amounts in respect of all Advances.

"<u>Agreement</u>" shall mean this Loan and Security Agreement among Administrative Agent, Lenders, Borrower Representative, Borrowers, Calculation Agent and Paying Agent, dated as of the date hereof, as the same may be amended, supplemented or otherwise modified in accordance

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with the terms hereof.

"<u>Alternate Base Rate</u>" shall mean, for any day, a rate per annum equal to the NYFRB Rate in effect on such day plus ½ of 1%. For the avoidance of doubt, if the Alternate Base Rate as determined pursuant to the foregoing would be less than 1%, such rate shall be deemed to be 1% for purposes of this Agreement.

"<u>Anti-Corruption Laws</u>" shall mean the U.S. Foreign Corrupt Practices Act or any other law applicable to Borrower or any of its Affiliates that prohibits, inter alia, the bribery of foreign officials to gain a business advantage.

"<u>Anti-Money Laundering Laws</u>" shall mean applicable laws or regulations in any jurisdiction in which Borrower is located or doing business that relate to money laundering, any predicate crime to money laundering or any financial record keeping and reporting requirements related thereto.

"<u>Applicable Rate</u>" shall mean the Class A Applicable Rate and the Class B Applicable Rate, as applicable.

"<u>Appraisal</u>" shall mean a valuation report obtained by Administrative Agent stating the Original Appraised Value or Updated Property Value, as applicable, of an SF Property, prepared in accordance with the requirements of Title XI of FIRREA, which includes only an exterior inspection of such SF Property.

"<u>Asset Management Agreements</u>" shall mean those certain asset management agreements, each by and between the Asset Manager and the applicable Borrower, as the same may be amended from time to time.

"<u>Asset Manager</u>" shall mean, initially, OFFERPAD, LLC, an Arizona limited liability company.

"<u>Asset Manager Event of Default</u>" shall mean the occurrence (and during the continuance in the case of clause (a)) of any of the following: (a) any Event of Default, (b) any Insolvency Event with respect to Asset Manager, or (c) any failure of Asset Manager to perform its material duties under the Asset Management Agreement that constitutes a default thereunder and that remains uncured for a period longer than five (5) Business Days.

"<u>Asset Purchase Price</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Asset Schedule</u>" shall mean, with respect to any Advance as of any date, an asset schedule in the form of a computer tape or other electronic medium generated by the related Borrower and delivered to Administrative Agent and Calculation Agent, which provides information relating to the Financed SF Properties and the proposed Eligible SF Properties in a format containing the fields specified on <u>Exhibit B</u>.

"<u>Assigned Documents</u>" shall have the meaning set forth in <u>Section 7(a)(i)</u> hereof.

"<u>Assignment and Acceptance</u>" shall have the meaning set forth in <u>Section 18(a)</u> hereof.

"<u>Assignment and Subordination Agreements</u>" shall mean those certain Assignment of

Management Agreements, each among Administrative Agent, the applicable Borrower and Asset Manager, as any such agreement may be amended, restated, supplemented or otherwise modified from time to time and which shall at all times provide, among other things, that Administrative Agent may terminate Asset Manager upon the occurrence of an Asset Manager Event of Default.

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"<u>Authorized Representative</u>" shall mean, for the purposes of this Agreement only, a Responsible Officer of Borrowers or Administrative Agent, as applicable under this Agreement, listed on <u>Schedule 1</u> hereto, as such <u>Schedule 1</u> may be amended from time to time upon fifteen

&nbsp;&nbsp;&nbsp;&nbsp;(15) days' prior written notice.

"<u>Average Facility Usage</u>" shall mean for any specified period, an amount equal to (i) the sum of the Advances Outstanding on each day during such period divided by (ii) the number of days during such period.

"<u>Back-Up Manager</u>" shall mean Radian Real Estate Management, LLC or such other back-up manager as selected by the Administrative Agent, in each case, together with its successors in such capacity.

"<u>Benchmark</u>" shall mean, with respect to (i) each Pricing Period through and including the Pricing Period ending September 30, 2022, 2.564% and (ii) each Pricing Period subsequent to the Pricing Period ending September 30, 2022, initially, Adjusted Daily Simple SOFR; provided that if a Benchmark Transition Event, and the related Benchmark Replacement Date have occurred with respect to the Daily Simple SOFR or the then-current Benchmark, then "Benchmark" means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to <u>Section 4(f)</u>.

"<u>Benchmark Replacement</u>" shall mean:

the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the replacement for the then-current Benchmark giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for dollar-denominated syndicated credit facilities at such time in the United States and (b) the related Benchmark Replacement Adjustment;

If the Benchmark Replacement as determined pursuant to the above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

"<u>Benchmark Replacement Adjustment</u>" shall mean, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Pricing Period for any setting of such Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for

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dollar-denominated syndicated credit facilities at such time.

"<u>Benchmark Replacement Conforming Changes</u>" shall mean, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of "Alternate Base Rate," the definition of "Business Day," the definition of "U.S. Government Securities Business Day," the definition of "Pricing Period," timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent reasonably determines is appropriate to reflect the adoption and implementation of such Benchmark and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent reasonably determines that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent reasonably determines that no market practice for the administration of such Benchmark exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

"<u>Benchmark Replacement Date</u>" shall mean, with respect to any Benchmark, the earliest to occur of the following events with respect to such then-current Benchmark:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)in the case of clause (1) or (2) of the definition of "Benchmark Transition Event," the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide such Benchmark (or such component thereof); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)in the case of clause (3) of the definition of "Benchmark Transition Event," the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if such Benchmark (or such component thereof) continues to be provided on such date.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the "Benchmark Replacement Date" will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to such Benchmark (or the published component used in the calculation thereof).

"<u>Benchmark Transition Event</u>" shall mean, with respect to any Benchmark, the occurrence of one or more of the following events with respect to such then-current Benchmark:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark (or such component thereof);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, the CME Term SOFR Administrator, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), in each case, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark (or such component thereof); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative.

For the avoidance of doubt, a "Benchmark Transition Event" will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set

forth above has occurred with respect to such Benchmark (or the published component used in the calculation thereof).

"<u>Benchmark Unavailability Period</u>" shall mean, with respect to any Benchmark, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with <u>Section 4(f)</u> ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with <u>Section 4(f)</u>.

"<u>Borrower</u>" or "<u>Borrowers</u>" shall have the meaning set forth in the preamble and shall include each other Eligible Borrower that becomes party hereto as an Additional Borrower pursuant to a Joinder Agreement on a joint and several basis.

"<u>Borrower Confidential Information</u>" shall mean all written or computer-readable information (including any financial and/or proprietary information) provided to any Lender or to Administrative Agent hereunder or in connection herewith by any Borrower Party, Guarantor or any Affiliate thereof.

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"<u>Borrower Parties</u>" shall mean any or all of Borrowers and Pledgor, as applicable.

"<u>Borrower-Related Party</u>" shall mean each of the Borrower Parties, Guarantor, and their

respective Affiliates.

"<u>Borrower Representative</u>" shall have the meaning set forth in the introductory paragraph.

"<u>Borrowing Base Calculation Date</u>" shall mean the second (2nd) Business Day of each week or such other day as is mutually agreed to in writing by Borrower Representative and Administrative Agent.

"<u>Borrowing Base Deficiency</u>" shall mean on any date of determination, the sum of the Class A Borrowing Base Deficiency and the Class B Borrowing Base Deficiency, in each case, if any, existing on such date of determination.

"<u>Business Day</u>" shall mean, any day (other than a Saturday or a Sunday) on which banks are open for business in New York City, the State of California and the State of Maryland; provided that, in addition to the foregoing, a Business Day shall be (a) in relation to RFR Loans and any interest rate settings, fundings, disbursements, settlements or payments of any such RFR Loan, or any other dealings of such RFR Loan and (b) in relation to Advances referencing the Adjusted Term SOFR Rate and any interest rate settings, fundings, disbursements, settlements or payments of any such Advances referencing the Adjusted Term SOFR Rate or any other dealings of such Advances referencing the Adjusted Term SOFR Rate, any such day that is only a U.S. Government Securities Business Day.

"<u>CA Parties</u>" shall have the meaning set forth in <u>Section 17(b)(iv)</u> hereof.

"<u>Calculation Agent</u>" shall mean Wells Fargo Bank, National Association, or any replacement designated pursuant to <u>Section 17(b)</u>. Wells Fargo Bank, National Association will perform its duties as Calculation Agent hereunder through its Corporate Trust Services division.

"<u>Calculation Agent Fee</u>" shall have the meaning ascribed to such term in the Side Letter. "<u>Calculations</u>" shall have the meaning set forth in <u>Section 17(b)(i)(A)</u> hereof.

"<u>Capital Stock</u>" shall mean, as to any Person, any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent equity ownership interests in a Person which is not a corporation, including any and all member, partnership or other equivalent interests in any limited liability company, limited partnership, trust, and any and all warrants or options to purchase any of the foregoing, including all rights to participate in the operation or management of such Person and all rights to such Person's properties, assets, interests and distributions under the related organizational documents in respect of such Person. "Capital Stock" also includes (i) all accounts receivable arising out of the related organizational documents of such Person; (ii) all general intangibles arising out of the related organizational documents of such Person; and (iii) to the extent not otherwise included, all proceeds of any and all of the foregoing (including within proceeds, whether or not otherwise included therein, any and all contractual rights under any revenue sharing or similar agreement to receive all or any portion of the revenues or profits of such Person).

"<u>Change in Control</u>" shall mean with respect to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any Borrower, except as permitted by the Facility Documents, any event, transaction or occurrence as a result of which Pledgor shall cease to (i) Control and (ii) own and control all of the economic and voting rights associated with ownership of 100% of the Capital Stock of,

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any of the Borrowers, (b) Pledgor, any event, transaction or occurrence as a result of which Guarantor shall cease to (i) Control and (ii) own and control all of the economic and voting rights associated with ownership of 100% of the Capital Stock of, Pledgor or (c) Guarantor, (i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause such person or group shall be deemed to have "beneficial ownership" of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of Capital Stock of the Guarantor representing more than 50% of the total outstanding Capital Stock of the Guarantor, (ii) occupation of a majority of the seats on the board of directors (or similar governing body) of Guarantor by persons who were not (A) the incumbent board of directors, (B) nominated or approved by the board of directors of Guarantor or (C) appointed by directors so nominated or approved or (iii) any transfer of all or substantially all of Guarantor's assets (determined on a consolidated basis and excluding internal reorganizations), provided however that the provisions of clause (c) shall not apply to the Supernova SPAC Transaction consummated by the Guarantor.

"<u>Class</u>" shall mean each class of advances hereunder, designated as the Class A Advances or the Class B Advances, as applicable.

"<u>Class A Advance</u>" shall mean each advance of funds by a Class A Lender to the Borrowers under Section 2(a<u>) or 2(b</u>).

"<u>Class A Advance Amount</u>" shall have the meaning ascribed to such term in the Side

Letter.

"<u>Class A Advances Outstanding</u>" shall mean the Outstanding Advance Amount of Class

A Advances.

"<u>Class A Applicable Rate</u>" shall mean, as of any date, the Class A Interest Rate or, upon notice of Administrative Agent, if an Event of Default has occurred and is continuing, the Default Rate.

"<u>Class A Borrowing Base Deficiency</u>" shall mean, on any date of determination, the positive excess, if any, of (a) the Class A Advances Outstanding as of such date, over (b) the sum of (i) all amounts on deposit in the Concentration Account as of such date, (ii) all amounts on deposit in the Collection Account (exclusive of the Interest Reserve Amount) as of such date and (iii) the Aggregate Advance Amount in respect of the Class A.

"<u>Class A Commitment</u>" shall mean the commitment of a Class A Lender to fund any Class A Advance and "Class A Commitments" shall mean such commitments of all Class A Lenders in the aggregate. The amount of each Class A Lender's Commitment is set forth on <u>Schedule 1</u> to the Side Letter, as such amount may be modified in accordance with the terms hereof or in the applicable Assignment and Assumption to which any Class A Lender becomes a party.

"<u>Class A Committed Facility Amount</u>" shall mean as of any date of determination, the Class A Commitments.

"<u>Class A Facility Interest</u>" shall mean, for any Pricing Period, the sum of the products, for each day of such Pricing Period, of (i) the Class A Advances Outstanding on such day, <u>multiplied by</u> (ii) the Class A Applicable Rate <u>multiplied by</u> (iii) 1/360.

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"<u>Class A Interest Rate</u>" shall have the meaning ascribed to such term in the Side Letter. "<u>Class A Interest Reserve Amount</u>" shall mean, as of any date of determination, an

amount equal to the product of (i) the Class A Average Facility Usage for the immediately preceding calendar month (or, if the period from the Closing Date to the date of determination is less than a month, such period from the Closing Date to the last day of the calendar month preceding such date of determination) multiplied by (ii) the Class A Applicable Rate multiplied by (iii) 1/12; <u>provided</u> that if any portion of the Class A Interest Reserve Amount is applied by Administrative Agent pursuant to <u>Section 2(e)(viii)</u> or <u>Section 4(c)</u>, Borrowers shall have until the immediately following Remittance Date to increase the amount of funds in the Collection Account to the extent necessary such that amounts remaining in the Collection Account after application of all requisite payments on such following Remittance Date is at least equal to the Class A Interest Reserve Amount.

"<u>Class A Lender</u>" shall mean each Person listed on the signature pages hereto as a Class A Lender, and each other Person that may from time to time become party hereto as a Class A Lender or to any Assignment and Assumption in the capacity of a Class A Lender.

"<u>Class A Lender Commitment Percentage</u>" shall mean, for any Class A Lender, the percentage equivalent of a fraction (expressed out to five decimal places), (A) the numerator of which is the Class A Commitment of such Class A Lender and (B) the denominator of which is the aggregate Class A Commitment of all Class A Lenders.

"<u>Class A Note</u>" shall mean the promissory note for Class A Advances in the form attached hereto as <u>Exhibit I-1</u>, and any promissory note delivered in substitution or exchange therefor, in each case as the same shall be amended, restated, modified and supplemented and in effect from time to time.

"<u>Class A Pricing Margin</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Class A Unused Fee</u>" shall have the meaning set forth in <u>Section 10</u> hereof.

"<u>Class A Unused Fee Rate</u>" shall have the meaning ascribed to such term in the Side Letter

"<u>Class A Upfront Fee</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Class B Advance</u>" shall mean each advance of funds by a Class B Lender to the Borrowers under Section 2(a<u>) or 2(b</u>).

"<u>Class B Advance Amount</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Class B Advances Outstanding</u>" shall mean the Outstanding Advance Amount of Class B Advances.

"<u>Class B Applicable Rate</u>" shall mean, as of any date, the Class B Interest Rate or, upon notice of Administrative Agent, if an Event of Default has occurred and is continuing, the Default Rate.

"<u>Class B Borrowing Base Deficiency</u>" shall mean, on any date of determination, the positive excess, if any, of (a) the Class B Advances Outstanding as of such date, over (b) the sum of (i) all amounts on deposit in the Concentration Account as of such date, (ii) all amounts on

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deposit in the Collection Account (exclusive of the Interest Reserve Amount) as of such date and (iii) the Aggregate Advance Amount.

"<u>Class B Commitment</u>" shall mean the commitment of a Class B Lender to fund any Class B Advance and "Class B Commitments" shall mean such commitments of all Class B Lenders in the aggregate. The amount of each Class B Lender's Commitment is set forth on <u>Schedule 1</u> to the Side Letter, as such amount may be modified in accordance with the terms hereof or in the applicable Assignment and Assumption to which any Class B Lender becomes a party.

"<u>Class B Committed Facility Amount</u>" shall mean as of any date of determination, the Class B Commitments.

"<u>Class B Facility Interest</u>" shall mean, for any Pricing Period, the sum of the products, for each day of such Pricing Period, of (i) the Class B Advances Outstanding on such day, <u>multiplied</u> <u>by</u> (ii) the Class B Applicable Rate <u>multiplied by</u> (iii) 1/360.

"<u>Class B Interest Reserve Amount</u>" shall mean, as of any date of determination, an amount equal to the product of (i) the Class B Average Facility Usage for the immediately preceding calendar month (or, if the period from the Closing Date to the date of determination is less than a month, such period from the Closing Date to the last day of the calendar month preceding such date of determination) multiplied by (ii) the Class B Applicable Rate multiplied by (iii) 1/12; <u>provided</u> that if any portion of the Class B Interest Reserve Amount is applied by Administrative Agent pursuant to <u>Section 2(e)(viii)</u> or <u>Section 4(c)</u>, Borrowers shall have until the immediately following Remittance Date to increase the amount of funds in the Collection Account to the extent necessary such that amounts remaining in the Collection Account after application of all requisite payments on such following Remittance Date is at least equal to the Class B Interest Reserve Amount.

"<u>Class B Interest Rate</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Class B Lender</u>" shall mean each Person listed on the signature pages hereto as a Class

B Lender, and each other Person that may from time to time become party hereto as a Class B Lender or to any Assignment and Assumption in the capacity of a Class B Lender.

"<u>Class B Lender Commitment Percentage</u>" shall mean, for any Class B Lender, the percentage equivalent of a fraction (expressed out to five decimal places), (A) the numerator of which is the Class B Commitment of such Class B Lender and (B) the denominator of which is the aggregate Class B Commitment of all Class B Lenders.

"<u>Class B Note</u>" shall mean the promissory note for Class B Advances in the form attached hereto as <u>Exhibit I-2</u>, and any promissory note delivered in substitution or exchange therefor, in each case as the same shall be amended, restated, modified and supplemented and in effect from time to time.

<u>Class B Unused Fee</u>" shall have the meaning set forth in <u>Section 10</u> hereof.

"<u>Class B Unused Fee Rate</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Class B Upfront Fee</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Closing Date</u>" shall mean September 10, 2021.

"<u>CME Term SOFR Administrator</u>" shall mean CME Group Benchmark Administration

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Limited as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator).

"<u>Code</u>" shall mean the Internal Revenue Code of 1986, as amended from time to time.

"<u>Collateral</u>" shall have the meaning set forth in <u>Section 7(a)</u> hereof.

"<u>Collection Account</u>" shall mean the segregated account established and maintained, or caused to be established and maintained, by Paying Agent for the benefit of Administrative Agent, and entitled "92424600, Collection Account - Wells Fargo Bank, National Association, as Paying Agent, JPMorgan Chase Bank, N.A., as secured party" or such other account established or caused to be established by the Paying Agent (or any successor) as may be designated in writing from time to time by the Paying Agent and, if such account is not established at Wells Fargo, then at a bank mutually agreed upon, in writing, by the Administrative Agent and the Borrower. The Collection Account shall be subject to the Collection Account Control Agreement and funds on deposit therein shall remain uninvested.

"<u>Collection Account Control Agreement</u>" shall mean the account control agreement dated on or prior to the date hereof, among Borrowers, Administrative Agent and Paying Agent, which shall provide for Administrative Agent control over the Collection Account and shall be in form and substance acceptable to Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.

"<u>Commitments</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Committed Facility Amount</u>" shall have the meaning ascribed to such term in the Side

Letter.

"<u>Concentration Account</u>" shall mean the segregated account established by OFFERPAD

SPE BORROWER A, LLC at the Concentration Account Bank, into which Income will be deposited as required by <u>Section 4(a)</u>, and which shall be subject to the Concentration Account Control Agreement.

"<u>Concentration Account Bank</u>" shall mean Wells Fargo Bank, National Association, in its capacity as bank with respect to the Concentration Account.

"<u>Concentration Account Control Agreement</u>" shall mean the account control agreement dated on or about the date hereof, among OFFERPAD SPE BORROWER A, LLC, Administrative Agent and Concentration Account Bank, which shall provide for Administrative Agent control over the Concentration Account and shall be in form and substance acceptable to Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.

"<u>Concentration Limit</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Concentration Limit Advance Reduction</u>" or "<u>Concentration Limit Advance</u> <u>Reductions</u>" shall have the meaning set forth in <u>Section 2(h)(iii)</u> hereof.

"<u>Confidential Information</u>" shall have the meaning set forth in <u>Section 29(b)</u> hereof.

"<u>Confidential Terms</u>" shall mean all written or computer-readable information regarding

any pricing terms set forth in any Facility Document.

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"<u>Connection Income Taxes</u>" shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

"<u>Contractual Obligation</u>" shall mean, with respect to any Person, any provision of any securities issued by such Person or any indenture, mortgage, deed of trust, deed to secure debt, contract, undertaking, agreement, instrument or other document to which such Person is a party or by which it or any of its property or assets are bound or are subject.

"<u>Control</u>" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise, and the terms "Controls," "Controlling" and "Controlled" shall have meanings correlative thereto.

"<u>Convertible Notes</u>" shall mean any convertible promissory notes that are mandatorily convertible into equity.

"<u>Costs</u>" shall have the meaning set forth in <u>Section 15(a)</u> hereof.

"<u>CSA</u>" shall mean a Combined Statistical Area as determined by the U.S. Office of Management and Budget.

"<u>Daily Simple SOFR</u>" shall mean, for any day (a "<u>SOFR Rate Day</u>"), a rate per annum equal SOFR for the day (such day "<u>SOFR Determination Date</u>") that is five (5) U.S. Government Securities Business Day prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator's Website. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrower.

"<u>Deed</u>" shall mean, with respect to an SF Property, the instrument or document required by the law of the jurisdiction in which the SF Property is located to convey fee title.

"<u>Default</u>" shall mean an event that, with notice or lapse of time or both, would become an Event of Default.

"<u>Default Rate</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Defaulting Lender</u>" shall have the meaning set forth in <u>Section 2(m)</u> hereof.

"<u>Diligence Agent</u>" shall mean Radian Real Estate Management, LLC, together with its successors in such capacity or such other entity as mutually agreed between Administrative Agent and Borrower Representative.

"<u>Diligence Agent Agreement</u>" shall mean the Services Agreement and Work Order, dated as of September 10, 2021, by and between the Diligence Agent and Borrower Representative.

"<u>Diligence Agent Deficiency Notice</u>" shall mean with respect to any Advance Request or Property Documents, a report setting forth any Diligence Deficiency identified therein by the Diligence Agent.

"<u>Diligence Deficiency</u>" shall mean with respect to any Advance Request or Property Documents, (i) the failure of one or more documents required to be contained therein to be fully

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executed or to match in all material respects the information on the related Asset Schedule, (ii) one or more documents contained therein are mutilated, damaged, torn or otherwise physically altered or unreadable, (iii) the absence from a Property Documents of any document required to be contained therein, (iv) the applicable SF Property is not an Eligible SF Property, (v) the requirements for the related Evaluation have not been satisfied, or (vi) any other material deficiency exists with respect to the applicable SF Property, Advance Request or Property Documents.

"<u>Disclosing Party</u>" shall have the meaning set forth in <u>Section 29(a)</u> hereof.

"<u>Dollars</u>" and "<u>$</u>" shall mean lawful money of the United States of America.

"<u>Early Amortization Event</u>" shall have the meaning ascribed to such term in the Side

Letter.

"<u>Early Amortization Event Repayment Period</u>" shall have the meaning ascribed to such

term in the Side Letter.

"<u>Early Amortization Trigger</u>" shall have the meaning ascribed to such term in the Side

Letter.

"<u>Eligible Borrower</u>" shall mean any Delaware limited liability company that is a Special

Purpose Entity whose Capital Stock is one hundred percent (100%) owned by Pledgor, all of which Capital Stock has been validly pledged and delivered to Administrative Agent in compliance with the Pledge Agreement.

"<u>Eligible SF Property</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Environmental Law</u>" shall mean any applicable federal, state, regional or local law, statute, rule, code, regulation, ordinance, permit, license or legally binding judicial or administrative decision, requirement or order relating to the manufacture, transport, use, handling, labeling, treatment, storage, recycling, disposal, release or threatened release, or remediation or removal of, or exposure to or injury caused by, Hazardous Materials or the protection of human health or safety (to the extent related to exposure to Hazardous Materials), or the environment (including air, surface or subsurface land and waters and natural resources), in each case as amended from time to time), including the Comprehensive Environmental Response, Compensation and Liability Act ("<u>CERCLA</u>"), 42 U.S.C. § 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act ("<u>RCRA</u>"), 42 U.S.C. § 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et seq. and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. (to the extent applicable to exposure to Hazardous Materials); and any applicable state and local or foreign analogues, counterparts or equivalents.

"<u>Environmental Liens</u>" shall have the meaning set forth in <u>Section 12(ee)</u> hereof.

"<u>ERISA</u>" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor thereto, and the regulations promulgated and rulings issued

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thereunder.

"<u>ERISA Affiliate</u>" shall mean any Person which, together with any Borrower is treated, as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer described in Section 414(m) or (o) of the Code.

"<u>Evaluation</u>" shall mean an opinion of a licensed real estate agent or broker, prepared in accordance with the requirements of Title XI of FIRREA, as to the fair market value of an SF Property given by the Valuation Agent, in each case in form reasonably acceptable to Administrative Agent, and performed in conformity with customary and usual business practices, which generally includes three (3) comparable sales and three (3) comparable listings and includes only an exterior inspection of such SF Property.

"<u>Event of Default</u>" shall have the meaning set forth in <u>Section 13</u> hereof.

"<u>Event of ERISA Termination</u>" shall mean (i) with respect to any Plan, a Reportable Event, or (ii) the withdrawal of any Borrower or any ERISA Affiliate thereof from a Plan during a plan year in which it is a substantial employer, as defined in Section 4001(a)(2) of ERISA, or

&nbsp;&nbsp;&nbsp;&nbsp;(iii) the failure by any Borrower or any ERISA Affiliate thereof to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA with respect to any Plan, including the failure to make on or before its due date a required installment under Section 430(j) of the Code or Section 303(j) of ERISA, or (iv) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by any Borrower or any ERISA Affiliate thereof to terminate any Plan other than a standard termination under Section 4041(b) of ERISA, or (v) the failure to meet the requirements of Section 436 of the Code resulting in the loss of qualified status under Section 401(a)(29) of the Code, or (vi) the institution by the PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or (vii) the receipt by any Borrower or any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action of the type described in the previous clause (vi) has been taken by the PBGC with respect to such Multiemployer Plan, or (viii) any event or circumstance exists which may reasonably be expected to constitute grounds for any Borrower or any ERISA Affiliate thereof to incur material liability under Title IV of ERISA (other than PBGC premiums) or under Sections 412(b) or 430(k) of the Code with respect to any Plan.

"<u>Excluded Taxes</u>" shall have the meaning set forth in <u>Section 6(a)</u> hereof.

"<u>Exculpated Party</u>" shall mean any direct or indirect principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of any Borrower or any legal representatives, successors or assigns of any of the foregoing.

"<u>Extended Stay Agreement</u>" shall mean an agreement executed by the Borrower in conjunction with the purchase of an SF Property which allows for a former homeowner to extend their stay in such SF Property for a limited period of time following the Borrower's acquisition of such SF Property, not to exceed 90 days.

"<u>Facility Documents</u>" shall mean this Agreement, each Advance Request, each Asset Management Agreement, each Assignment and Subordination Agreement, the Guaranty, the Limited Guaranty, the Pledge Agreement, the Mortgage Documents, each Joinder Agreement, the Powers of Attorney, the Collection Account Control Agreement, the Concentration Account Control Agreement, the Operating Account Control Agreement, each Purchase Agreement, each

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SPE Agreement, each Subcontractor Agreement, each Diligence Agent Agreement, any collateral assignments now or hereafter delivered by any Borrower or Borrower Representative, on behalf of any Borrower, to Administrative Agent for the benefit of Lenders, including financing statements and Fixture Filings filed or recorded in connection therewith, and any and all other documents and agreements executed and delivered by a Borrower Party or Guarantor in connection with this Agreement or any Advances hereunder.

"<u>Facility Interest</u>" shall mean the Class A Facility Interest and the Class B Facility Interest, as applicable

"<u>Facility Termination Date</u>" shall mean the earlier of (i) the Maturity Date, and (ii) any Accelerated Repayment Date.

"<u>FATCA</u>" shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

"<u>Federal Funds Effective Rate</u>" shall mean, for any day, the rate calculated by the NYFRB based on such day's federal funds transactions by depositary institutions, as determined in such manner as shall be set forth on the NYFRB's Website from time to time, and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate; provided that if the Federal Funds Effective Rate as so determined would be less than 1%, such rate shall be deemed to be 1% for the purposes of this Agreement.

"<u>Federal Reserve Board</u>" shall mean the Board of Governors of the Federal Reserve System of the United States of America.

"<u>Financed SF Property</u>" shall mean the individual or collective reference to the SF Properties with respect to which any Outstanding Advance Amount exists.

"<u>Financial Covenants</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Financial Statements</u>" shall mean the consolidated financial statements of Guarantor

prepared in accordance with GAAP for the year or other period then ended. Such financial statements will be audited, in the case of annual statements, by nationally recognized independent certified public accountants reasonably approved by Administrative Agent.

"<u>FIRREA</u>" shall mean the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended and in effect from time to time.

"<u>Fixture Filing</u>" shall mean, with respect to any jurisdiction in which any Financed SF Property is located in which a separate, stand-alone fixture filing is required or generally recorded or filed pursuant to the local law or custom (as reasonably determined by Administrative Agent), a Uniform Commercial Code financing statement (or other form of financing statement required in the jurisdiction in which the applicable Financed SF Property or Financed SF Properties are located) recorded or filed in the real estate records in which the applicable Financed SF Property or Properties, as applicable, are located. Where permitted in applicable jurisdictions (as reasonably determined by Administrative Agent), such Fixture Filing may cover multiple SF

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Properties; <u>provided</u>, that separate Fixture Filings shall be required unless "all assets" filings are permitted under applicable local law to cover multiple properties without the requirement of separate legal descriptions for each property. The Fixture Filing may be included as part of the Mortgage for such Financed SF Property or Properties, as applicable.

"<u>Flood Laws</u>" shall mean the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973, the National Flood Insurance Reform Act of 1994, the Biggert-Waters Flood Insurance Act of 2012, as such statutes may be amended or re-codified from time to time, any substitutions, any regulations published under such flood laws, and all other legal requirements relating to flood insurance.

"<u>Floor</u>" shall mean the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the Adjusted Term SOFR Rate or the Adjusted Daily Simple SOFR, as applicable. For the avoidance of doubt the initial Floor for each of Adjusted Term SOFR Rate or the Adjusted Daily Simple SOFR shall be 1%.

"<u>Freddie Mac</u>" shall mean Freddie Mac, or any successor thereto.

"<u>Freddie Mac House Price Index</u>" shall mean, with respect to any geographic area, on any date of determination, the non-seasonally adjusted median home value reported for such geographic area (or its closest equivalent) by the "Freddie Mac House Price Index" published by Freddie Mac or any Affiliate thereof, or any successor or replacement index as is mutually agreed in writing by Borrower Representative and Administrative Agent.

"<u>Funding Date</u>" shall mean the date on which an Advance is made by Lenders to a Borrower in accordance with this Agreement.

"<u>GAAP</u>" shall mean generally accepted accounting principles in the United States of America, applied on a consistent basis and applied to both classification of items and amounts, and shall include the official interpretations thereof by the Financial Accounting Standards Board, its predecessors and successors.

"<u>GLB Act</u>" shall have the meaning set forth in <u>Section 29(b)</u> hereof.

"<u>Governing Documents</u>" shall mean, with respect to any Person, its articles or certificate of incorporation or formation, by-laws, partnership, limited liability company, memorandum and articles of association, operating or trust agreement and/or other organizational, charter or governing documents, including with respect to Borrowers, its respective SPE Agreement.

<u>ernmental Authority</u>" shall mean any (a) nation or government, (b) state or local or other political subdivision thereof, (c) central bank or similar monetary or regulatory authority,

&nbsp;&nbsp;&nbsp;&nbsp;(d) agency, authority, instrumentality, court, regulatory body, central bank or other body or entity exercising executive, legislative, judicial, taxing, quasi-judicial, quasi-legislative, regulatory or administrative functions or powers of or pertaining to government, (e) court or arbitrator having jurisdiction over such Person, its Affiliates or its assets or properties, (f) stock exchange on which shares of stock of such Person are listed or admitted for trading, (g) accounting board or authority that is responsible for the establishment or interpretation of national or international accounting principles, and (h) supra national body such as the European Union or the European Central Bank.

"<u>Guarantee</u>" shall mean, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the

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payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise); <u>provided</u>, that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms "Guarantee" and "Guaranteed" used as verbs shall have correlative meanings.

"<u>Guarantor</u>" shall mean Offerpad Holdings LLC, a Delaware limited liability company.

"<u>Guaranty</u>" shall mean that certain Guaranty, dated as of September 10, 2021, made by

Pledgor in favor of Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.

"<u>Hazardous Materials</u>" shall mean (a) lead, petroleum or petroleum products, asbestos, asbestos-containing material, urea formaldehyde, or polychlorinated biphenyls (PCBs), (b) any chemical, material, waste, or substance defined, listed, classified or designated under any Environmental Law or by any Governmental Authority pursuant to any Environmental Law as explosive, corrosive, flammable, toxic, hazardous, acutely hazardous, a contaminant, a pollutant, or other words of similar meaning or regulatory effect or otherwise a danger or threat to health or the environment under any Environmental Law, all substances listed as hazardous substances pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, or defined as a hazardous waste pursuant to the federal Resource Conservation and Recovery Act of 1976, as amended (c) any chemical, materials, waste or substance, whether solid, liquid, gaseous, semisolid or any combination thereof, which is in any way regulated as such by any Governmental Authority under any Environmental Law and (d) any substance (including, without limitation, mold, mildew, fungi, fungal spores and metabolites such as mycotoxins and microbial volatile organic compounds) the presence of which requires investigation or remediation under any applicable Environmental Law or creates or threatens to create a nuisance or trespass on adjoining property, but excluding anything contained or used in products used in de minimis quantities, which products are customarily used or stored in similar properties for the purposes of cleaning or other maintenance or operations, provided the same continue to be in compliance with Environmental Laws in all material respects and do not result in contamination of the Property in violation of Environmental Laws in any material respect.

"<u>Improvements</u>" shall mean all buildings, structures, improvements, parking areas, landscaping, fixtures and articles of property now erected on, attached to, or used or adapted for use in the operation of any Property, including all heating, air conditioning and incinerating apparatus and equipment, all boilers, engines, motors, dynamos, generating equipment, piping and plumbing fixtures, water heaters, ranges, cooking apparatus and mechanical kitchen equipment, refrigerators, freezers, cooling, ventilating, sprinkling and vacuum cleaning systems, fire extinguishing apparatus, gas and electric fixtures, carpeting, floor covering, underpadding, storm sashes, awnings, signs, furnishings of public spaces, halls and lobbies, and shrubbery and plants.

"<u>Income</u>" shall mean, with respect to any Financed SF Property, without duplication, all income, dividends and distributions received with respect to such Financed SF Property,

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including any rental or lease payments (excluding, for the avoidance of doubt, any closing fee credits associated with an Extended Stay Agreement executed by the Borrower), Net Sale Proceeds from the sale, transfer, liquidation or other disposition thereof, insurance proceeds, condemnation proceeds, interest, dividends or other distributions payable thereon or any fees or payments of any kind received in connection therewith. For the avoidance of doubt, any amounts distributed in accordance with <u>Section 4(c)(viii)</u> herein shall no longer constitute Income after so distributed.

"<u>Indebtedness</u>" shall mean, with respect to any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within ninety (90) days of the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP; (f) obligations of such Person under repurchase agreements, sale/buy-back agreements or like arrangements; (g) Indebtedness of others Guaranteed by such Person; (h) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; and (i) Indebtedness of general partnerships of which such Person is a general partner. "Indebtedness" shall exclude any Convertible Notes.

"<u>Indemnified Agent Party</u>" shall have the meaning set forth in <u>Section 33(k)</u> hereof.

"<u>Indemnified Party</u>" shall have the meaning set forth in <u>Section 15(a)</u> hereof.

"<u>Independent Manager</u>" shall mean an individual who has prior experience as an independent director, independent manager or independent member with at least three (3) years of employment experience and who is provided by Amacar Group, CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, Stewart Management Company, Lord Securities Corporation or, if none of those companies is then providing professional independent directors or independent managers, another nationally-recognized company approved by the Administrative Agent, in the exercise of its reasonable discretion, in each case that is not an Affiliate of a Borrower, Pledgor or the Guarantor and that provides professional independent directors and independent managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager of a Borrower or Pledgor and is not, has never been, and will not while serving as Independent Manager be, any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)a member, partner, equity holder, manager, director, officer or employee of a Borrower, Pledger or the Guarantor, or any of their respective equity holders or

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Affiliates (other than as an Independent Director or Independent Manager of a Borrower, Pledgor, the Guarantor, or an Affiliate thereof or any of their respective single-purpose equity holders, provided that such Independent Director or Independent Manager is employed by a company that routinely provides professional Independent Directors or Independent Managers);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)a creditor, supplier or service provider (including provider of professional services) to a Borrower, Pledgor or the Guarantor, or any of their respective equity holders or Affiliates (other than a nationally-recognized company that routinely provides professional Independent Directors or Independent Managers and other corporate services to a Borrower, Pledgor, or the Guarantor, any single purpose entity equity holder, or any of their respective equity holders or Affiliates in the ordinary course of business);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)a family member of any such member, partner, equity holder, manager, director, officer, employee, creditor, supplier or service provider; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)a Person that controls (whether director, indirectly or otherwise) any of the individuals described in the preceding clauses (i), (ii) or (iii).

An individual who otherwise satisfies the preceding definition other than clause (i) by reason of being the Independent Director or Independent Manager of a "special purpose entity" affiliated with a Borrower, Pledgor or the Guarantor shall not be disqualified from serving as an Independent Director or Independent Manager of a Borrower of a Pledgor if the fees that such individual earns from serving in such role in any given year constitute in the aggregate less than five percent (5%) of such individual's annual income for that year.

"<u>Ineligible SF Property</u>" shall mean, as of any date of determination, any Financed SF Property that is not an Eligible SF Property.

"<u>Insolvency Action</u>" shall mean, with respect to any Person, the taking by such Person of any action resulting in an Insolvency Event, other than solely under clause (vii), or clause (ix) as it relates to clause (vii), of the definition thereof.

"<u>Insolvency Event</u>" shall mean, with respect to any Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the filing of a decree or order for relief by a court having jurisdiction in the premises with respect to such Person in an involuntary case under any applicable Insolvency Law now or hereafter in effect, or the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its assets or property, or ordering of the winding-up or liquidation of such Person's affairs, and such decree or order shall remain unstayed and in effect for a period of thirty (30) days; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)the commencement by such Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)the consent by such Person to the entry of an order for relief in an involuntary case under any Insolvency Law; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its assets or property; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)the making by such Person of any general assignment for the benefit of creditors; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)the admission by such Person that it is not Solvent or not willing to pay its debts generally as they become due; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)the failure by such Person generally to pay its debts as they become due, unless such debts are the subject of a bona fide dispute as to liability or amount; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)the adoption of a plan relating to the liquidation or dissolution of any Borrower, Pledgor or Guarantor; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) the taking of action by such Person in furtherance of any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) "Insolvency Law" shall mean the United States Bankruptcy Code of 1978, as amended from time to time, and all other applicable liquidation, conservatorship, bankruptcy, moratorium, arrangement, rearrangement, receivership, insolvency, reorganization, suspension of payments, winding up or composition, adjustment of debts marshaling of assets and liabilities or similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

"<u>Insurance Requirements</u>" shall mean those requirements set forth in <u>Schedule 4</u>.

"<u>Interest Reserve Amount</u>" shall mean the Class A Interest Reserve Amount and the Class B Interest Reserve Amount, as applicable.

"<u>Investment Company Act</u>" shall mean the Investment Company Act of 1940, as amended from time to time.

"<u>ISDA Definitions</u>" shall mean the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.

"<u>Interest Rate</u>" shall mean with respect to any Class A Advance, the Class A Interest Rate, and with respect to any Class B Advance, the Class B Interest Rate.

"<u>Joinder Agreement</u>" shall mean a joinder agreement in substantially the form of <u>Exhibit</u> <u>F</u> hereto entered into by Borrowers, Lenders, Administrative Agent, Calculation Agent, Paying Agent and one or more Special Purpose Entities acceptable to Administrative Agent in its sole discretion pursuant to which such Special Purpose Entities are joined as Additional Borrowers hereunder and under the other Facility Documents.

"<u>Lender</u>" or "<u>Lenders</u>" shall mean the entity or entities set forth on <u>Schedule 1</u> to the Side Letter, in each case together with its respective successors and permitted assigns.

"<u>Lien</u>" shall mean any lien, claim, charge, restriction, pledge, security interest, mortgage, deed of trust or other encumbrance.

"<u>Limited Guaranty</u>" shall mean that certain Limited Guaranty, dated as of September 10, 2021, made by Guarantor in favor of Administrative Agent, as the same may be amended, supplemented or otherwise modified from time to time.

"<u>Loan Account</u>" shall mean the segregated non-interest bearing trust sub-account of the Collection Account established and maintained, or caused to be established and maintained, by the Paying Agent for the benefit of the Administrative Agent and entitled "92424600, Loan Account - Wells Fargo Bank, National Association, as Paying Agent, fbo Administrative Agent, as secured party" or such other account established or caused to be established by the Paying

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Agent (or any successor) as may be designated in writing from time to time by the Paying Agent and, if such account is not established at Wells Fargo, then at a bank mutually agreed upon, in writing, by the Administrative Agent and the Borrower.. Funds on deposit in the Loan Account shall remain uninvested.

"<u>Mandatory Repayment</u>" shall have the meaning set forth in <u>Section 2(h)(i)</u> hereof.

"<u>Margin Stock</u>" shall have the meaning assigned to that term in Regulation U of the

Board of Governors of the Federal Reserve System as in effect from time to time.

"<u>Market</u>" shall mean any CSA or MSA and the area within twenty-five (25) miles of such CSA or MSA, as applicable.

"<u>Market Initial Valuation</u>" shall have the meaning set forth in the definition of "Market Valuation Change".

"<u>Market Step-Down Event</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Market Valuation Change</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Material Adverse Effect</u>" shall mean a material adverse effect on or a material adverse change in or to (a) the Property, business, assets, operations or financial condition of the Borrower Parties, taken as a whole, or Guarantor, (b) the ability of any Borrower Party to perform its obligations under any of the Facility Documents to which it is a party as and when due, (c) the legality, validity, binding effect or enforceability of any of the Facility Documents against any party thereto, (d) the perfection or priority of any lien granted under any Facility Document (which shall apply to any Mortgage Document only after such Mortgage Documents have been recorded in accordance with <u>Section 2(l)</u>), or (e) the rights and remedies of Administrative Agent, Lenders or any of their respective Affiliates under any of the Facility Documents.

"<u>Maturity Date</u>" shall mean March 10, 2024, including any extension made in accordance with <u>Section 2</u> hereof.

"<u>Maximum Facility Amount</u>" shall mean the amount set forth on <u>Schedule 1</u> to the Side

Letter.

"<u>Mortgage</u>" shall mean a Mortgage or Deed of Trust or Deed to Secure Debt, as

applicable, for each Financed SF Property, prepared by the related Borrower and executed and delivered by the related Borrower in recordable form acceptable to Administrative Agent in its reasonable discretion to the extent required pursuant to <u>Section 2(l)</u>, with respect to the Improvements and the Financed SF Property, as Collateral for the Advance, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time with the prior written consent of Administrative Agent.

"<u>Mortgage Documents</u>" shall mean the Mortgages and the Fixture Filings.

"<u>Mortgage Event</u>" shall mean, the occurrence of an Event of Default described in <u>Section</u> <u>12 (p)</u> <u>provided</u>, <u>however</u>, any such "Mortgage Event" may be waived in writing (which written waiver may be via email) by Administrative Agent in its sole and absolute discretion.

"<u>Mortgage Period</u>" shall mean, with respect to any Financed SF Property, any period

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during which a Mortgage Event has occurred and is continuing.

"<u>MSA</u>" shall mean a Metropolitan Statistical Area as determined by the U.S. Office of Management and Budget.

"<u>MSA Test Market</u>" shall have the meaning ascribed to such term in the Side Letter. "<u>Multiemployer Plan</u>" shall mean, with respect to any Borrower, a "multiemployer plan"

as defined in Section 3(37) of ERISA which is or was at any time during the current year or the immediately preceding five years contributed to (or required to be contributed to) by such Borrower or any ERISA Affiliate thereof on behalf of its employees and which is covered by Title IV of ERISA.

"<u>Net Sale Proceeds</u>" shall mean, in connection with the sale or other disposition of a Financed SF Property, the gross amount of the related Sale Proceeds, less any customary and industry standard closing expenses (including, but not limited to, the fees or commissions to a broker or real estate agent, fees to the related municipality to transfer title of the Financed SF Property and transfer taxes), in each case, incurred and paid to any Person in connection with such sale or disposition.

"<u>Non-Excluded Taxes</u>" shall have the meaning set forth in <u>Section 6(a)</u> hereof.

"<u>Non-Exempt Lender</u>" shall have the meaning set forth in <u>Section 6(e)</u> hereof. "<u>Note</u>" shall mean any Class A Note or Class B Note, as applicable.

"<u>Notice Date</u>" shall have the meaning set forth in <u>Section 2(e)(i)</u> hereof.

"<u>NYFRB</u>" shall mean the Federal Reserve Bank of New York.

"<u>NYFRB's Website</u>" shall mean the website of the NYFRB at http://www.newyorkfed.org, or any successor source.

"<u>NYFRB Rate</u>" shall mean, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term "NYFRB Rate" means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it.

"<u>OFAC</u>" shall mean the U.S. Department of the Treasury's Office of Foreign Assets Control.

"<u>Operating Account</u>" shall mean the segregated account established by OFFERPAD SPE BORROWER A, LLC at the Account Bank, and which shall be subject to an Operating Account Control Agreement.

"<u>Operating Account Control Agreement</u>" shall mean the deposit account control agreement, dated on or about the date hereof, among OFFERPAD SPE BORROWER A, LLC, Administrative Agent and Account Bank, which shall provide for Administrative Agent control over the Operating Account and shall be in form and substance acceptable to Administrative Agent, as the same may be amended, restated, modified and supplemented and in effect from time to time.

"<u>Optional Repayment</u>" shall have the meaning set forth in <u>Section 2(g)(i)</u> hereof.

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"<u>Optional Repayment Date</u>" shall have the meaning set forth in <u>Section 2(g)(i)</u> hereof.

"<u>Original Appraised Value</u>" shall mean the stated U.S. dollar value contained in theAppraisal delivered prior to the Funding Date regarding the fair market value of a Property, which value shall be the "as is" value set forth in such Appraisal; <u>provided</u>, <u>however</u>, that the Original Appraised Value for any Financed SF Property shall be deemed to be zero with respect to any Financed SF Property that is an Ineligible SF Property.

"<u>Original Evaluation Value</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Original Property Value</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Other Charges</u>" shall mean all ground rents, maintenance charges, impositions other than Property Taxes, and any other charges now or hereafter assessed or imposed against an SF Property or any part thereof.

"<u>Other Connection Taxes</u>" shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Facility Document, or sold or assigned an interest in any Advance or Facility Document).

"<u>Other Taxes</u>" shall have the meaning set forth in <u>Section 6(b)</u> hereof.

"<u>Outstanding Advance Amount</u>" shall mean, on any date of determination and any SF Property with respect to which any Advance has been made hereunder, (i) with respect to the Class A Advances, the aggregate outstanding principal balance of all outstanding Class A Advances as of such date, and (ii) with respect to the Class B Advances, the aggregate outstanding principal balance of all outstanding Class B Advances as of such date; <u>provided</u>, that the "Outstanding Advance Amount" with respect to any SF Property subject to an Optional Repayment in accordance with <u>Section 2(g)(ii)</u>, shall be zero after receipt by Administrative Agent of the full Repayment Amount therefor and the application of such Repayment Amount by Paying Agent pursuant to <u>Section 2(g)(ii)</u>, and Paying Agent shall use commercially reasonable efforts to complete such application within two (2) Business Days of remittance of such Repayment Amount to the Collection Account pursuant to <u>Section 2(g)(ii)</u>.

"<u>Overnight Bank Funding Rate</u>" shall mean, for any day, the rate comprised of both overnight federal funds and overnight eurodollar transactions denominated in Dollars by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on the NYFRB's Website from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.

"<u>PA Parties</u>" shall have the meaning set forth in <u>Section 17(a)(v)</u> hereof. "<u>Parents</u>" shall mean Guarantor and Pledgor.

"<u>Participant Register</u>" shall have the meaning set forth in <u>Section 18(b)</u> hereof.

"<u>Patriot Act</u>" shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001), as amended, including all rules, regulations, orders and writs thereunder.

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"<u>Paying Agent</u>" shall mean initially Wells Fargo Bank, National Association and its successors or any replacement designated pursuant to <u>Section 17(a)</u>. Wells Fargo Bank, National Association will perform its duties as Paying Agent hereunder through its Corporate Trust Services division.

"<u>Paying Agent Fee</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>PBGC</u>" shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

"<u>Periodic Remittance Report</u>" shall have the meaning set forth in <u>Section 4(b)</u> hereof.

"<u>Permitted Lien</u>" shall mean, for any SF Property: (a) applicable zoning, building and land use laws, ordinances, rules and regulations, (b) materialmen's, mechanic's, carriers', workmen's, repairmen's and similar Liens, in each case, arising in the ordinary course of business securing obligations that are not yet delinquent, (c) the lien of taxes, assessments and home owners' association dues and fees not yet due and payable or being diligently contested in good faith by appropriate proceedings, (d) all non-monetary liens, encumbrances, easements and other matters of record, (e) any matters set forth in any of the owner's title insurance policy for such Property, (f) Liens arising under any solar leases or power purchase agreements with respect to solar panels secured solely by such solar panels or equipment, and (g) Liens granted pursuant to or by the Facility Documents.

"<u>Person</u>" shall mean any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or political subdivision thereof) including, but not limited to, Borrowers.

"<u>Plan</u>" shall mean, with respect to any Borrower, any employee pension benefit plan as defined in Section 3(2) of ERISA that is or was at any time during the current year or immediately preceding five years established, maintained or contributed to by such Borrower or any ERISA Affiliate thereof and that is covered by Title IV of ERISA, other than a Multiemployer Plan.

"<u>Pledge Agreement</u>" shall mean the Pledge and Security Agreement dated as of the Closing Date by Pledgor in favor of Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.

"<u>Pledged Collateral</u>" shall have the meaning set forth in the Pledge Agreement.

"<u>Pledgor</u>" shall mean OFFERPAD SPE BORROWER A HOLDINGS, LLC, a Delaware limited liability company and its successors in interest and assigns.

"<u>Post-Renovation Advance Amount</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Power of Attorney</u>" shall mean the power of attorney in the form of <u>Exhibit E</u> delivered by each Borrower.

"<u>Pricing Period</u>" shall mean (i) initially, the period commencing on the Closing Date up to and including the last day of the calendar month in which the Closing Date occurs, and (ii) thereafter, the period commencing on the first (1st) day of each calendar month up to and including the last day of such calendar month; provided, however, that in no event shall any Pricing Period end subsequent to the Repayment Date.

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"<u>Pro Rata Share</u>" shall mean on any date of determination, (i) for any Class A Lender, the percentage equivalent of a fraction (a) prior to the termination of the Revolving Period, the numerator of which is equal to such Lender's Class A Commitment on such date of determination and the denominator of which is equal to the Class A Committed Facility Amount and (b) on and after the termination of the Revolving Period, the numerator of which is the portion of the Advances Outstanding on such date that have been funded by such Lender and the denominator of which is equal to the Advances Outstanding on such date with respect to the Class A Lenders collectively and (ii) for any Class B Lender, the percentage equivalent of a fraction (a) prior to the termination of the Revolving Period, the numerator of which is equal to such Lender's Class B Commitment on such date of determination and the denominator of which is equal to the Class B Committed Facility Amount and (b) on and after the termination of the Revolving Period, the numerator of which is the portion of the Advances Outstanding on such date that have been funded by such Lender and the denominator of which is equal to the Advances Outstanding on such date with respect to the Class B Lenders collectively.

"<u>Property</u>" shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

"<u>Property Assessment Report</u>" shall mean a multi-point home condition assessment report prepared with respect to the applicable SF Property by Asset Manager in its standard format, as updated from time to time.

"<u>Property Documents</u>" shall mean, with respect to any SF Property, the documents set forth on <u>Schedule 3</u>.

"<u>Property Taxes</u>" shall mean all real estate and personal property taxes assessments, water rates or sewer rents, now or hereafter levied or assessed or imposed against any SF Property.

"<u>Property Valuation Report</u>" shall have the meaning ascribed to such term in the Side Letter.

"<u>Property Value</u>" shall mean the Original Property Value or, if applicable, the Updated Property Value.

"<u>Purchase Agreement</u>" shall mean the purchase agreement or other similar document between a Borrower and a Transferor pursuant to which such Borrower acquires an SF Property from such Transferor.

"<u>Purchase Deadline</u>" shall have the meaning set forth in <u>Section 14(b)(v)</u> hereof.

"<u>Purchase Option</u>" shall have the meaning set forth in <u>Section 14(b)(v)</u> hereof.

"<u>Purchase Option Notice</u>" shall have the meaning set forth in <u>Section 14(b)(v)</u> hereof.

"<u>Recipient</u>" shall have the meaning set forth in <u>Section 29(a)</u> hereof.

"<u>Records</u>" shall mean all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by the related Borrower or any other Person or entity with respect to an SF Property. Records shall include the Property Documents, the credit files related to the SF Property and any other instruments necessary to document or manage an SF Property.

"<u>Reference Time</u>" with respect to any setting of the then-current Benchmark means (1) if such Benchmark is the Term SOFR Rate, 5:00 a.m. (Chicago time) on the day that is two U.S.

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Government Securities Business Days preceding the date of such setting, (2) if such Benchmark is Daily Simple SOFR, then four Business Days prior to such setting or (3) if such Benchmark is none of the Term SOFR Rate or Daily Simple SOFR, the time determined by the Administrative Agent in its reasonable discretion.

"<u>Register</u>" shall have the meaning set forth in <u>Section 19</u> hereof.

"<u>Regulations T, U or X</u>" shall mean Regulations T, U and X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time.

"<u>Regulatory Change</u>" shall mean any change after the date hereof in United States federal, state or foreign laws or regulations (including Regulation D of the Board of Governors of the Federal Reserve System) or the adoption or making after such date of any interpretations, directives or requests applying to a class of banks including Lenders of or under any United States federal or state, or any foreign, laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof; <u>provided</u> that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith or in the implementation thereof and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall be deemed to be a "Regulatory Change", regardless of the date enacted, adopted, issued or implemented.

"<u>Released Property</u>" shall have the meaning set forth in <u>Section 2(i)</u> hereof.

"<u>Relevant Governmental Body</u>" shall mean, the Federal Reserve Board and/or the NYFRB, or a committee officially endorsed or convened by the Federal Reserve Board and/or the NYFRB or, in each case, any successor thereto.

"<u>Remittance Date</u>" shall mean with respect to each Pricing Period each of (i) the twentieth (20th) day of each calendar month or such other day as is mutually agreed to in writing by Borrower Representative, the Calculation Agent and Administrative Agent and (ii) the Repayment Date.

"<u>Repayment Amount</u>" shall mean, with respect to any SF Property and the related Advance, as of any date of determination, an amount equal to (A) the applicable Outstanding Advance Amount <u>plus</u> (B) any accrued and unpaid Facility Interest on the applicable Outstanding Advance Amount to and including such date of determination <u>plus</u> (C) an amount equal to all other accrued and unpaid Secured Obligations applicable to such SF Property and the related Advance Amount then due and payable.

"<u>Repayment Date</u>" shall mean, with respect to any Advance, the earliest of (i) the Maturity Date, (ii) the date requested or determined pursuant to <u>Section 2(g)</u> or <u>Section 2(h)</u> hereof, (iii) the Accelerated Repayment Date.

"<u>Reportable Event</u>" shall mean any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty (30) day notice period is waived under PBGC Reg.

§ 4043.

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"<u>Representatives</u>" shall have the meaning set forth in <u>Section 29(a)</u> hereof.

"<u>Required Lenders</u>" shall mean, on any day, the Required Class A Lenders until the Class A Commitments have been terminated or expired and the Secured Obligations owing to the Class A Lenders have been paid in full in cash or immediately available funds, and, thereafter, the Required Class B Lenders.

"<u>Required Class A Lenders</u>" shall mean on any day, Class A Lenders with Pro Rata Shares exceeding fifty percent (50%) in the aggregate.

"<u>Required Class B Lenders</u>" shall mean on any day, Class B Lenders with Pro Rata Shares exceeding fifty percent (50%) in the aggregate.

"<u>Requirement of Law</u>" shall mean (i) all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities, whether now or hereafter enacted and in force (including any applicable law, rule or regulation regarding capital adequacy or liquidity coverage) or any change therein after the date hereof, (ii) any change after the date hereof in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency and (iii) all permits, licenses and authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to the Borrowers, at any time in force affecting any Borrower, any SF Property or any part thereof (or, if applicable, affecting any other Borrower Party), including, without limitation, any which may (a) require repairs, modifications or alterations in or to an SF Property or any part thereof, or (b) in any way limit the use and enjoyment of an SF Property; provided that for purposes of this definition, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder, issued in connection therewith or in implementation thereof, and (y) all requests, rules, guidelines and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities in connection with Basel II or Basel III, shall in each case be deemed to be a "Requirement of Law", regardless of the date enacted, adopted, issued or implemented.

"<u>Responsible Officer</u>" shall mean, (a) as to any Person (other than Calculation Agent or Paying Agent), the chief executive officer the chief financial officer, the chief operating officer, the general counsel or other senior executives of such Person, (b) as to any Borrower Party, in addition to the foregoing, any manager or director or managing member, (c) as to the Independent Manager appointed for a Borrower, any officer with direct responsibility for administering such Borrower, and (d) as to the Calculation Agent and Paying Agent, any officer of the Calculation Agent or the Paying Agent, as applicable, with direct responsibility for the administration of this Agreement, and with respect to a particular matter, any other officer having authority to act on behalf of the Calculation Agent or the Paying Agent, as applicable, to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject.

"<u>Revolving Period</u>" shall mean the period commencing on the Closing Date and ending on the date that is the earliest of (i) twenty-four (24) months following the Closing Date, including any extension made in accordance with <u>Section 2</u> hereof, (ii) the date on which any Event of

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Default occurs, or (iii) the date on which any Early Amortization Event occurs.

"<u>RFR Advance</u>" shall mean, as to any Advance, the RFR Loans comprising such Advance.

"<u>RFR Loan</u>" shall mean a Loan that bears interest at a rate based on the Adjusted Daily Simple SOFR.

"<u>S&P</u>" shall mean S&P Global Ratings, a division of S&P Global Inc., and includes any successor to its rating business.

"<u>Sale Proceeds</u>" shall mean the aggregate proceeds of any sale, transfer or other disposition of a Financed SF Property.

"<u>Sanction</u>" or "<u>Sanctions</u>" shall mean, individually and collectively, any and all economic or financial sanctions, trade embargoes and anti-terrorism laws imposed, administered or enforced from time to time by: (a) the United States of America, including those administered by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC), the U.S. State Department, the U.S. Department of Commerce, or through any existing or future Executive Order; (b) the United Nations Security Council; (c) the European Union; (d) the United Kingdom; or (e) any other governmental authorities with jurisdiction over Borrower or any of its Affiliates.

"<u>Sanctioned Target</u>" shall mean any Person, group, sector, territory, or country that is the target of any Sanctions, including without limitation, any legal entity that is deemed to be the target of any Sanctions based upon the direct or indirect ownership or control of such entity by any other Sanctioned Target(s).

"<u>Section 6 Certificate</u>" shall have the meaning set forth in <u>Section 6(e)(ii)</u> hereof.

"<u>Secured Obligations</u>" shall mean (a) all amounts owed by Borrowers to Lenders or

Administrative Agent in connection with any or all Advances hereunder, under the Mortgage Documents and the Facility Documents, together with interest thereon (including interest which would be payable as post-petition interest in connection with any bankruptcy or similar proceeding) and (b) all other fees or expenses which are payable hereunder, under the Mortgage Documents and the Facility Documents, in each case, whether such amounts or obligations owed are direct or indirect, absolute or contingent, matured or unmatured.

"<u>Servicing Agents</u>" shall mean, collectively, Paying Agent, Calculation Agent, Diligence Agent, Valuation Agent, and "Servicing Agent" shall mean any one of them.

"<u>SF Property</u>" shall mean a Single Family Property that is wholly owned by or acquired by a Borrower and the fee title to which is held by such Borrower, together with all Improvements thereon and all other rights, benefits and proceeds arising from and in connection with such property.

"<u>Side Letter</u>" shall mean that Side Letter dated as of the date hereof between Administrative Agent, the Lenders, the Borrower Representative, the Calculation Agent and the Paying Agent.

"<u>Single Family Property</u>" shall mean a single parcel of real property with a detached single family residence erected thereon, or a two- to four-family dwelling, or an individual condominium unit in a low-rise or high-rise condominium project, or an individual townhome, or an individual unit in a planned unit development or a de minimis planned unit development

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located in the District of Columbia or in a state of the United States of America; and such property is not a cooperative, a condotel, manufactured housing, mixed use property or a mobile home.

"<u>SOFR</u>" shall mean a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.

"<u>SOFR Administrator</u>" shall mean the NYFRB (or a successor administrator of the secured overnight financing rate).

"<u>SOFR Administrator's Website</u>" shall mean the NYFRB's website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

"<u>SOFR Determination Date</u>" has the meaning specified in the definition of "Daily Simple SOFR".

"<u>SOFR Rate Day</u>" has the meaning specified in the definition of "Daily Simple SOFR". "<u>Solvent</u>" shall mean, with respect to any Person as of the date of determination, both (i)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the sum of such Person's Indebtedness (including contingent liabilities) does not exceed the present fair saleable value of such Person's present assets, (b) such Person's capital is not unreasonably small in relation to its business as then contemplated and (c) such Person has not incurred Indebtedness beyond its ability to pay such Indebtedness as they become due (whether at maturity or otherwise) and (ii) such Person is "solvent" within the meaning given that term and similar terms under any Requirement of Law relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Accounting Standards Codification Topic 450).

"<u>SPE Agreement</u>" shall mean with respect to a Borrower Party, its related operating agreement or equivalent constitutive agreement and all amendments, supplements and modifications thereto.

"<u>Special Purpose Entity</u>" shall mean a limited partnership or limited liability company (i) whose sole purpose, as reflected in its SPE Agreement, is to acquire, hold, finance, improve, renovate, repair, maintain, mortgage, rent, lease and dispose, directly or indirectly, SF Properties,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) that does not engage in any business unrelated to the purpose stated in clause (i) above and activities business incidental thereto, (iii) does not have any assets other than SF Properties and as otherwise reasonably necessary or appropriate to conduct its business purpose (as reflected in clause (i) above) to the extent not prohibited by this Agreement or the other Facility Documents,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) has its own books and records separate and apart from the books and records of any other Person, (v) is subject to all of the limitations on the powers set forth in its SPE Agreement as in effect on the date such Person becomes a party hereunder, (vi) holds itself out as a Person separate and apart from any other Person, and (vii) is in compliance with all of the covenants set forth in <u>Section 12(t)</u> hereof.

"<u>Specified Market</u>" shall have the meaning ascribed to such term in the Side Letter.

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"<u>Subcontractor</u>" shall mean a property management company subcontracted by Asset Manager in compliance with the applicable Asset Management Agreement to perform services with respect to one or more SF Properties.

"<u>Subcontractor Agreement</u>" shall mean each agreement entered into between Asset Manager and a Subcontractor.

"<u>Subsidiary</u>" shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.

"<u>Supernova SPAC Transaction</u>" shall mean, with respect to Guarantor, Borrower and any of their affiliates that certain merger, or series of mergers, between Supernova Inc. and Offerpad, Inc., a Delaware corporation, that results in the Guarantor becoming a public company.

"<u>Taxes</u>" shall have the meaning set forth in <u>Section 6(a)</u> hereof.

"<u>Term Benchmark Advance</u>" when used in reference to any Loan or Advance, refers to whether such Loan, or the Loans comprising such Advance, are bearing interest at a rate determined by reference to the Adjusted Term SOFR Rate.

"<u>Term SOFR Determination Day</u>" has the meaning assigned to it under the definition of Term SOFR Reference Rate.

"<u>Term SOFR Rate</u>" shall mean, with respect to any Term Benchmark Advance and for any tenor comparable to the applicable Pricing Period, the Term SOFR Reference Rate at approximately 5:00 a.m., Chicago time, two U.S. Government Securities Business Days prior to the commencement of such tenor comparable to the applicable Pricing Period, as such rate is published by the CME Term SOFR Administrator.

"<u>Term SOFR Reference Rate</u>" means, for any day and time (such day, the "<u>Term SOFR</u> <u>Determination Day</u>"), with respect to any Term Benchmark Advance denominated in Dollars and for any tenor comparable to the applicable Pricing Period, the rate per annum published by the CME Term SOFR Administrator and identified by the Administrative Agent as the forward-looking term rate based on SOFR. If by 5:00 pm (New York City time) on such Term SOFR Determination Day, the "<u>Term SOFR Reference Rate</u>" for the applicable tenor has not been published by the CME Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Rate has not occurred, then, so long as such day is otherwise a U.S. Government Securities Business Day, the Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the CME Term SOFR Administrator, so long as such first preceding U.S. Government Securities Business Day is not more than five (5) U.S. Government Securities Business Days prior to such Term SOFR Determination Day.

"<u>Transferor</u>" shall mean the seller of an SF Property under a Purchase Agreement, which

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may be an Affiliate of the applicable acquiring Borrower.

"<u>Type</u>", when used in reference to any Advance, refers to whether the rate of interest on such Advance, is determined by reference to the Adjusted Term SOFR Rate, the Alternate Base Rate or the Adjusted Daily Simple SOFR.

"<u>Unadjusted Benchmark Replacement</u>" shall mean the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

<u>"Uncommitted Advance" shall have the meaning set forth in Section 2(b).</u> 

<u>"Uncommitted Facility Amount" shall mean, as of any date of determination, the excess, if any, of (a) the Maximum Facility Amount over (b) the Committed Facility Amount.</u>

"<u>Uniform Commercial Code</u>" or "<u>UCC</u>" shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; <u>provided</u>, that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interest in any Collateral or the continuation, renewal or enforcement thereof is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, "Uniform Commercial Code" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection.

"<u>Unused Fee</u>" shall mean the Class A Unused Fee and the Class B Unused Fee.

"<u>Updated Property Valuation Report</u>" shall mean the Appraisal or Evaluation, as applicable, if any, obtained within thirty (30) days prior to the Updated Property Valuation Report Delivery Date and delivered to Administrative Agent by the Valuation Agent on or prior to the Updated Property Valuation Report Delivery Date.

"<u>Updated Property Valuation Report Delivery Date</u>" shall mean, with respect to any Eligible SF Property and the Acquisition Date related to any Advance made with respect to such Eligible SF Property, the close of business on the one hundred eightieth (180th) day following such Acquisition Date.

"<u>Updated Property Value</u>" shall mean the stated U.S. dollar value contained in the Updated Property Valuation Report regarding the fair market value of a Property, which value shall be the "as is" value set forth in such Updated Property Valuation Report; <u>provided</u>, <u>however</u>, that the Updated Property Value for any Financed SF Property shall be deemed to be zero with respect to any Financed SF Property that is an Ineligible SF Property.

"<u>Upfront Fees</u>" shall mean the Class A Upfront Fee and the Class B Upfront Fee.

"<u>U.S. Government Securities Business Day</u>" shall mean any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

"<u>Valuation Agent</u>" shall mean Pro-Teck Services, Ltd., or such other licensed real estate agent or broker, in each case, which is not an Affiliate of Administrative Agent or Guarantor and which is mutually acceptable to Administrative Agent and Borrowers and has been selected based solely on vendor capacity.

"<u>Wells Fargo</u>" shall mean Wells Fargo Bank, National Association, a national banking

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association, and any successor or assign.

Section 2. <u>Facility.Advances</u>. Subject to the terms and conditions set forth herein, each Lender agrees that it shall make Advances with respect to Eligible SF Properties to Borrowers from time to time during the Revolving Period. The Class A Lenders shall fund Class A Advances in an amount, for each Class A Lender, equal to the Class A Lender Commitment Percentage of the amount requested with respect to any Class A Advance by Borrower Representative pursuant to <u>Section 2(e)</u> and the Class B Lenders shall fund Class B Advances in an amount, for each Class B Lender, equal to the Class B Lender Commitment Percentage of the amount requested with respect to any Class B Advance by Borrower Representative pursuant to <u>Section 2(e)</u>; <u>provided</u> that no Lender shall make any such Advance <u>pursuant to this Section 2(a)</u> or portion thereof if after giving effect to such Advance the Aggregate Advance Amount funded by such Lender for all Financed SF Properties securing outstanding Advances under this Agreement will exceed the Commitment of such Lender; <u>further provided</u> that no Lender shall make any such Advance or portion thereof following the renovation of such Financed SF Property if such Advance will exceed the Post-Renovation Advance Amount. Subject to the terms and conditions herein, Advances re-paid hereunder may be reborrowed as new Advances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)[Reserved]Uncommitted Advances. Subject to the terms and conditions set forth <u>herein, the Lenders may, in their sole discretion, make Advances (each such Advance, an</u> <u>"Uncommitted Advance"), with respect to Eligible SF Properties, to the Borrower from time to</u> <u>time during the Revolving Period if any requested Advance would cause the Aggregate Advance</u> <u>Amount funded by the Lenders for all Financed SF Properties securing outstanding Advances</u> <u>under this Agreement to exceed the Committed Facility Amount; provided that (x) no Lender</u> <u>shall make any such Uncommitted Advance or portion thereof if after giving effect to such</u> <u>Uncommitted Advance the outstanding principal amount of the Uncommitted Advances for all</u> <u>Financed Properties securing outstanding Uncommitted Advances under this Agreement will</u> <u>exceed the Uncommitted Facility Amount. The Class A Lenders shall fund Class A Advances of</u> <u>any Uncommitted Advance in an amount, for each Class A Lender, equal to the Class A Lender</u> <u>Commitment Percentage of the amount requested with respect to any Class A Advance by</u> <u>Borrower Representative pursuant to Section 2(e) and the Class B Lenders shall fund Class B</u> <u>Advances of any Uncommitted Advance in an amount, for each Class B Lender, equal to the</u> <u>Class B Lender Commitment Percentage of the amount requested with respect to any Class B</u> <u>Advance by Borrower Representative pursuant to Section 2(e); provided that no Lender shall</u> <u>make any such Advance pursuant to this Section 2(b) or portion thereof if after giving effect to</u> <u>such Advance the Aggregate Advance Amount funded by such Lender for all Financed SF</u> <u>Properties securing outstanding Advances under this Agreement will exceed the Maximum</u> <u>Facility Amount of such Lender; further provided that no Lender shall make any such</u> <u>Uncommitted Advance or portion thereof following the renovation of such Financed SF Property</u> <u>if such Uncommitted Advance will exceed the Post-Renovation Advance Amount. Subject to</u> <u>the terms and conditions herein, Uncommitted Advances re-paid hereunder may be reborrowed</u> <u>as new Uncommitted Advances. As of any date of determination all outstanding Advances will</u> <u>first be attributed to and counted against the Commitment of each Lender as an Advance</u> <u>pursuant</u> 

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<u>to Section 2(a) and then the remainder thereof, if any is available, shall be deemed and</u> <u>made as Uncommitted Advances up to the Uncommitted Facility Amount</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Conditions Precedent to Initial Advance</u>. Each Lender's agreement to make the initial Advance hereunder is subject to the satisfaction of the conditions precedent set forth below and to the condition precedent that Administrative Agent shall have received from Borrowers any fees and expenses payable hereunder, and all of the following documents:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Facility Documents</u>. Each Borrower Party, Borrower Representative and Guarantor shall have duly executed and delivered, or caused to be duly executed and delivered to Administrative Agent for its benefit and the benefit of each Lender each Facility Document to which it is a party. Each party (other than each Lender, Administrative Agent, each Borrower Party, Borrower Representative and Guarantor) shall have duly executed and delivered, or caused to be duly executed and delivered to Administrative Agent for its benefit and the benefit of each Lender, each Facility Document to which each is a party. Each of the Facility Documents so executed and delivered are to be in form and substance reasonably satisfactory to each Lender and Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)<u>Operating Account, Collection Account and Concentration Account</u>. OFFERPAD SPE BORROWER A, LLC shall have established the Operating Account with the Account Bank and the Concentration Account with the Concentration Account Bank. Borrower Representative on behalf of Borrowers shall have established the Collection Account with Paying Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)<u>Opinions of Counsel</u>. (A) General corporate and enforceability opinion or opinions of external counsel to Borrower Parties and Guarantor including an Investment Company Act opinion; (B) a security interest opinion of external counsel covering the perfection of Administrative Agent's interest in the Collateral (excluding the form of Mortgages that would be recorded following a Mortgage Event) and the Pledged Collateral, and (C) a non-consolidation opinion of external counsel with respect to Guarantor on the one hand and Borrowers and Pledgor on the other, each in form and substance satisfactory to each Lender and Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)<u>Borrower Party and Guarantor Organizational Documents</u>. For each Borrower Party in existence as of the date hereof and Guarantor, (A) a certificate of existence delivered to Administrative Agent on or prior to the Closing Date and (B) certified copies of the applicable Governing Documents and of all corporate or other authority with respect to the execution, delivery and performance of the Facility Documents, each in form and substance satisfactory to each Lender and Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)<u>Good Standing Certificates</u>. For each Borrower Party in existence as of the date hereof and the Guarantor, a certified copy of a good standing certificate from the relevant jurisdiction of organization, dated as of no earlier than the date that is thirty (30) Business Days prior to the Closing Date with respect to the initial

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Advance hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)<u>Incumbency Certificates</u>. For each Borrower Party and the Guarantor, an incumbency certificate of the applicable secretary, certifying the names, true signatures and titles of the representatives duly authorized to request Advances hereunder and to execute the Facility Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)<u>Security Interest</u>. Evidence that all other actions necessary to perfect and protect the grant, pledge and assignment by (A) each Borrower to Administrative Agent or Lenders or their respective designees, subject to the terms of this Agreement, of all of such Borrower's right, title and interest in and to the Financed SF Properties together with all right, title and interest in and to the proceeds of any related Collateral have been taken (which shall apply to any Mortgage Document only after such Mortgage Documents have been recorded in accordance with <u>Section 2(l)</u>), and (B) Pledgor to Administrative Agent or its designee, subject to the terms of the Pledge Agreement, of all of Pledgor's right, title and interest in and to each Borrower together with all right, title and interest in and to the proceeds of any related Pledged Collateral. Borrowers and Pledgor shall take all steps as may be necessary in performing UCC searches and duly authorized and filing Uniform Commercial Code financing statements on Form UCC-1;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)<u>Capital Stock of Borrower</u>. The original limited liability company certificates evidencing 100% of the Capital Stock of each Borrower together with appropriate transfer and assignment documents in blank duly executed or endorsed by Pledgor and delivered to Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)<u>Appointment of Independent Manager</u>. Evidence that an Independent Manager has been appointed in accordance with each applicable SPE Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)<u>Representations and Warranties</u>. The representations and warranties made by each Borrower in <u>Section 11</u> hereof, representations and warranties of Guarantor under the Limited Guaranty, representations of the Asset Manager under each Asset Management Agreement, and representations and warranties of Pledgor under the Pledge Agreement, shall be true, correct and complete in all material respects on and as of the related Funding Date for such Advance with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi)<u>Completion of Proceedings</u>. All limited liability company proceedings taken or to be taken, or any unanimous written consent in lieu thereof, in connection with the transactions contemplated hereby previously found acceptable by Administrative Agent and its counsel shall be satisfactory in form and substance to Administrative Agent and such counsel, and Administrative Agent and such counsel shall have received all such counterpart originals or certified copies of such documents as Administrative Agent may reasonably request;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii)<u>Certificates of Insurance</u>. Borrowers shall have delivered to Administrative Agent copies of all certificates of insurance necessary to satisfy the Insurance Requirements, and on or before November 10, 2021, insurance endorsements necessary to satisfy the Insurance Requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii)<u>Search Results</u>. Administrative Agent shall have received results of a search of the UCC (or equivalent) filings made and bankruptcy, tax, judgment, and litigation lien searches with respect to each Borrower, Pledgor, and Guarantor in such jurisdictions as Administrative Agent may request (including copies of the financingstatements (or similar documents) disclosed by such search) and evidence reasonably satisfactory to Administrative Agent that the Liens indicated by such financing statements (or similar documents) are Permitted Liens or have been released;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv)<u>Notes</u>. If so requested by any Class A Lender or Class B Lender on the Closing Date or at any time after the Closing Date by written notice to the Borrower Representative (with a copy to the Administrative Agent), the Borrowers shall promptly execute and deliver to such Class A Lender or Class B Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of such Class A Lender or such Class B Lender), a Class A Note or Class B Note, as applicable, in such Lender's Pro Rata Share of the Class A Commitment or the Class B Commitment, as applicable; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv)<u>Other Documents</u>. Such other documents as Administrative Agent may commercially reasonably request in order to effect the purposes of this Agreement (other than any opinions related to Mortgages prepared during a Mortgage Period), in form and substance commercially reasonably acceptable to Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Conditions Precedent to each Advance</u>. The making of each Advance (including the initial Advance) is subject to the satisfaction, or waiver (any such waiver to be in the sole discretion of Administrative Agent) of the following further conditions precedent, both immediately prior to entering into such Advance and also after giving effect thereto to the intended use thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>No Default</u>. No Early Amortization Event, Default or Event of Default shall have occurred and be continuing under the Facility Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)<u>Committed Facility Amount</u>. After giving effect to the requested Advance, the Class A Advances Outstanding shall not exceed the Class A Committed Facility Amount and the Class B Advances Outstanding shall not exceed the Class B Committed Facility Amount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)<u>Eligible SF Property</u>. Each SF Property proposed to be financed is an Eligible SF Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)<u>Advance Request</u>. Borrower Representative shall have delivered to Administrative Agent, Calculation Agent and Diligence Agent (a) an Advance Request with respect to such Advance and (b) an Asset Schedule with respect to

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such Advance, in each case in accordance with the procedures set forth in <u>Section 2(e)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)<u>Fees and Expenses</u>. Administrative Agent shall have received all fees and expenses, including all fees and expenses of counsel to Administrative Agent and due diligence vendors as contemplated by <u>Section 10</u> and <u>Section 15(b)</u>, which amounts, at Administrative Agent's option, following delivery of written notice by the Administrative Agent to the Borrower Representative, may be withheld from the proceeds remitted by Lenders to the related Borrower pursuant to any Advance hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)<u>Security Interest</u>. Evidence that all other actions required pursuant to the Facility Documents to perfect and protect Administrative Agent's interest in the Financed SF Properties and other Collateral have been taken (which shall apply to any Mortgage Document only after such Mortgage Document has been recorded in accordance with <u>Section 2(l)</u>);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)<u>Joinder of Additional Borrower</u>. If a Borrower is being added to this Agreement pursuant to the mutual written agreement of the Administrative Agent and the Borrower Representative, each in their sole and absolute discretion, in connection with such Advance (each, an "<u>Additional Borrower</u>"), (A) Administrative Agent shall have received a Joinder Agreement duly executed by such Additional Borrower, and (B) each of the conditions precedent set forth in <u>Section 2(c)</u> and each of the other conditions precedent set forth in the Joinder Agreement shall have been, satisfied in connection with such Additional Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)<u>Due Diligence</u>. Administrative Agent has completed to its satisfaction such due diligence (including, Administrative Agent's "Know Your Customer", Anti-Corruption Laws, Sanctions and Anti-Money Laundering Laws diligence) as Administrative Agent may require;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)<u>No Material Adverse Effect</u>. No Material Adverse Effect shall exist;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)<u>Concentration Limit Breach</u>. With respect to any SF Property proposed to be financed, the aggregate requested Class A Outstanding Advance Amount with respect to such SF Property proposed to be financed will not cause a Concentration Limit to be breached;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi)<u>Post-Renovation Incremental Draw</u>. If such requested Advance is following the renovation of any SF Property, then the Valuation Agent (at the direction of the Borrowers) shall deliver (at the applicable Borrower's sole cost and expense) to Administrative Agent an updated Evaluation for such SF Property, each of which must be dated after the date of completion of such renovation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii)<u>Maximum Facility Amount</u>. After giving effect to the requested

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Advance, the Advances Outstanding shall not exceed the Maximum Facility Amount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii)<u>Lender Pro Rata Share</u>. With respect to each Class, any Lender's Pro Rata Share of the Advances Outstanding with respect to such Class will not exceed such Lender's Commitment with respect to such Class; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv)<u>Other Documents</u>. Such other documents as Administrative Agent may reasonably request, in form and substance reasonably acceptable to Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Initiation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)From time to time during the Revolving Period, Borrower Representative may, on behalf of any or all of Borrowers, request (not more than two (2) times per calendar week) that Lenders make one or more loans (individually, each an "<u>Advance</u>" and collectively, "<u>Advances</u>") to one or more specified Borrowers by delivering to Administrative Agent and Calculation Agent an Advance Request (each date such a notice is received by Administrative Agent and Calculation Agent, a "<u>Notice Date</u>") which Advance Request shall set forth the amount of the requested Class A Advance and Class B Advance, and whether such Class A Advance or Class B Advance exceeds the Class A Committed Facility Amount or the Class B Committed Facility Amount, respectively, such Class A Advance in a minimum aggregate amount of $1,000,000, and such Class B Advance in a minimum aggregate amount of $200,000, and in reasonable detail a description of all SF Properties (including each existing Financed SF Property and each related SF Property that is requested by Borrowers to become a Financed SF Property in connection with such Advance (if applicable)), including, but not limited to, the street address, Asset Purchase Price and requested Funding Date for each such SF Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Each Advance Request shall be delivered to Administrative Agent and Calculation Agent at least two (2) Business Days prior to the requested Funding Date, and upon timely receipt of an Advance Request, (A) Calculation Agent shall prepare and deliver to Administrative Agent, within two (2) Business Days of the related Notice Date, a report of Calculation Agent in the form agreed to separately in writing between Administrative Agent and Calculation Agent setting forth the results of any applicable calculations required in connection with such Advance Request and (B) Administrative Agent on behalf of the applicable Lender shall direct the Valuation Agent to prepare and deliver to Administrative Agent a Property Valuation Report with respect to each SF Property identified in such Advance Request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)For each SF Property identified in an Advance Request, Borrower Representative, on behalf of the related Borrower, shall make available, or cause to be made available, electronic copies (which electronic copies may be made available via a secure website) of the Property Documents with respect to such SF Property to Administrative Agent and Diligence Agent. The Diligence Agent

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shall, within three (3) Business Days after receipt of such Advance Request and such Property Documents, deliver to Administrative Agent, the Calculation Agent and Borrower Representative, either (A) its certification in the form attached hereto as <u>Exhibit G</u> or such other form as mutually agreed to by Borrower Representative and Administrative Agent, that (i) it has reviewed each Property Documents related to such Advance Request, that there is no Diligence Deficiency with respect to any such Property Documents and (ii) it has completed its due diligence review of each SF Property, including, without limitation, that it has determined that each such SF Property is an Eligible SF Property or (B) if it has found any Diligence Deficiency, a Diligence Agent Deficiency Notice;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)With respect to any Advance, subject to the satisfaction or waiver by Administrative Agent on behalf of Lenders of the conditions set forth in <u>Section 2(d)</u>, Administrative Agent, on behalf of Lenders, shall confirm (which confirmation may be via email or evidenced by the applicable Lender's funding (if any) of the proposed Advance, which funding shall be deemed to be such Lender's and Administrative Agent's (A) confirmation of the terms of the proposed Advance set forth in the applicable Advance Request and (B) waiver of the representations and warranties contained in <u>Schedule 2</u> to the Side Letter as set forth in an appendix attached to the applicable Advance Request) the terms of the proposed Advance prior to the requested Funding Date and such confirmation by Administrative Agent of the proposed Advance shall be deemed to be Administrative Agent's and Lenders' acceptance of the terms of the proposed Advance set forth in the applicable Advance Request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)Lenders' approval of the funding of an Advance shall be evidenced only by Administrative Agent's confirmation pursuant to this <u>Section 2(e)</u> of such Advance. For the avoidance of doubt, Lenders shall not (A) be deemed to have approved an SF Property or Advance Request by virtue of any other agreement with respect to such SF Property or Advance Request, or (B) be obligated to make an Advance notwithstanding an Advance Request executed by Borrower Representative unless and until all applicable conditions precedent in <u>Section 2(d)</u> have been satisfied or waived by Administrative Agent on behalf of Lenders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)Each Advance Request, together with this Agreement, shall be conclusive evidence of the terms of the Advance covered thereby. If terms in an Advance Request are inconsistent with terms in this Agreement with respect to a particular Advance and Administrative Agent has confirmed such Advance or Lenders have made such Advance in accordance with the terms of this Agreement, the Advance Request shall control notwithstanding any such inconsistent terms in this Agreement. Whenever the Advance Amount, or any other term of an Advance is revised or adjusted in accordance with this Agreement (other than the Interest Rate and Outstanding Advance Amount or any other adjustment that shall affect all outstanding Advances), an amended and restated Advance Request reflecting such revision or adjustment and that is otherwise acceptable to the parties hereto shall be prepared by Administrative Agent and executed by Borrower

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Representative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)Regardless of whether Administrative Agent has conducted any partial or complete examination or any other due diligence review of any SF Property, neither the rights of Lenders shall be affected under the Facility Documents nor shall any representations or warranties or other rights or remedies thereunder or otherwise be affected;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)The Administrative Agent shall remit to the Paying Agent written instruction as to the amounts described in subsection (i) through (vi) below of this subsection (viii), (which instruction may be in electronic form), so it is received by the Paying Agent no later than 4:00 p.m. (New York City time) one (1) Business Day prior to such Funding Date. On the date specified in the Advance Request (provided the Advance Request is delivered pursuant to Section 2(e) hereof), subject to satisfaction of the applicable conditions precedent specified in Section 2(d), each Class A Lender and Class B Lender shall remit its Pro Rata Share of the Class A Advance and Class B Advance, respectively, requested by the Borrowers to the Loan Account by 1:00 p.m. (New York City time) by wire transfer of same day funds. Funds received by the Paying Agent from any Lender after 1:00 p.m. (New York City time) on any Business Day may, at the discretion of the Paying Agent, be deemed to have been received on the next Business

Day. In the event that any Lender fails to make its portion of an Advance such that an Advance is not fully funded, the Paying Agent shall hold such funds received by it in the Loan Account until such time that all Advances in connection with the applicable Advance Request are received. In the event any Borrower requests an Advance in an amount that exceeds the Class A Committed Facility Amount or the Class B Committed Facility Amount, each Lender shall determine whether to make such Advance. Upon receipt of such funds from the Lenders, the Paying Agent, provided it has received the instruction from the Administrative Agent described in the first sentence of this subsection (viii), shall remit such funds by wire transfer of same day funds immediately available (or in the case of a balance due to the Administrative Agent, any Servicing Agent or any Lender (including, without limitation, with respect to any fees, expenses and indemnification amounts due and payable or reimbursable to such party) on the next Remittance Date, as applicable, netting such estimated amounts against the amount required to be advanced by such Lender and paying such amounts on the next Remittance Date) as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)<u>first</u>, pro rata to the Class A Lenders on account of unpaid fees (including any Class A Upfront Fee), expenses, interest, breakage costs (if any), any outstanding Advance Reduction, Concentration Limit Advance Reduction and indemnity amounts and any other amounts due to Class A Lenders under the Facility Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)<u>second</u>, pro rata to Class A Lenders to reduce the outstanding Repayment Amount allocable to the Class A Lenders for each

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Financed SF Property, if any, that has been sold or transferred to zero ($0);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)<u>third,</u> to retain in the Collection Account an amount necessary so that the Class A Interest Reserve Amount is retained in the Collection Account (calculated as of the applicable Funding Date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)<u>fourth</u>, pro rata to the Class B Lenders on account of unpaid fees (including any Class B Upfront Fee), expenses, interest, breakage costs (if any), any outstanding Advance Reduction, Concentration Limit Advance Reduction and indemnity amounts and any other amounts due to Class B Lenders under the Facility Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)<u>fifth</u>, pro rata to Class B Lenders to reduce the outstanding Repayment Amount allocable to the Class B Lenders for each Financed SF Property, if any, that has been sold or transferred to zero ($0);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F)<u>sixth</u>, to retain in the Collection Account an amount necessary so that to the Interest Reserve Amount is retained in the Collection Account (calculated as of the applicable Funding Date); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G)<u>seventh</u>, any remaining amounts shall be remitted in accordance with the written instructions of Borrower Representative provided to Administrative Agent and Paying Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Repayment of Advances</u>. With respect to any Optional Repayment (defined below), the related Borrower shall deliver written notice to Administrative Agent and Calculation Agent by 1:00 p.m. (New York City time) at least two (2) Business Days prior to the related Repayment Date identifying the Advance to be repaid and the amount of such repayment, Calculation Agent shall prepare and deliver to Administrative Agent, at least two (2) Business Days prior to the related Repayment Date, a report of Calculation Agent in the form agreed to separately in writing between Administrative Agent and Calculation Agent setting forth the results of any applicable calculations required in connection with such Optional Repayment, and Administrative Agent shall communicate to such Borrower in writing one (1) Business Day prior to the related Repayment Date its calculation of the Repayment Amount. With respect to any Mandatory Repayment, Administrative Agent shall communicate to such Borrower in writing one (1) Business Day prior to the related Repayment Date its calculation of the Repayment Amount. The related Borrower shall pay to Administrative Agent the Repayment Amount for each Advance on the applicable Repayment Date. Borrowers shall pay to Administrative Agent the Aggregate Repayment Amount and all other Secured Obligations then due and owing on the Facility Termination Date. Such obligation to repay exists without regard to any prior or intervening liquidation. Upon payment in full of the Aggregate Repayment Amount and all other Secured Obligations and the termination of this Agreement, (i) the Liens of the Mortgage Documents, if any, shall be automatically released by Administrative Agent and (ii) Administrative Agent shall cause the trustees under any of the recorded Mortgages to reconvey the applicable Financed SF Properties to the related Borrower. In connection with the releases of the Liens, the related Borrower may submit to Administrative Agent, forms of releases of Liens for execution by Administrative

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Agent. Such releases shall be the forms appropriate in the jurisdictions in which the Financed SF Properties are located and contain standard provisions protecting the rights of Administrative Agent. Borrowers shall pay all out-of-pocket costs, taxes and expenses associated with the release of the Liens of the Mortgage Documents, if any, including Administrative Agent's reasonable attorneys' fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)<u>Optional Repayment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Borrowers may repay Advances (or a portion thereof) (an "<u>Optional</u> <u>Repayment</u>") at any time prior to the Facility Termination Date (such date, "<u>Optional</u> <u>Repayment Date</u>"), without premium or penalty but subject to the payment of breakage fees (if applicable) and the limitations set forth in this <u>Section 2(g)</u>, as further described herein, as long as, after payment of the applicable Repayment Amount, no Event of Default exists and is continuing. In connection with any such Optional Repayment, the related Borrower shall, if the release of the related Financed SF Property is requested by the related Borrower, pay to Administrative Agent the applicable Repayment Amount or, if a partial repayment is being made, the amount of such prepayment, on such Optional Repayment Date; <u>provided</u> that if such Optional Repayment Date is not a Remittance Date, the related Borrower shall also pay to Administrative Agent any amount due under <u>Section 2(j)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Borrowers may effect an Optional Repayment in connection with a sale or transfer of one or more Financed SF Properties to another Person (including an Affiliate of a Borrower); <u>provided</u>, that the amount remitted to the Concentration Account with respect to such Financed SF Properties (in the aggregate) equals or exceeds the

Repayment Amount of such Financed SF Properties (in the aggregate) and no Default or Event of Default has occurred and is continuing. The related Borrower shall cause the Net Sale Proceeds to be remitted directly to the Concentration Account to be withdrawn, on a daily basis, and deposited in the Collection Account to be applied by Paying Agent available (or in the case of a balance due to the Administrative Agent, any Servicing Agent or any Lender (including, without limitation, with respect to any fees, expenses and indemnification amounts due and payable or reimbursable to such party) on the next Remittance Date, as applicable, netting such estimated amounts against the amount required to be advanced by such Lender and paying such amounts on the next Remittance Date) on each Borrowing Base Calculation Date as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)<u>first</u>, pro rata to Class A Lenders, any accrued and unpaid Facility Interest on the applicable Outstanding Advance Amount for such Financed SF Property that is being released;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)<u>second</u>, pro rata to Class A Lenders, the applicable Repayment Amount less any accrued and unpaid Facility Interest on the applicable Outstanding Advance Amount for such Financed SF Property that is being released;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)<u>third</u>, pro rata to each Class A Lender on account of unpaid breakage costs under <u>Section 2(j)</u> in connection with such Optional Repayment, and any outstanding Advance Reduction and Concentration Limit Advance Reduction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)<u>fourth</u>, to retain in the Collection Account an amount necessary so that the Class A Interest Reserve Amount is retained in the Collection Account (calculated as of the applicable Funding Date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)<u>fifth</u>, pro rata to Class B Lenders, any accrued and unpaid Facility Interest on the applicable Outstanding Advance Amount for such Financed SF Property that is being released;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F)<u>sixth</u>, pro rata to Class B Lenders, the applicable Repayment Amount less any accrued and unpaid Facility Interest on the applicable Outstanding Advance Amount for such Financed SF Property that is being released;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G)<u>seventh</u>, pro rata to each Class B Lender on account of unpaid breakage costs under <u>Section 2(j)</u> in connection with such Optional Repayment, and any outstanding Advance Reduction and Concentration Limit Advance Reduction; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(H)<u>eighth</u>, to retain in the Collection Account an amount necessary so that the Interest Reserve Amount is retained in the Collection Account (calculated as of the applicable Funding Date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(I)<u>ninth</u>, any remaining amounts shall be remitted in accordance with the written instructions of Borrower Representative provided to Administrative Agent and Paying Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)<u>Mandatory Repayment, Advance Reduction and Concentration Limit Advance</u> <u>Reduction</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)If at any time any Financed SF Property is an Ineligible SF Property, then the applicable Borrower shall repay a portion of the Advances Outstanding in an amount equal to the Repayment Amount with respect to such Financed SF Property (a "<u>Mandatory Repayment</u>"). Upon deposit of any amounts in the Collection Account in connection with such Mandatory Repayment, the Borrower Representative shall notify the Administrative Agent, the Lenders, the Calculation Agent and the Paying Agent of the deposit and amount thereof, the purpose for which it was deposited, the identity of the related SF Property, and the Advances Outstanding therefor. The related Repayment Amount shall be paid on the second (2nd) Business Day following notice or discovery by such Borrower that such Financed SF Property is an Ineligible SF Property. Upon receipt of the Borrower Representative's notice referred to above, the Paying Agent shall make payment in the order of priority set forth in Section 2(g)(ii) from the amounts deposited by or on behalf of the Borrowers into the Collection

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Account for such purpose. Administrative Agent's rights under this <u>Section 2(h)(i)</u> are in addition to and not in lieu of any other rights of Administrative Agent under the Facility Documents or any Requirement of Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)On any date of determination, upon the request of Administrative Agent, Borrower Representative shall promptly calculate and determine whether a Borrowing Base Deficiency exists. If, on any date of determination, a Borrowing Base Deficiency exists, then the applicable Borrower shall repay a portion of the related Advances Outstanding in an amount necessary to reduce the Borrowing Base Deficiency to zero (any such reduction being an "<u>Advance Reduction</u>"). Upon deposit of such amount in the Collection Account, Borrower shall notify the Administrative Agent, the Calculation Agent and the Paying Agent of the deposit and amount thereof and the purpose for which it was deposited. Upon receipt of Borrower's notice referred to above, the Paying Agent shall make payment in the order of priority set forth in <u>Section 2(g)(ii)</u> from the amounts deposited by or on behalf of Borrower into the Collection Account for such purpose. For the avoidance of doubt, Borrower may make, or cause to be made, direct deposits by wire transfer of funds to the Collection Account on any Business Day to correct a Borrowing Base Deficiency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)The related Advance Reduction shall be paid on the earliest to occur of

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the next following Remittance Date, (B) the next following Funding Date, (C) the next following date of Optional Repayment pursuant to <u>Section 2(g)(ii)</u> and (D) two (2) Business Days following the determination by Borrower Representative of such Borrowing Base Deficiency. Administrative Agent's rights under this <u>Section 2(h)(ii)</u> are in addition to and not in lieu of any other rights of Administrative Agent under the Facility Documents or any Requirement of Law.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)If, on any date of determination, a Concentration Limit has been breached, then the applicable Borrower shall repay a portion of the related Advances Outstanding in an amount necessary to cure such breach of the Concentration Limit to the Class A Lenders or the Class B Lenders, as applicable (any such reduction being a "<u>Concentration</u> <u>Limit Advance Reduction</u>"). The Borrower Representative shall notify the Administrative Agent, the Lenders, the Calculation Agent and the Paying Agent of the deposit and amount thereof, and the purpose for which it was deposited. Upon receipt of the Borrower Representative's notice referred to above, the Paying Agent shall make payment in the order of priority set forth in Section 2(g)(ii) from the amounts deposited by or on behalf of the Borrowers into the Collection Account for such purpose. The related Concentration Limit Advance Reduction shall be paid on the earliest to occur of

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the next following Remittance Date, (B) the next following Funding Date, (C) the next following date of Optional Repayment pursuant to <u>Section 2(g)(ii)</u> and (D) two (2) Business Days following notice or discovery by such Borrower that such Concentration Limit has been breached. Lender's rights under this <u>Section 2(h)(iii)</u> are in addition to and not in lieu of any other rights of Lender under the Facility Documents or any Requirement of Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Release</u>. In the event of any Optional Repayment or Mandatory Repayment with respect to a Financed SF Property, upon receipt of the applicable Repayment Amount and other amounts due in connection therewith or the applicable Repayment Amount, as applicable, as provided in <u>Section 2(g)</u> or <u>Section 2(h)</u> (and, for purposes of clarity, prior to the application of the Repayment Amount on the applicable Borrowing Base Calculation Date), such SF Property shall be automatically released by Administrative Agent without any further action of the related Borrower from the applicable Mortgage Documents, if any, and related Lien (a "<u>Released</u> <u>Property</u>"), <u>provided</u>, that the related Borrower may deliver to Administrative Agent and Calculation Agent a release (and, in the event the related Mortgage encumbers other Financed SF Properties in addition to the Released Property, such release shall be a partial release that relates only to the Released Property and does not affect the Liens and security interests encumbering or on the other Financed SF Properties) in form and substance reasonably acceptable to Administrative Agent and appropriate for the jurisdiction and in which such Released Property is located, which release shall be executed by Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)<u>Term SOFR Breakage Costs</u>. Without limiting, and in addition to, the provisions of <u>Section 15</u> hereof, Borrowers agree that if any Repayment Amount is paid other than in connection with an ordinary course liquidation of an SF Property and such Repayment Amount is paid on a date other than on a Remittance Date, Borrowers shall, upon demand by Administrative Agent, pay to Lenders any such amounts to compensate Lenders for any additional losses (not including lost profits), costs or expenses which Lenders may incur as a result of such payments, including any hedge breakage costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)<u>Use of Proceeds</u>. The proceeds of the Advances will be used by Borrowers for the costs and expenses related to their acquisition of SF Properties or the

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reimbursement of the costs and expenses related to their previous acquisition of SF Properties; <u>provided</u>, that no portion of the proceeds of any Advance may be used in any manner that causes or might cause

such Advance or the application of such proceeds to violate Regulations T, U or X of the Board of Governors of the Federal Reserve System or any other regulation thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)<u>Preparation/Recordation of Mortgage Documents</u>. On or after the commencement of any Mortgage Period with respect to a Financed SF Property (or such period beginning on a later date as the applicable Lender may agree in writing (which agreement in writing may be via email) in its sole discretion), the Borrowers shall promptly execute Mortgage Documents with respect to such Financed SF Property and file or record, as applicable, such Mortgage Documents. For purposes of clarity, (x) other than during a Mortgage Period with respect to a Financed SF Property, the Property Documents with respect to such Financed SF Property are not required to include any Property Documents set forth in clause (i) of the "Property Documents" and (y) during a Mortgage Period with respect to an SF Property, Borrowers shall be responsible for any amounts incurred by Borrowers in connection with any execution and/or delivery of any Mortgage Documents pursuant to this <u>Section 2(l)</u>, including without limitation any recording, filing or other similar fees, costs or taxes incurred by Borrowers in connection with the preparation, filing, recording, or releasing of any Mortgage Documents with respect to Financed SF Properties pursuant to this <u>Section 2(l)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)<u>Defaulting Lender</u>. Notwithstanding any provision of this Agreement to the contrary, if any Lender fails to remit to Administrative Agent its proportionate share of any requested Advance in accordance with <u>Section 2(e)</u>, such Lender will be a "Defaulting Lender", and the following provisions shall apply for so long as such Lender is a Defaulting Lender:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Unused Fees in respect of the unfunded portion of the Commitment of such Defaulting Lender shall cease to accrue pursuant the terms of the Facility Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)The unused portion of the Commitment of such Defaulting Lender may be reduced to zero without any contemporaneous ratable reduction of the Commitments of the other Lenders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Neither the Commitment nor the Advances of such Defaulting Lender shall be included in determining whether all Lenders have taken or may take any action hereunder and the Defaulting Lender shall not be included in determining whether all Lenders have taken or may have taken any action; <u>provided</u>, that any waiver, amendment or modification requiring the consent of all Lenders which affects such Defaulting Lender differently than other affected Lenders or Lenders shall require the consent of such Defaulting Lender, as applicable.

In the event that Administrative Agent determines that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then (x) each Lender's share of the Advances shall be readjusted to reflect the inclusion of

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such Lender's Commitment and on such date such Lender shall purchase at par such of the Advances of the other Lenders as Administrative Agent and Lenders shall determine may be necessary in order for such Lender to hold such Advances in accordance with its Commitment whereupon such Lender will cease to be a Defaulting Lender and (y) the provisions of clauses (i) through (iii) above shall, from and after such determination, cease to be of further force or effect with respect to such Lender; <u>provided</u> that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of Borrowers while such Lender was a Defaulting Lender; <u>provided</u>, <u>further</u>, that except to the extent otherwise expressly agreed by the affected parties, no cessation hereunder of a Lender as a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from such Lender having been a Defaulting Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)<u>Borrower Representative</u>. Each Borrower hereby appoints and designates Borrower Representative as its representative and agent and attorney-in-fact, with power of substitution, to act on its behalf for any and all purposes with respect to the Facility Documents. Borrower Representative shall have authority to exercise on behalf of such Borrower all rights and powers that it deems, in its sole discretion, necessary, incidental or convenient in connection with the Facility Documents, including the authority to issue Advance Requests, give instructions with respect to the disbursement of the proceeds of the Advances, give and receive all other notices and consents hereunder or under any of the other Facility Documents and take all other actions (including in respect of compliance with covenants) on behalf of any Borrower or Borrowers under the Facility Documents, it being the intent of each Borrower to grant to Borrower Representative plenary power to act on behalf of such Borrower in connection with and pursuant to the Facility Documents. Borrower Representative hereby accepts such appointment. The appointment of Borrower Representative as representative and agent and attorney-in-fact for each Borrower shall be coupled with an interest and be irrevocable so long as the Facility Documents shall remain in effect unless, if an Event of Default has occurred and is continuing, Borrower Representative is terminated by Administrative Agent by Administrative Agent providing Borrower Representative with prior written notice of Administrative Agent's election to terminate Borrower Representative. Each Lender and Administrative Agent may regard any notice or other communication pursuant to any Facility Document from Borrower Representative as a notice or communication from all Borrowers, and may give any notice or communication required or permitted to be given to any Borrower or Borrowers hereunder to Borrower Representative on behalf of such Borrower or Borrowers. Each Borrower agrees that each action, notice, election, representation and warranty, covenant, agreement and undertaking made on its behalf by Borrower Representative shall be deemed for all purposes to have been made, issued, entered into or executed and delivered by such Borrower and shall be binding upon and enforceable against such Borrower to the same extent as if the same had been made, issued, entered into or executed and delivered directly by such Borrower. Upon any such termination of Borrower Representative's designation hereunder, any obligation of Borrower Representative under the Facility Documents shall cease to be an obligation of Borrower Representative and shall be deemed to be an obligation of the applicable Borrower. Borrower Representative shall forward to each applicable Borrower any notices, invoices and other information requested by or received from Administrative Agent or any Lender immediately upon receipt by Borrower Representative. Borrower

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Representative may not resign nor be removed from acting in its capacity as representative and agent and attorney-in-fact of each Borrower by any Borrower so long as the Facility Documents remain in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)The Borrowers may, upon written notice to Administrative Agent, terminate the unused Committed Facility Amount, or from time to time permanently reduce the unused Committed Facility Amount, in each case without premium or penalty; provided that (A) any such notice shall be received by Administrative Agent three (3) Business Days prior to the date of termination or reduction and (B) any such partial reduction shall be in a minimum aggregate amount of $1,000,000 and in integral multiples of $100,000 in excess thereof. Each such termination or permanent reduction must be accompanied by a payment of any amounts payable under <u>Section 10</u> or any other amounts due from the Borrowers hereunder in respect thereof.

Section 3. <u>Payment of Facility Interest</u>.Except as otherwise set forth in this Agreement, (i) the Advances Outstanding with respect to the Class A Advances shall on each day bear interest at the Class A Applicable Rate and (ii) the Advances Outstanding with respect to the Class B Advances shall on each day bear interest at the Class B Applicable Rate. Interest shall accrue on a 360-day per year basis for the actual number of days elapsed during the relevant period. Interest on the Advances Outstanding shall be payable in arrears on each Remittance Date in respect of the previous Pricing Period and on the Facility Termination Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)On each Remittance Date, Borrowers shall pay to Administrative Agent the Facility Interest accrued and outstanding during the related Pricing Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Notwithstanding the foregoing, Borrowers shall pay to Administrative Agent interest at the applicable Default Rate on any principal of any Advance and on any other amounts payable by Borrowers hereunder, that shall not be paid in full when due (whether at stated maturity, by acceleration or by mandatory prepayment or otherwise), for the period from and including the due date thereof to but excluding the date the same is paid in full. Any such amount shall be secured by the Mortgages, if applicable, and other Mortgage Documents to the extent permitted by Requirements of Law.

Section 4. <u>Income Payments.Collection and Retention of Income</u>. Borrowers shall ensure that all Income is remitted directly into the Concentration Account without first being deposited into any account maintained by any Borrower-Related Party or any other Person. To the extent that any Borrower-Related Party (other than the related Borrower) is holding any Income consisting of Net Sale Proceeds, such Borrower shall cause such Borrower-Related Party to deposit such Income on receipt by such Borrower-Related Party into the Concentration Account. Funds deposited in the Concentration Account shall be held therein, in trust for Administrative Agent, and Administrative Agent shall instruct the Concentration Account Bank to withdraw, on a daily basis, funds then on deposit in the Concentration Account and deposit such funds in the Collection Account subject to the terms of the Concentration Account Control Agreement. Funds on deposit in the Collection Account, the Concentration Account and the Operating Account shall remain uninvested; <u>provided</u>, that, notwithstanding the foregoing, the Collection Account may be a "Plus Money Market Deposit Account" at the Paying Agent or such other

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type of account at the Paying Agent as is acceptable to Administrative Agent in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Periodic Remittance Report</u>. On each Remittance Date, Calculation Agent will provide Paying Agent with written instructions directing the distribution of Income then on deposit in the Collection Account, all in sufficient detail to allow Paying Agent to comply with such instructions (such instructions, the "<u>Periodic Remittance Report</u>"). In furtherance of the foregoing, no later than 5:00 p.m. (New York time) three (3) Business Days prior to each Remittance Date, Borrower Representative shall deliver to Calculation Agent and Administrative Agent a monthly property management report of Borrowers in the form attached hereto as

<u>Exhibit D</u> setting forth information (relating to the immediately preceding complete calendar month) regarding all of the Financed SF Properties. Upon receipt of such monthly property management report, Calculation Agent shall review the substance thereof, verify any applicable calculation contained therein as required under this Agreement and shall prepare and deliver a Periodic Remittance Report to Administrative Agent no later than 12:00 p.m. (New York time) two (2) Business Days prior to the Remittance Date. No later than 12:00 p.m. (New York time) one (1) Business Day prior to the Remittance Date, Administrative Agent shall either revise or request that such report be revised in order to correct any information that Administrative Agent believes to be incorrect, or shall authorize such report and deliver payment instructions to the Paying Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Payments from Collection Account</u>. Subject to the terms of the Collection Account Control Agreement, Administrative Agent shall cause Paying Agent to apply all funds on deposit in the Collection Account on each Remittance Date in accordance with the related Periodic Remittance Report and as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>first</u>, to the Administrative Agent, Calculation Agent and Paying Agent on account of any accrued and unpaid fees and permitted expenses (including indemnity amounts) incurred under the Facility Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)<u>second</u>, to the Valuation Agent and Diligence Agent on account of any accrued and unpaid fees and permitted expenses (including indemnity amounts) incurred under the Facility Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)<u>third</u>, pro rata to each Class A Lender on account of unpaid fees (including any Class A Upfront Fee), expenses, interest breakage costs, any outstanding Advance Reduction, Concentration Limit Advance Reduction, and indemnity amounts and any other amounts due to Class A Lenders under the Facility Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)<u>fourth</u>, pro rata to each Class A Lender an amount equal to the Class A Facility Interest which has accrued and is outstanding as of the Remittance Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)<u>fifth</u>, pro rata to each Class A Lender to reduce the outstanding Repayment Amount for each Financed SF Property, if any, that has been sold or transferred to zero ($0);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)<u>sixth</u>, on any date on or after the commencement of the Early Amortization Event Repayment Period, pro rata to each Class A Lender to reduce the Class A Advances Outstanding to zero ($0);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)<u>seventh</u>, to retain in the Collection Account an amount equal to the Class A

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Interest Reserve Amount (calculated as of the last day of the current Pricing Period);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)<u>eighth</u>, pro rata to each Class B Lender on account of unpaid fees (including any Class B Upfront Fee), expenses, interest breakage costs, any outstanding Advance Reduction, Concentration Limit Advance Reduction, and indemnity amounts and any other amounts due to Class B Lenders under the Facility Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)<u>ninth</u>, pro rata to each Class B Lender an amount equal to the Class B Facility Interest which has accrued and is outstanding as of the Remittance Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)<u>tenth</u>, pro rata to each Class B Lender to reduce the outstanding Repayment Amount for each Financed SF Property, if any, that has been sold or transferred to zero ($0);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi)<u>eleventh</u>, on any date on or after the commencement of the Early Amortization Event Repayment Period, pro rata to each Class B Lender to reduce the Class B Advances Outstanding to zero ($0);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii)<u>twelfth</u>, to retain in the Collection Account an amount equal to the Class B Interest Reserve Amount (calculated as of the last day of the current Pricing Period);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii)<u>thirteenth</u>, to Asset Manager on account of any accrued and unpaid fees and permitted expenses incurred under the Facility Documents; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv)<u>fourteenth</u>, any remaining amounts shall be remitted in accordance with the written instructions of Borrower Representative provided to Lender and Paying Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Payment of Remittance Date Shortfalls</u>. If funds in the Collection Account on any Remittance Date are not sufficient to pay in full the amounts required to be paid on such Remittance Date pursuant to <u>Section 4(c)(i)</u> through and including <u>(vi)</u>, then Borrowers shall, on the Business Day immediately following such Remittance Date, pay to Lenders the amount of such shortfall.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Receipt by Administrative Agent</u>. To the extent that Administrative Agent receives any funds from the sale, transfer or other disposition of an SF Property, Administrative Agent shall cause Paying Agent to apply such funds in accordance with the same order of priority set forth in <u>Section 4(c)</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Alternate Rate of Interest</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Subject to <u>clauses (ii)</u>, <u>(iii)</u>, <u>(iv), (v)</u> and <u>(vi)</u> of this <u>Section 4(f)</u>, if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Prior to a Benchmark Replacement Date, the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (A) adequate and reasonable means do not exist for ascertaining Adjusted Daily Simple SOFR or (B) the Administrative Agent is advised by the Required Lenders that Adjusted Daily Simple SOFR will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Advances (or its Advance) included in such Advance; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Prior to the commencement of any Pricing Period for a Term Benchmark Advance, the Administrative Agent determines

(which determination shall be conclusive absent manifest error)

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that (A) adequate and reasonable means do not exist for ascertaining the Adjusted Term SOFR Rate (including because the Term SOFR Reference Rate is not available or published on a current basis) or (B) the Administrative Agent is advised by the Required Lenders that the Adjusted Term SOFR Rate will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Advances (or its Advance) included in such Advance;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone, telecopy or electronic mail as promptly as practicable thereafter and, until (x) the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark or (y) the Borrower delivers a new Advance Request in accordance with the terms of Section 2,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) if a circumstance described in clause (1) above has occurred, any Advance Request that requests a RFR Advance shall instead be deemed to be an Advance Request for a Term Benchmark Advance or (B) if a circumstance described in both clauses (1) and (2) above have occurred, any Advance Request shall instead be deemed to be an Advance Request for an ABR Advance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document other than as expressly set forth in this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Notwithstanding anything to the contrary herein or in any other Loan Document, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document

except as otherwise set forth in this Agreement or any other Loan Document.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)The Administrative Agent will promptly notify the Borrower and the Lenders of (A) any occurrence of a Benchmark Transition Event, (B) the implementation of any Benchmark Replacement, (C) the effectiveness of any Benchmark Replacement Conforming Changes, (D) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (vi) below and (E) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this <u>Section 4(f)</u>, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as otherwise set forth in this Agreement or any other Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)[Reserved].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)Upon the Borrower's receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any request for a RFR Advance of, conversion to or continuation of Term Benchmark Advances to be made, converted or continued during any Benchmark Unavailability Period within five (5) Business Days of such notice and, failing that, the Borrower will be deemed to have converted any request for a RFR Advance into a request for an Advance of or conversion to (A) a Term Benchmark Advance so long as the Term SOFR Rate is not the subject of a Benchmark Transition Event or (B) an ABR Advance if the Adjusted Term SOFR Rate is the subject of a Benchmark Transition Event. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not available, the component of Alternate Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of Alternate Base Rate.

Section 5. <u>Requirements of Law</u>.If any Requirement of Law or any change in the interpretation or application thereof or compliance by Lenders or Administrative Agent with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)shall subject any Lender or Administrative Agent to any Tax (other than

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) Non-Excluded Taxes, (B) Excluded Taxes described in clauses (b) through (d) of the definition of Non-Excluded Taxes and (C) Connection Income Taxes) on payments to any Lender or Administrative Agent in respect thereof, or changes the basis of taxation of

payments to Lender or Administrative Agent of any amounts payable under this Agreement (except for changes in the rate of tax on the overall net income of a

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Lender or Administrative Agent);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)shall impose, modify or hold applicable any reserve, special deposit, compulsory loan, assessment, fee, tax, insurance charge or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, or other extensions of credit by, or any other acquisition of funds by, any office of any Lender or Administrative Agent which is not otherwise included in the determination of the Benchmark hereunder; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)shall impose on any Lender or Administrative Agent any other condition the result of which is to increase the cost (other than Taxes) to a Lender or Administrative Agent of performing its obligations under this Agreement, or to reduce the rate of return on a Lender's capital or assets as a consequence of its obligations under this Agreement, or to reduce the amount of any sum received or receivable by a Lender under this Agreement, or to require any payment calculated by reference to the amount of interests or loans held or interest received by it, or making, continuing or maintaining any Advance or to reduce any amount due or owing hereunder in respect thereof;

then, in any such case, within thirty (30) days after demand by Administrative Agent, Borrowers shall promptly pay Administrative Agent such additional amount or amounts as calculated by Administrative Agent as will compensate such Lender or Administrative Agent for such increased cost or reduced amount receivable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Borrower acknowledges that any Lender may institute measures in anticipation of a Requirement of Law (including, without limitation, the imposition of internal charges on Lender's interests or obligations under this Agreement), and may commence allocating charges to or seeking compensation from Borrower under this <u>Section 5</u> in connection with such measures, in advance of the effective date of such Requirement of Law, and Borrower agrees to pay such charges or compensation to Administrative Agent, for the benefit of such Lender, following demand therefor without regard to whether such effective date has occurred. Borrower further acknowledges that any charge or compensation demanded hereunder may take the form of a monthly charge to be assessed by such Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)If any Lender or Administrative Agent becomes entitled to claim any additional amounts pursuant to this <u>Section 5</u>, Administrative Agent shall provide a certificate of the Lender or Administrative Agent setting forth the amount or amounts necessary to compensate such Lender or Administrative Agent. A certificate as to any additional amounts payable pursuant to this <u>Section 5</u> submitted by Administrative Agent to Borrowers shall be conclusive in the absence of manifest error. The Borrower shall pay such Lender the amount as due on any such certificate on the next Repayment Date following receipt of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Notwithstanding anything in this Agreement to the contrary, failure or delay on the part of any Lender to demand compensation pursuant to this Section 5 shall not constitute a waiver of such Lender's right to demand such compensation.

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Section 6. <u>Taxes</u>.Any and all payments by a Borrower under or in respect of this Agreement or any other Facility Documents to which a Borrower is a party shall be made free and clear of, and without deduction or withholding for or on account of, any and all present or future taxes, levies, imposts, deductions, charges or withholdings (including penalties, interest and additions to tax with respect thereto), whether now or hereafter imposed, levied, collected, withheld or assessed by any taxation authority or other Governmental Authority (collectively, "<u>Taxes</u>"), unless required by law. If a Borrower shall be required under any applicable Requirement of Law to deduct or withhold any Taxes from or in respect of any sum payable under or in respect of this Agreement or any of the other Facility Documents to a Recipient, (i) such Borrower shall make all such deductions and withholdings in respect of Taxes, (ii) such Borrower shall pay the full amount deducted or withheld in respect of Taxes to the relevant taxation authority or other Governmental Authority in accordance with any applicable Requirement of Law, and (iii) in the case of Non-Excluded Taxes, the sum payable by such Borrower shall be increased as may be necessary so that after such Borrower has made all required deductions and withholdings (including deductions and withholdings applicable to additional amounts payable under this <u>Section 6</u>) the Recipient receives an amount equal to the sum it would have received had no such deductions or withholdings been made in respect of Non-Excluded Taxes. For purposes of this Agreement, the term "<u>Non-Excluded Taxes</u>" are Taxes other than any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes that are imposed on or measured by its net income (however denominated), franchise Taxes and branch profits Taxes, in each case, (i) imposed by the jurisdiction (or any political subdivision thereof) under the laws of which such Recipient is organized or has its principal office or, in the case of a Lender, the jurisdiction (or any political subdivision thereof) in which its applicable lending office is located or (ii) that are Other Connection Taxes, (b) Excluded Taxes described in the final two sentences of <u>Section 6(e)</u>, (c) Taxes with respect to which a Lender, pursuant to <u>Section 6(f)</u>, is not entitled to indemnification or additional amounts under <u>Section 6(a)</u> or <u>(c)</u> and (d) any U.S. federal withholding Taxes imposed under FATCA (each Tax described in clauses (a)-(d), an "<u>Excluded Tax</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)In addition, each Borrower hereby agrees to pay any present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Facility Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made at a Borrower's written request) (collectively, "<u>Other Taxes</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Each Borrower hereby agrees to jointly and severally indemnify Paying Agent, Lenders and Administrative Agent for the full amount of Non-Excluded Taxes and Other Taxes imposed on or paid by Paying Agent, any Lender and/or Administrative Agent and any reasonable expenses arising therefrom or with respect thereto. The indemnity by a Borrower provided for in this <u>Section 6(c)</u> shall apply and be made whether or not the Non-Excluded Taxes or Other Taxes for which indemnification hereunder is sought have been correctly or legally imposed or asserted by the relevant Governmental Authority. Amounts payable by Borrowers under the indemnity set forth in this <u>Section 6(c)</u> shall be paid within ten (10) days from the date on which Paying Agent or Administrative Agent makes written demand therefor. A certificate as to the amount of such payment or liability delivered to the Borrowers by a

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Lender, Administrative Agent or Paying Agent, as applicable, shall be conclusive absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Upon the request of Administrative Agent or Paying Agent, Borrowers (or any Person making such payment on behalf of a Borrower) shall furnish to Administrative Agent or Paying Agent, as applicable, for its own account a certified copy of the official receipt evidencing payment thereof, or other evidence of such payment reasonably satisfactory to Administrative Agent or Paying Agent, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)For purposes of <u>subsection (e)</u> of this <u>Section 6</u>, the terms "<u>United States</u>" and "<u>United States person</u>" shall have the meanings specified in Section 7701 of the Code. Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Facility Document shall deliver to Borrowers, Paying Agent and Administrative Agent, on or about the date on which such Lender becomes a Lender under this Agreement and at the time or times reasonably requested by Borrowers, Paying Agent or Administrative Agent, such properly completed and executed documentation reasonably requested by Borrowers, Paying Agent or Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by Borrowers, Paying Agent or Administrative Agent, shall deliver such other documentation prescribed by any Requirement of Law or reasonably requested by Borrowers, Paying Agent or Administrative Agent as will enable Borrowers, Paying Agent or Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Without limiting the generality of the foregoing, each Lender (including for avoidance of doubt any assignee, successor or participant) that has not been informed by Borrowers in writing that such documentation pursuant to Section 6(e) is unnecessary (a "<u>Non-Exempt Lender</u>"), shall deliver or cause to be delivered to Borrowers the following properly completed and duly executed documents:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)in the case of a Non-Exempt Lender that is not a United States person for

U.S. federal income tax purposes that is entitled to provide such form, a complete and executed (x) U.S. Internal Revenue Form W-8BEN or W-8BEN-E with Part II completed in which such Lender claims the benefits of a tax treaty with the United States providing for a zero or reduced rate of withholding (or any successor forms thereto), including all appropriate attachments or (y) a U.S. Internal Revenue Service Form W-8ECI (or any successor forms thereto); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)in the case of an individual, (x) a complete and executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms thereto) and a certificate substantially in the form of <u>Exhibit C</u> (a "<u>Section 6 Certificate</u>") or (y) a complete and executed U.S. Internal Revenue Service Form W-9 (or any successor forms thereto); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)in the case of a Non-Exempt Lender that is organized under the laws of the United States, any State thereof, or the District of Columbia, a complete and executed

U.S. Internal Revenue Service Form W-9 (or any successor forms thereto), including all appropriate attachments; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)in the case of a Non-Exempt Lender that (x) is not organized under the laws of the United States, any State thereof, or the District of Columbia and (y) is treated as a corporation for U.S. federal income tax purposes, a complete and executed U.S. Internal Revenue Service Form W-8BEN-E (or any successor forms thereto) and a Section 6 Certificate; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)in the case of a Non-Exempt Lender that (A) is treated as a partnership or other non-corporate entity, and (B) is not organized under the laws of the United States, any State thereof, or the District of Columbia, (x) a complete and executed U.S. Internal Revenue Service Form W-8IMY (or any successor forms thereto) (including all required documents and attachments), and (y) without duplication, with respect to each of its beneficial owners and the beneficial owners of such beneficial owners looking through chains of owners to individuals or entities that are treated as corporations for U.S. federal income tax purposes (all such owners, "<u>beneficial owners</u>"), the documents that would be provided by each such beneficial owner pursuant to this Section if such beneficial owner were a Lender; <u>provided</u>, <u>however</u>, that no such documents will be required with respect to a beneficial owner to the extent the actual Lender is determined to be in compliance with the requirements for certification on behalf of its beneficial owner as may be provided in applicable U.S. Treasury regulations, or the requirements of this clause (v) are otherwise determined to be unnecessary, all such determinations under this clause (v) to be made in the sole discretion of Borrowers; <u>provided</u>, <u>however</u>, that such Lender shall be provided an opportunity to establish such compliance as reasonable; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)in the case of a Non-Exempt Lender that is disregarded as an entity separate from its owner for U.S. federal income tax purposes, the document that would be provided by its beneficial owner pursuant to this Section if such beneficial owner were a Lender; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)in the case of a Non-Exempt Lender that (A) is not a United States person and (B) is acting in the capacity as an "intermediary" (as defined in U.S. Treasury Regulations), (x) a U.S. Internal Revenue Service Form W-8IMY (or any successor form thereto) (including all required documents and attachments) and (y) if the intermediary is a "non-qualified intermediary" (as defined in U.S. Treasury Regulations), from each person upon whose behalf the "non-qualified intermediary" is acting the documents that would be provided by each such person pursuant to this Section if each such person were a Lender; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)if a payment made to a Lender under any Facility Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to Borrowers, Paying Agent and Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by Borrower, Paying Agent or Administrative Agent such documentation prescribed by any Requirement of Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower, Paying Agent or Administrative Agent as may be necessary for Borrower, Paying Agent or Administrative Agent to comply with

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their obligations under FATCA and to determine that such Lender has complied with such Lender's obligations under FATCA or to determine the amount to deduct and withhold from such payment. Administrative Agent shall notify Paying Agent of any deductions and/or withholdings required to be made under FATCA. Solely for purposes of this clause (viii), "FATCA" shall include any amendments made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Borrowers and Administrative Agent in writing of its legal inability to do so. If at the time a Lender first becomes a party to this Agreement, changes its lending office, or, with respect to a grant of a participation, at the effective date of such participation, is subject to a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be treated as Taxes excluded from "Non-Excluded Taxes" (i.e., each an Excluded Tax) and shall not be Non-Excluded Taxes unless and until such Lender provides the appropriate form certifying that a lesser rate applies, whereupon withholding tax at such lesser rate shall be considered Excluded Taxes solely for the periods governed by such form. If, however, on the date (after the date of this Agreement) a Person becomes an assignee, successor or participant to this Agreement, such Lender transferor was entitled to indemnification or additional amounts under this <u>Section 6</u>, then such Lender assignee, successor or participant shall be entitled to indemnification or additional amounts to the extent (and only to the extent), that such Lender transferor was entitled to such indemnification or additional amounts for Non-Excluded Taxes, and such Lender assignee, successor or participant shall be entitled to additional indemnification or additional amounts for any other or additional Non-Excluded Taxes, in accordance with terms and conditions provided in the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)For any period with respect to which a Lender has failed to provide Borrowers with the appropriate form, certificate or other document described in <u>subsection (e)</u> of this <u>Section 6</u> (other than if such failure is due to a change in any applicable Requirement of Law, or application thereof, occurring after the date on which a form, certificate or other document originally was required to be provided by Administrative Agent, such Lender shall not be entitled to indemnification or additional amounts under <u>subsection (a)</u> or <u>(c)</u> of this <u>Section 6</u> with respect to Non-Excluded Taxes imposed by the United States by reason of such failure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section (including by the payment of additional amounts pursuant to this Section), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the Relevant Governmental Body) in the event that such indemnified party is required to repay such refund to such Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)If any Lender requests compensation under <u>Section 6</u>, or if a Borrower is required

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to pay any Non-Excluded Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to <u>Section 6</u>, then such Lender shall (at the request of Borrower) use reasonable efforts to designate a different lending office for funding or booking its Advances hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment

&nbsp;&nbsp;&nbsp;&nbsp;(i) would eliminate or reduce amounts payable pursuant to <u>Section 5</u> or this <u>Section 6</u>, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Without prejudice to the survival of any other agreement of Borrowers hereunder, the agreements and obligations of Borrowers, Lenders, Paying Agent and Administrative Agent contained in this <u>Section 6</u> shall survive the termination of this Agreement. Nothing contained in this <u>Section 6</u> shall require Administrative Agent or Lenders to make available any of its tax returns or any other information relating to its taxes that it deems to be confidential or proprietary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)For federal income tax purposes each of the Collection Account and the Loan Account will be owned by OFFERPAD SPE BORROWER A, LLC (in such capacity, the "<u>Account Owner</u>"). The Account Owner shall provide Paying Agent with (i) an IRS Form W-9 or appropriate IRS Form W-8 by the Effective Date, and (ii) any additional IRS forms (or updated versions of any previously submitted IRS forms) or other documentation at such time or times required by applicable law or upon the reasonable written request of Paying Agent as may be necessary (a) to reduce or eliminate the imposition of U.S. withholding taxes to the Account Owner and (b) to permit Paying Agent to fulfill its tax reporting obligations under applicable law with respect to the Collection Account or any amounts paid to the Account Owner. If any IRS form or other documentation previously delivered by an Account Owner becomes obsolete or inaccurate in any respect (including without limitation in connection with the transfer of any beneficial ownership interest in Borrower), the Account Owner shall timely provide to Paying Agent accurately updated and complete versions of such IRS forms or other documentation. Wells Fargo, both in its individual capacity and in its capacity as Paying Agent, shall have no liability to the Account Owner or any other person in connection with any tax withholding amounts paid or withheld from the Collection Account pursuant to applicable law arising from the Account Owner's failure to timely provide an accurate, correct and complete IRS Form W-9, an appropriate IRS Form W-8 or such other documentation contemplated under this paragraph.

Section 7. <u>Security Interest; Administrative Agent's Appointment as</u> <u>Attorney-in-Fact.Security Interest and Collateral Assignment</u>.

Each Borrower, to the extent of its rights therein and apart from any Mortgage that may be recorded in the future following the occurrence of a Mortgage Event, hereby pledges on the date hereof to Administrative Agent as security for the repayment of the Secured Obligations and its performance under each Facility Document to which it is a party, and hereby grants, assigns and pledges to Administrative Agent a first priority security interest in all of such Borrower's right, title and interest in, to and under, the Financed SF Properties and all of such Borrower's accounts, deposit accounts, commercial tort claims, documents, goods, payment intangibles,

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general intangibles, chattel paper, instruments, securities, investment property, promissory notes, letters of credit, letter of credit rights, supporting obligations and all other property of any type or nature, wherever located, whether now or hereafter existing, owned or acquired and the proceeds and products thereof, which shall hereinafter be collectively referred to as "<u>Collateral</u>", in each case, whether now owned or hereafter acquired, now existing or hereafter created and wherever located, to secure the repayment of principal of and interest on all Advances and all other amounts owing to Administrative Agent and Lenders hereunder and under the other Facility Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)In furtherance of the foregoing, each Borrower hereby collaterally assigns to Administrative Agent all of such Borrower's right, title to and interest in, to and under (but not any obligations under) any Purchase Agreements, all other related agreements, contracts, takeout commitments, documents and instruments evidencing or guarantying any Collateral and all other agreements, documents and instruments related to or constituting any of the foregoing (the "<u>Assigned Documents</u>"). Each Borrower confirms and agrees that (x) prior to the occurrence of an Event of Default, such Borrower shall enforce its rights and remedies under each Assigned Document, and (y) upon the occurrence of an Event of Default, Administrative Agent (or its designee) shall have the right to enforce each Borrower's rights and remedies under each Assigned Document, but without any obligation on the part of Administrative Agent or its designee to perform any of the obligations of each Borrower under any such Assigned Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Each Borrower hereby authorizes Administrative Agent to file such financing statement or statements relating to the Collateral as Administrative Agent, at its option, may deem reasonable and appropriate, including financing statements that describe the collateral covered thereby as "all assets of such Borrower and the proceeds and products thereof". Borrowers shall pay the filing costs for any financing statement or statements prepared pursuant to this <u>Section 7</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Acquisition of SF Property</u>. Each Borrower shall cause all SF Properties acquired by it to be taken by Deed, or by means of such instruments as is provided by the Governmental Authority governing the transfer, in each case, in the name of the related Borrower and in accordance with the terms of the related SPE Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Administrative Agent's Appointment as Attorney in Fact</u>. Each Borrower hereby irrevocably constitutes and appoints Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney in fact with full irrevocable power and authority in the place and stead of such Borrower, as applicable, and in the name of such Borrower, as applicable, or in its own name, from time to time in Administrative Agent's discretion, for the purpose of carrying out the terms of this Agreement and to take any and all appropriate action and to execute any and all documents and instruments which may be reasonably necessary or desirable to accomplish the purposes of this Agreement, in each case, subject to the terms of this Agreement, and for the avoidance of doubt, such power is only exercisable following the occurrence and continuance of an Event of Default. Without limiting the generality of the foregoing, each Borrower hereby gives Administrative Agent the power and right, on behalf of each Borrower Party, as applicable, without assent by, but with notice to,

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Borrowers, as applicable, if an Event of Default shall have occurred and be continuing, to do the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)in the name of the related Borrower, as applicable, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any other Collateral and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Administrative Agent for the purpose of collecting any and all such moneys due with respect to any other Collateral whenever payable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)to pay or discharge taxes and Liens levied or placed on or threatened against the Collateral; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)(A) to direct any party liable for any payment under any Collateral to make payment of any and all moneys due or to become due thereunder directly to Administrative Agent or as Administrative Agent shall direct, including any payment agent with respect to any Collateral; (B) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (C) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Collateral; (D) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any proceeds thereof and to enforce any other right in respect of any Collateral; (E) to defend any suit, action or proceeding brought against a Borrower with respect to any Collateral; (F) to settle, compromise or adjust any suit, action or proceeding described in clause (E) above and, in connection therewith, to give such discharges or releases as Administrative Agent may deem appropriate; and (G) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Collateral as fully and completely as though Administrative Agent were the absolute owner thereof for all purposes, and to do, at Administrative Agent's option and Borrowers' expense, at any time, and from time to time, all acts and things which Administrative Agent deems necessary to protect, preserve or realize upon the Collateral and Administrative Agent's Liens thereon and to effect the intent of this Agreement, all as fully and effectively as a Borrower might do.

Each Borrower hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable. In addition to the foregoing, each Borrower agrees to execute a Power of Attorney to be delivered on or prior to the initial Funding Date. Borrowers and Administrative Agent acknowledge that the Powers of Attorney shall terminate on the Facility Termination Date and satisfaction in full of the Secured Obligations. The powers conferred on Administrative Agent under this <u>Section 7(c)</u> and under the Power of Attorney are solely to protect Administrative Agent's interests in the Financed SF Properties and shall not impose any duty upon it to exercise any such powers and such powers shall only be exercised by Administrative Agent upon the occurrence and continuance of an Event of Default.

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Borrowers also authorize Administrative Agent, if an Event of Default shall have occurred and be continuing, from time to time, to execute, in connection with any sale provided for in <u>Section 14</u> hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral.

The powers conferred on Administrative Agent hereunder are solely to protect Administrative Agent's interests in the Collateral and shall not impose any duty upon it to exercise any such powers. Administrative Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to Borrowers for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct.

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Section 8. <u>Payment, Transfer and Custody</u>. Unless otherwise mutually agreed in writing, all transfers of funds to be made by any Borrower hereunder or under any Facility Document shall be made in Dollars, by wire transfer in immediately available funds, without deduction, set-off or counterclaim, to Administrative Agent at the following account maintained by Administrative Agent at JPMorgan Chase Bank, N.A.: City, State: New York, N.Y., ABA #: 021-000-021, Account Name: Loan Department Early, Account Number: 099999090, Reference: ABS Offerpad, Attention: Sophia Redzaj, not later than 4:00 p.m. (New York City time), on the date on which such payment shall become due (and each such payment received after such time shall be deemed to have been made on the Business Day next succeeding the date of receipt by Administrative Agent of such payment). Each Borrower acknowledges that it has no rights of withdrawal from the foregoing account. Any payment required to be made by any Party hereunder that is received after the date or time otherwise required to be received shall not be deemed received late if such delay is due solely to delays in the federal wire transfer system that are beyond the control of the Party initiating such wire transfer.<u>Authorizations</u>. Any of the persons whose signatures and titles appear on <u>Schedule 1</u> are Authorized Representatives, acting singly, to act for Borrowers, Lenders or Administrative Agent, as applicable under this Agreement.<u>Fees</u>. Borrowers shall pay to Administrative Agent all amounts due and owing as set forth in this Agreement, including the Administrative Agent Fee, the Upfront Fees and the Unused Fees. The Upfront Fees, and, subject to the provisions of clause (a) below of this Section 10, the Unused Fees and all other fees payable under any Facility Document are non-refundable once earned, and such payment shall be made in Dollars, by wire transfer in immediately available funds, without deduction, set-off or counterclaim, to Administrative Agent at such account designated by Administrative Agent; provided that in the case of the Upfront Fees, Administrative Agent and each Lender may at their option net the amount of such Upfront Fee against the amount of the initial Advance by such Lender under this Agreement.<u>Class A Unused Fees</u>. In addition to any fees or other amounts payable by the Borrowers to Administrative Agent and Lenders, on a monthly basis, the Borrowers agree to pay to Administrative Agent, for distribution to each Class A Lender in proportion to that Class A Lender's Pro Rata Share, for each day during the period commencing on the Closing Date and continuing to and excluding the Facility Termination Date, a fee ("<u>Class A Unused Fee</u>") equal to the product of (i) the Class A Unused Fee Rate on such day divided by 360 and (ii) the difference between the Class A Committed Facility Amount and the Class A Advances Outstanding on that day, payable in arrears on each Remittance Date with respect to the related Pricing Period. For the avoidance of doubt, no Unused Fee shall be due in connection with an Optional Repayment by Borrowers of all Class A Advances Outstanding and the termination of the Class A facility.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Class B Unused Fees</u>. In addition to any fees or other amounts payable by the Borrowers to Administrative Agent and Lenders, on a monthly basis, the Borrowers agree to pay to Administrative Agent, for distribution to each Class B Lender in proportion to that Class B Lender's Pro Rata Share, for each day during the period commencing on the Closing Date and continuing to and excluding the Facility Termination Date, a fee ("<u>Class B Unused Fee</u>") equal to the product of (i) the Class B Unused Fee Rate on such day divided by 360 and (ii) the difference between the Class B Committed Facility Amount and the Class B Advances Outstanding on that day, payable in arrears on each Remittance Date with respect to the related Pricing Period. For the avoidance of doubt, no Unused Fee shall be due in connection with an Optional Repayment by Borrowers of all Class B Advances Outstanding and the termination of the Class B facility.

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Section 11. <u>Representations</u>. Each Borrower represents and warrants to Administrative Agent that, as to itself, as of each Funding Date and as of the date of this Agreement:<u>Due Organization and Qualification</u>. Borrower is duly organized, validly existing and in good standing under the laws of the jurisdiction under whose laws it is organized. Borrower is duly qualified to do business, is in good standing and has obtained all necessary licenses, franchises, permits, charters, registrations and approvals necessary for the conduct of its business as currently conducted and the performance of its obligations under the Facility Documents except where any failure to obtain such a license, franchise, permit, charter, registration or approval could not reasonably be expected to cause or be likely to cause a Material Adverse Effect. Borrower's location (within the meaning of Article 9 of the UCC), and the office where Borrower keeps all records (within the meaning of Article 9 of the UCC) relating to the Eligible SF Properties is at the address of Borrower referred to in <u>Schedule 1</u>, as such <u>Schedule 1</u> may be amended from time to time upon thirty (30) days' prior written notice. Borrower has not changed its name or location within the past twelve (12) months. Borrower's organizational identification number is as listed in <u>Schedule 3</u> or Borrower's Joinder Agreement, as applicable. The fiscal year of Borrower is the calendar year. Borrower has not engaged in any activities since its formation other than as contemplated in, or permitted under, the Facility Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Power and Authority</u>. Borrower has all necessary power and authority to conduct its business as currently conducted, to execute, deliver and perform its obligations under the Facility Documents and to consummate the transactions therein contemplated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Due Authorization</u>. The execution, delivery and performance of the Facility Documents by Borrower have been duly authorized by all necessary action and do not require any additional approvals or consents or other action by or any notice to or filing with any Person other than any that have heretofore been obtained, given or made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Non-contravention</u>. None of the execution and delivery of the Facility Documents by Borrower or the consummation of the transactions therein contemplated:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)conflicts with, breaches or violates any provision of the organizational documents or material agreements of Borrower or any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award currently in effect having applicability to Borrower or its properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)constitutes a material default by Borrower under any loan or repurchase agreement, mortgage, indenture or other agreement or instrument to which Borrower is a party or by which it or any of its properties is or may be bound or affected; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)results in or requires the creation of any lien upon or in respect of any of the assets of Borrower except the lien relating to the Facility Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Legal Proceeding</u>. There is no action, proceeding, suit, arbitration or investigation by or before any court, governmental or administrative agency or arbitrator

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affecting any Financed SF Property, Borrower, Guarantor or any Affiliates of Borrower or Guarantor, pending or, to Borrower's knowledge, threatened, which (i) could reasonably be expected to have a Material Adverse Effect on any Borrower Party, (ii) which questions the validity or enforceability of any of the Facility Documents or any action to be taken in connection with the transactions contemplated thereby or (iii) which seeks to prevent the Advance or the pledge of any Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Valid and Binding Obligations</u>. Each of the Facility Documents to which Borrower is a party, when executed and delivered by Borrower, will constitute the legal, valid and binding obligations of Borrower, enforceable against Borrower, in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and general equitable principles (regardless of whether enforcement is sought in a proceeding in equity or at law).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)<u>Financial Statements</u>. The audited balance sheet of Guarantor as at the fiscal year most recently ended for which such audited balance sheet is available, and the related audited statements of income and retained earnings and of cash flows for the fiscal year then ended, setting forth in each case in comparative form the figures for the previous year, reported on without a "going concern" or like qualification arising out of the audit conducted by Guarantor's independent certified public accountants, copies of which have been furnished to Administrative Agent, (i) are, as of the dates and for the periods referred to therein, complete and correct in all material respects, (ii) present fairly the financial condition and results of operations of Guarantor as of the dates and for the periods indicated and (iii) have been prepared in accordance with GAAP, consistently applied, except as noted therein (subject as to interim statements to normal year-end adjustments and the absence of footnotes). Except as disclosed in such Financial Statements, Guarantor is not subject to any contingent liabilities or commitments that, individually or in the aggregate, have a reasonable possibility of causing a Material Adverse Effect with respect to Guarantor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)<u>Accuracy of Information</u>. The information, reports, certificates, documents, financial statements, operating statements, forecasts, books, records, files, exhibits and schedules furnished by or on behalf of Borrower to Administrative Agent in connection with the Facility Documents, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not materially misleading. All projections will be based on reasonable estimates prepared and presented in good faith, on the date as of which such information is stated or certified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>No Consents</u>. No material consent, license, franchises, approval or authorization from, or registration, filing or declaration with, any regulatory body, administrative agency, or other governmental instrumentality, nor any consent, approval, waiver or notification of any creditor, lessor or other non-governmental person, is required in connection with the execution, delivery and performance or consummation by Borrower of this Agreement or any other Facility Documents, other than any that have heretofore been obtained, given or made.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)<u>Compliance With Law, Etc</u>. No practice, procedure or policy employed or proposed to be employed by Borrower Parties in the conduct of its business or pursuant to the Facility Documents violates any law, regulation, judgment, agreement, regulatory consent, order or decree applicable to it, which, if enforced, would have a reasonable possibility of resulting in a Material Adverse Effect with respect to Borrower Parties. None of Borrower nor any Subsidiaries or Parents of Borrower, nor to the knowledge of Borrower, any Affiliates of Borrower (i) is in violation of any Sanctions or (ii) is a Sanctioned Target. The proceeds of any Advance have not been and will not be used, directly or, to Borrower's knowledge after due inquiry, indirectly, to fund any operations in, finance any investments or activities in or make any payments to a Sanctioned Target or otherwise in violation of Sanctions, Anti-Corruptions Laws or Anti-Money Laundering Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)<u>Solvency; Fraudulent Conveyance</u>. Each of Borrower and Guarantor is Solvent and will not be rendered not Solvent by any Advance and, after giving effect to any such Advance, Borrower will not be left with an unreasonably small amount of capital with which to engage in its business. Borrower does not intend to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they mature. Borrower is not contemplating the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of Borrower or any of its assets. The receipt of an Advance and pledge of the Financed SF Properties subject hereto is not undertaken with the intent to hinder, delay or defraud any of the creditors of Borrower or Guarantor. Neither Borrower nor Guarantor is or has ever been the subject of any proceedings of the type referred to in the definition of "Insolvency Event" hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)<u>Investment Company Act Compliance</u>. Neither Borrower nor Guarantor is required to be registered as an "investment company" as defined under the Investment Company Act nor as an entity under the control of an "investment company" as defined under the Investment Company Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)<u>Taxes</u>. Each Borrower-Related Party has filed (or obtained effective extensions for filing) all required income tax returns and all other material tax returns, domestic and foreign, required to be filed by it, including mortgage recording taxes, and has paid all taxes (including mortgage recording taxes and other Property Taxes), and any assessments payable by them, or with respect to any of their properties or assets which have become due unless, in each case, the same are not delinquent and are being contested in accordance with <u>Section 12(p)</u> and such non-payment would not reasonably be expected to have a Material Adverse Effect. There is no material action, suit, proceeding, investigation, audit or claim relating to any such taxes now pending or, to its knowledge, threatened by any Governmental Authority against any it, which is not being contested in good faith as provided above.

The Lenders and the Borrowers hereby agree that the Lenders will use good faith efforts to apply customary and market apportionment principles to the aggregate amount secured by each individual Mortgage so that the amount secured by such Mortgage does not exceed 125% of current value of the associated SF Property.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)<u>No Broker</u>. Borrower has not dealt with any broker, investment banker, agent, or other Person, except for Administrative Agent, who may be entitled to any commission or compensation in connection with the receipt of the Advances and pledge of the Financed SF Properties pursuant to this Agreement; <u>provided</u>, that if Borrower has dealt with any broker, investment banker, agent, or other Person, except for Administrative Agent, who may be entitled to any commission or compensation in connection with the receipt of the Advances and pledge of the Financed SF Properties pursuant to this Agreement, such commission or compensation shall have been paid in full by Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)<u>Regulation T, U and X</u>. Borrower is not engaged principally, or as one of its major activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no part of the proceeds of any Advance hereunder will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock. The use of all funds acquired by Borrower under this Agreement will not conflict with or contravene any of Regulations T, U or X promulgated by the Board of Governors of the Federal Reserve System as the same may from time to time be amended, supplemented or otherwise modified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)<u>ERISA</u>. No Event of ERISA Termination has occurred or is reasonably expected to occur that would reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)<u>Subsidiaries</u>. Borrower has no Subsidiaries. Pledgor directly owns 100% of the equity interests in Borrower. Guarantor directly owns 100% of the equity interests in Pledgor. Such equity interests have been duly authorized and validly issued and are fully paid and non-assessable. There is no existing option, warrant, call, right, commitment or other agreement to which Borrower or Pledgor is a party requiring, and none of such equity interests outstanding, which upon conversion or exchange, would require the issuance by it of its equity interests or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase, its equity interests. The equity interests in the Borrower has been pledged by the Pledgor to Administrative Agent for the benefit of the Lenders pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)<u>Other Credit Facilities and Debts</u>. As of the Effective Date, Borrower is not an obligor under any Indebtedness other than any Indebtedness contemplated by the Facility Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)<u>Title to Properties</u>. Borrower has good, valid insurable (in the case of real property) and marketable title to all of its properties and assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)<u>Regulatory Action</u>. Borrower is not currently under investigation and no investigation by any federal, state or local government agency is threatened. Borrower has not been the subject of any government investigation which has resulted in the voluntary or involuntary suspension of a license, a cease and desist order, or such other action as could reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)<u>Anti-Money Laundering Laws</u>. The operations of Borrower are, and have been, conducted at all times in compliance with all applicable Anti-Money Laundering Laws and Anti-Corruption Laws. No litigation, regulatory or administrative proceedings

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of or before any court, tribunal or agency with respect to any Anti-Money Laundering Laws or Anti-Corruption Laws have been started or (to the best of its knowledge and belief) threatened against Borrower or to the knowledge of Borrower any Affiliates of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)<u>OFAC</u>. None of Borrower, any Subsidiaries or Parents of Borrower nor to the knowledge of Borrower, any Affiliates of Borrower (A) is a Sanctioned Target, (B) is controlled by or is acting on behalf of a Sanctioned Target, (C) to the best knowledge of Borrower after due inquiry, is under investigation for an alleged breach of Sanctions by a governmental authority that enforces Sanctions, (D) has any of its assets in Sanctioned Targets, (E) derives any of its operating income from investments in, or transactions with Sanctioned Targets, (F) has been previously indicted for or convicted of any felony involving a crime or crimes of moral turpitude or for any Patriot Act Offense, or (G) is currently under investigation by any Governmental Authority for alleged felony involving a crime of moral turpitude. For purposes hereof, the term "<u>Patriot Act Offense</u>" shall mean any violation of the criminal laws of the United States of America or of any of the several states, or that would be a criminal violation if committed within the jurisdiction of the United States of America or any of the several states, relating to terrorism or the laundering of monetary instruments, including any offense under (A) the criminal laws against terrorism; (B) the criminal laws against money laundering, (C) the Bank Secrecy Act, as amended, (D) the Money Laundering Control Act of 1986, as amended, or (E) the Patriot Act. "<u>Patriot Act Offense</u>" also includes the crimes of conspiracy to commit, or aiding and abetting another to commit, a Patriot Act Offense. The proceeds of any Advance will not be used and have not been used to fund any operations in, finance any investments or activities in or make any payments to, a Sanctioned Target.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w)<u>Insurance</u>. Borrowers have delivered to Administrative Agent evidence of all insurance policies necessary to satisfy the Insurance Requirements in accordance with <u>Section</u> <u>2(c)(xii)</u>. All such policies are in full force and effect. No claims have been made that are currently pending, outstanding or otherwise remain unsatisfied under any such insurance policies with respect to such claims the related insurer has indicated a defense to payment or any unwillingness to pay such claim, which defense or unwillingness to pay is reasonably expected to result in non-payment in full or in part of such claim and any such failure to pay such claim could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. With respect to any such insurance policy, there has been no act or omission that that would impair the coverage of such policy, the benefits of the endorsement or the validity and binding effect of either in any material respect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)<u>Eligible Borrower</u>. Borrower is an Eligible Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y)<u>No Default</u>. No Default, Event of Default or Early Amortization Event has occurred and is continuing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z)<u>Jurisdiction of Organization</u>. On the Funding Date for the initial Advance hereunder, Borrower's jurisdiction of organization is the State of Delaware. Each Borrower shall provide Administrative Agent with thirty (30) days advance written notice

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of any change in such Borrower's jurisdiction. No Borrower has a trade name.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) <u>Location of Books and Records</u>. The location where Borrower keeps its physical (non-electronic) books and records, including all computer tapes and records relating to the Eligible SF Properties is 2150 E. Germann Road, Suite 1, Chandler, AZ 85286 or any other location from time to time notified by Borrowers to Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) <u>No Contractual Obligations</u>. Other than (x) the Facility Documents and any arm's-length commercial agreements and documents executed by any Borrower-Related Party related thereto or in connection therewith with respect to purchase or sale transactions relating to the SF Properties (in each case that do not violate any other Section of this Agreement (including but not limited to <u>Section 12(r)</u>)) and (y) its Governing Documents, as of the date of this Agreement, Borrower (i) is not subject to any Contractual Obligations and has not entered into any agreement, instrument or undertaking by which it or its assets are bound (other than certain service agreements entered into by Borrower and its Independent Manager on or prior to the Closing Date and certain registered agent service agreements entered into by Borrower and its registered agent for service of process), and (ii) has not incurred any Indebtedness, and prior to the date of this Agreement, Borrower has not entered into any Contractual Obligation, or any agreement, instrument or undertaking by which it or its assets are bound or incurred any Indebtedness (other than certain service agreements entered into by Borrower and its Independent Manager on or prior to the Closing Date and certain registered agent service agreements entered into by Borrower and its registered agent for service of process) other than Indebtedness which has been repaid in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) <u>Adverse Selection</u>. Borrower has not selected any SF Property, whether individually or together with any other SF Property, in a manner adverse to Administrative Agent or in a manner that results, as of the time of submission of the related Advance Request by Borrower, in Lenders financing any SF Property that is of lesser quality than assets pledged to other lenders pursuant to any other facility to which a Borrower Party is a party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) <u>No Reliance</u>. Borrower has made its own independent decisions to enter into the Facility Documents and request each Advance and as to whether such Advance is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary. Borrower is not relying upon any advice from Administrative Agent or any Lender as to any aspect of the Advances, including without limitation, the legal, accounting or tax treatment of such Advances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) <u>True Sale</u>. Each Financed SF Property was acquired by Borrower from a transferor on a legal true sale or true contribution basis pursuant to a market standard purchase and/or sale agreement between Borrower and such transferor. With respect to each SF Property acquired by Borrower from an Affiliate thereof, (a) such Transferor received reasonably equivalent value in consideration for the transfer of such SF Property (which for the avoidance of doubt, the parties hereto agree that equivalent value shall

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include, but not be limited to, any increase in value of the Capital Stock in Borrower held by the Pledgor as a result of transferring

such SF Property pursuant to a capital contribution), (b) no such transfer was made for or on account of an antecedent debt owed by such Transferor to Borrower and (c) no such transfer is or may be voidable or subject to avoidance under the Bankruptcy Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) <u>Mortgage Documents; No Pledge</u>. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid under applicable Requirements of Law in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Mortgage Documents recorded following a Mortgage Event with respect to Financed SF Property, including the Mortgages, will be timely paid or are being paid simultaneously herewith. Other than the security interest granted to Administrative Agent pursuant to this Agreement or any Mortgages that are recorded following a Mortgage Event, as applicable, Borrower has not pledged, assigned, collaterally assigned, sold, granted a security interest in, or otherwise conveyed any of the Collateral except to the extent expressly permitted by the terms hereof. Borrower has not authorized the filing of and is not aware of any effective UCC financing statements filed against Borrower as debtor that include the Collateral, other than any financing statement that has been terminated or filed pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gg) <u>Security Interest</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Borrower has not assigned, pledged, or otherwise conveyed or encumbered any of its Collateral to any other Person except as permitted by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Immediately prior to the pledge of a Financed SF Property to Administrative Agent, Borrower was the sole owner of such Financed SF Property and had good and marketable title thereto, free and clear of all Liens, in each case except for Liens to be released simultaneously with the pledge to Administrative Agent hereunder and Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)The provisions of this Agreement are effective to create in favor of Administrative Agent a valid and effective security interest in all right, title and interest of Borrower in, to and under the Collateral (other than any Mortgage that are not recorded prior to the occurrence and continuance of a Mortgage Event).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)With respect to the security interest granted by Borrower in <u>Section 7</u>, upon the filing of the UCC financing statements in the appropriate offices against Borrower, such security interest shall be a valid first priority perfected security interest in the related Collateral to the extent such security interest can be perfected by filing such a financing statement or under the UCC. The Mortgage Documents, when properly recorded and/or filed in the appropriate records, following the occurrence and continuance of a Mortgage Event, will create (x) a valid, first priority, perfected Lien on Borrower's interest in the Financed SF Property, and (y) perfected security interests in and to, and perfected collateral assignments of, all personalty, all in accordance with the terms thereof, in each case, subject only to the Permitted Liens.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hh) <u>True and Complete Disclosure</u>. All information, reports, financial statements, exhibits, schedules and certificates furnished in writing by or on behalf of Borrower or any of its Affiliates thereof or any of their officers to Administrative Agent in connection with the negotiation, preparation or delivery of this Agreement and the other Facility Documents or

included herein or therein or delivered pursuant hereto or thereto and during Administrative Agent's diligence of Borrower, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified, and Borrower acknowledges that Administrative Agent has not verified the accuracy of any of such information or data. Except as set forth on <u>Schedule 6</u> hereto, there is no fact known to a Responsible Officer of Borrower, after due inquiry, that could be expected to have a Material Adverse Effect. Borrowers shall update such <u>Schedule 6</u> promptly upon knowledge of any such fact.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)<u>Environmental Matters</u>. (i) There is no past or present non-compliance with Environmental Laws, or with permits issued pursuant thereto, in connection with any SF Property which has not been fully addressed and/or remediated in accordance with Environmental Laws or in accordance with any requirements imposed by any Governmental Authority, except for those that could not, either individually or in the aggregate, be expected to have a Material Adverse Effect and (ii) except as otherwise disclosed to Administrative Agent, it does not have any knowledge of, nor has it received, any written notice from any inspector, contractor, property manager, agent of any property manager or Governmental Authority relating to Hazardous Materials or remediation in connection with any SF Property, of liability of any Person pursuant to any Environmental Laws or any actual administrative or judicial proceedings in connection with any of the foregoing, except for those that could not, either individually or in the aggregate, be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jj) <u>Special Purpose Entities</u>. Each of the Borrower Parties is a Special Purpose

Entity.

Section 12. <u>Covenants of Borrower</u>. On and as of the date of this Agreement and each Funding Date and on each day until this Agreement is no longer in force, each Borrower covenants, as to itself, as follows:<u>Notice of Defaults and Proceedings</u>. Borrower shall promptly (unless otherwise set forth herein) notify Administrative Agent of the occurrence of any of the following of which a Responsible Officer of Borrower has knowledge or receives notice of, together with a certificate of a Responsible Officer of Borrower setting forth details of such occurrence and any action Borrower has taken or proposed to take with respect thereto:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the occurrence of any Default, Event of Default or any Early Amortization Trigger;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Borrower will promptly, and in any event within twenty (20) Business Days

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after service of process on any of the following, give to Administrative Agent, notice of all litigation, actions, suits, arbitrations, investigations (including any of the foregoing which are threatened or pending) or other legal or arbitrable proceedings, that is not insured against, affecting (x) Borrower, or affecting any of the assets of Borrower before any Governmental Authority that (A) questions or challenges the validity or enforceability of any of the Facility Documents or any action to be taken in connection with the transactions contemplated hereby or (B) makes a claim individually in an amount greater than $1,000,000, and (y) Borrower or affecting any of the assets of

Borrower before any Governmental Authority that, individually or in the aggregate, if adversely determined, could be reasonably likely to have a Material Adverse Effect. Borrower will promptly provide notice of any judgment that is not insured against, which with the passage of time, could cause an Event of Default hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the occurrence of any financial event which could be reasonably likely to have a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)the filing by or on behalf of Borrower of any material insurance claims with respect to the Financed SF Properties; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Borrower shall promptly, and in any event within three (3) Business Days after obtaining knowledge that a Financed SF Property is an Ineligible SF Property, give notice to Administrative Agent that a Financed SF Property is an Ineligible SF Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Reporting</u>. Borrower shall maintain a system of accounting established and administered in accordance with GAAP, and Borrower shall furnish to Administrative Agent within the time period specified:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)within sixty (60) days after the last day of each fiscal quarter of each fiscal year of Guarantor, Guarantor's unaudited consolidated Financial Statements, including a balance sheet, income statement and cash flow statement, each as of the end of such fiscal quarter and in each case presented fairly in accordance with GAAP, in each case, in comparative form, the figures for the prior period, if available;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)within one hundred twenty (120) days after the last day of its fiscal year, commencing with the 2021 fiscal year, Guarantor's consolidated, audited Financial Statements for such fiscal year, presented fairly in accordance with GAAP, in each case, in comparative form, the figures for the prior period, if available, and accompanied, in all cases, by an unqualified report from an independent public accountant of nationally recognized standing which shall state that said Financial Statements fairly present the financial condition and results of operations of Guarantor as at the end of and for such fiscal year in accordance with GAAP;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)on each Remittance Date, a compliance certificate, substantially in the form of <u>Exhibit H</u> hereto or such other form as approved by Administrative Agent in its sole discretion, executed by a Responsible Officer of Borrower and covering the immediately

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preceding calendar month or such other applicable period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)on the second (2nd) Business Day of each calendar week, a weekly property management report of Borrower in the form attached hereto as <u>Exhibit D</u>, setting forth information (with respect to the immediately preceding week) regarding all of the Financed SF Properties; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)promptly, from time to time, such other information regarding the business affairs, operations and financial condition of Borrower and Guarantor as Administrative Agent may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Fundamental Changes</u>. Other than in connection with activities contemplated by <u>Section 2(g)(ii)</u>, or as otherwise consented to by Administrative Agent in writing, Borrower shall not enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) or sell all or substantially all of its assets; <u>provided</u>, that any party may merge or enter into any of the aforementioned transactions with Borrower so long as Borrower is the surviving entity and no Change in Control results from such transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Maintenance of Property and Insurance</u>. Borrower shall, other than property retired for obsolescence, (a) keep all property useful and necessary in its business in good working order and condition, (b) maintain insurance that complies with the Insurance Requirements, and (c) furnish to Administrative Agent upon request information and certificates with respect to such insurance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>No Material Adverse Claims</u>. Borrower warrants and will defend all Collateral against all material adverse claims and demands (excluding any Permitted Liens).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Assignment</u>. Except as permitted herein, Borrower shall not sell, assign, transfer or otherwise dispose of, or grant any option with respect to, or pledge, hypothecate, contract, create, incur, assume, permit to exist or grant a security interest in or lien on or otherwise encumber (except pursuant to the Facility Documents), any of the Collateral or any interest therein or grant, allow or enter into any agreement or arrangement with any Person that prohibits or restricts or purports to prohibit or restrict the granting of any Lien on any of the foregoing; provided that this <u>Section 12(f)</u> shall not prevent any transfer of any Collateral (including any SF Property) in accordance with the Facility Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)<u>Security Interest</u>. Borrower shall do all things necessary or required by the Facility Documents or Requirements of Law, or as requested by Administrative Agent to preserve (i) the Collateral so that it remains subject to a perfected first priority security interest hereunder (which shall apply to any Mortgage Document only after such Mortgage Documents have been recorded in accordance with <u>Section 2(l)</u>) and (ii) the Pledged Collateral so that it remains subject to a perfected first priority security interest under the Pledge Agreement, including executing or causing to be executed (A) such other instruments or notices as may be necessary or appropriate and filing and maintaining effective UCC financing statements, continuation statements and assignments and amendments thereto and (B) all documents necessary to collaterally assign to Administrative Agent all rights (but none of the obligations) of Borrower under each Purchase

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Agreement as set forth in <u>Section 7(a)(i)</u> (which shall apply to any Mortgage Document only after such Mortgage Documents have been recorded in accordance with <u>Section 2(l)</u>).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)<u>Records</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Borrower shall collect and maintain or cause to be collected and maintained all Records relating to the Financed SF Properties in accordance with industry custom and practice for assets similar to the SF Properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Upon reasonable advance written notice from Administrative Agent, Borrower shall (x) make any and all such Records related to the Financed SF Properties available to Administrative Agent to examine any such Records, either by its own officers or employees, or by agents or contractors, or both, and make copies of all or any portion thereof, and (y) permit Administrative Agent or its authorized agents to discuss the affairs, finances and accounts of Borrower with its chief operating officer and chief financial officer at a time mutually agreed in advance by all parties and to discuss the affairs, finances and accounts of Borrower with its independent certified public accountants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Books</u>. Borrower shall keep or cause to be kept proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities to the extent necessary to prepare its financial statements in conformity with GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)<u>Approvals</u>. Borrower shall preserve and maintain its legal existence and all material rights, material privileges, material licenses, material permits or other material approvals necessary for Borrower to conduct its business and to perform its obligations under the Facility Documents, and Borrower shall conduct its business in accordance with all Requirements of Law, in each case, where the failure to maintain such material licenses, permits or other approvals or comply with such Requirements of Law could result in an impairment of Administrative Agent's rights hereunder, including Administrative Agent's security interest in the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)<u>Change in Business</u>. Borrower shall not make any material change in the nature of its business as conducted on the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)<u>Distributions</u>. If an Event of Default or an Early Amortization Event has occurred and is continuing or would result therefrom, Borrower shall not pay any dividends with respect to any Capital Stock or other equity interests in such entity (other than distributions on account of income taxes following an Early Amortization Event), whether now or hereafter outstanding, or make any other distribution in respect thereof (other than distributions on account of income taxes following an Early Amortization Event), either directly or indirectly, whether in cash or property or in obligations of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)<u>Requirements of Law</u>. Borrower shall comply with all Requirements of Law except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. No part of the proceeds of any transaction shall be used for any purpose that violates Regulations T, U or X of the Board of Governors of the Federal Reserve System.

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Borrower shall conduct diligence to confirm that no Transferor, at the time of transfer, is a Sanctioned Target. The proceeds of any transaction shall not be used, directly or indirectly, for any purpose which would breach any Anti-Corruption Laws, any Anti-Money Laundering Laws or Sanctions. Borrower shall (i) conduct its business in compliance with applicable Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions; and (ii) maintain policies and procedures designed to promote and achieve compliance with applicable Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions. The repayment of any Advance or any other payment due to Administrative Agent under this Agreement or any other Facility

Document shall not be funded, directly or, to Borrower's knowledge after due inquiry, indirectly, with proceeds derived from a transaction prohibited by Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions or in any manner that would cause Borrower, or to the knowledge of Borrower, any Affiliates of Borrower to be in breach of any Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions. The proceeds of any Advance hereunder will not, directly or, to Borrower's knowledge after due inquiry, indirectly, be used to lend, contribute, or otherwise made available: (i) to fund any activities or business of or with a Sanctioned Target, or

&nbsp;&nbsp;&nbsp;&nbsp;(ii) be used in any manner that would be prohibited by Sanctions or would otherwise cause Administrative Agent to be in breach of any Sanctions. Borrower shall notify Administrative Agent in writing not more than three (3) Business Days after becoming aware of any breach of <u>Section 11(u)</u>, <u>Section 11(v)</u> or this <u>Section 12(m)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)<u>Chief Executive Office; Jurisdiction of Organization</u>. Borrower shall not change its name, organizational number or jurisdiction of organization (or have more than one such jurisdiction), move the location of its principal place of business and chief executive office, as defined in the UCC) from the location referred to in <u>Section 11</u>, unless in each case Borrower has provided Administrative Agent thirty (30) days' prior written notice of such move or change and has taken all actions required under the UCC to continue the first priority perfected security interest of Administrative Agent in the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)<u>Taxes</u>. Borrower shall (i) timely file all federal, income and other material state and local tax returns that are required to be filed by them and shall timely pay and discharge all taxes, assessments and governmental charges or levies reflected as due on such returns and all other federal, income and other material state and local taxes, assessments and governmental charges and levies imposed on it or on its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained. In addition, Borrower shall pay, or shall cause to be paid, all Property Taxes and Other Charges now or hereafter levied or assessed or imposed against any Property or any part thereof as the same become due and payable and (ii) upon request, shall make available to Administrative Agent receipts or other evidence for the payment of such Property Taxes and the Other Charges prior to the date the same shall become delinquent. Notwithstanding the foregoing, any Borrower may, at its own expense, contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the amount or validity or application in whole or in part of any Property Taxes, Other Charges or other charge provided that (i) no Event of Default has occurred and is continuing; i) such proceeding shall be permitted under and be conducted in accordance with the provisions

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of any other instrument to which Borrowers are subject and shall not constitute a default thereunder and such proceeding shall be conducted in accordance with all Requirements of Law; ii) neither the Collateral nor any SF Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost; iii) it shall promptly upon final determination thereof pay the amount of any such Property Taxes or Other Charges, together with all costs, interest and penalties which may be payable in connection therewith; iv) such proceeding shall suspend the collection of such contested Property Taxes or Other Charges, from the released SF Property; v) appropriate reserves have been established in accordance with GAAP; and (vii) it shall furnish such security as may be required in the proceeding to insure the payment of any such Property Taxes or Other Charges, together with all interest and penalties thereon.

Administrative Agent may apply such security or part thereof held by it at any time when, in its judgment, the validity or applicability of such Property Taxes or Other Charges are established or the SF Property or any other of its asset (or part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, cancelled or lost or there shall be any danger of the Lien granted hereunder being primed by any related Lien.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)<u>Transactions with Affiliates</u>. Borrower will not (A) enter into any transaction, including any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction is (a) not otherwise prohibited in this Agreement or as contemplated by the Facility Documents, (b) in the ordinary course of Borrower's business and

&nbsp;&nbsp;&nbsp;&nbsp;(c) upon fair and reasonable terms no less favorable to Borrower than it would obtain in a comparable arm's length transaction with a Person which is not an Affiliate, or (B) make a payment that is not otherwise permitted by this <u>Section 12(p)</u> to any Affiliate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)<u>No Pledge</u>. Borrower shall not pledge, transfer or convey any security interest in the Collection Account, Concentration Account or Operating Account to any Person (other than the pledge contemplated in the Collection Account Control Agreement, the Concentration Account Control Agreement or the Operating Account Control Agreement, as applicable) without the express written consent of Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)<u>Special Purpose Entity</u>. Unless otherwise consented to by Administrative Agent in writing, and except as expressly permitted by the Facility Documents, Borrower and Pledgor shall comply with the Facility Documents, shall be Special Purpose Entities that shall (i) own no assets, and will not engage in any lines of business or activities, other than the assets and transactions specifically contemplated by the Facility Documents; (ii) not incur any Indebtedness or obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than permitted under the Facility Documents; (iii) not make any loans or advances to any Affiliate or third party, and shall not acquire obligations or securities of Borrower's Affiliates; (iv) pay its debts and liabilities (including, as applicable, shared personnel expenses and overhead expenses) only from its own assets; (v) comply with the provisions of its organizational documents (except, with respect to the certificate of formation, as required by law); (vi) do all things necessary to observe organizational formalities and to preserve its existence, and not amend, modify or otherwise change its organizational documents, or suffer the same to be amended, modified or otherwise changed, to be inconsistent with this

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Section 12(r) without Administrative Agent's prior written consent (other than its certificate of formation, to the extent such amendment or modification is required by any Requirement of Law); (vii) maintain all of its books, records and financial statements separate from those of its Affiliates (except that such financial statements may be consolidated with an Affiliate to the extent consolidation is required under GAAP or as a matter of any Requirement of Law; <u>provided</u>, that to the extent required by GAAP (1) appropriate notation shall be made on such financial statements if prepared to indicate the separateness of Borrower Party from such Affiliate and to indicate that Borrower Party's assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (2) such assets shall also be listed on Borrower Party's own separate balance sheet, if prepared and (3) Borrower Party shall file its own tax returns if filed, except to the extent consolidation is required or permitted under any Requirement of Law); (viii) be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate), shall correct any

known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other; (ix) not enter into any transactions with any Affiliates, other than for the Asset Management Agreements and other transactions permitted or required by the Facility Documents, except on commercially reasonable terms similar to those available to unaffiliated parties in an arm's length transaction; (x) maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business purposes, transactions and liabilities; <u>provided</u>, <u>however</u>, that the foregoing shall not require the direct or indirect partners or members of the Pledgor and any Borrower to make additional capital contributions or loans to any such Person; (xi) to the fullest extent permitted by law, not engage in or suffer any Change in Control, other than the Supernova SPAC Transaction consummated by the Guarantor, dissolution, winding up, liquidation, consolidation or merger or transfer all or substantially all of its properties and assets to any Person (except as contemplated herein); (xii) not, other than as contemplated in the Facility Documents, commingle its funds or other assets with those of any Affiliate or any other Person and shall maintain its properties and assets in such manner that it would not be costly or difficult to identify, segregate or ascertain its properties and assets from those of others; (xiii) not institute against, or join any other Person in instituting against any Borrower Party, any proceedings of the type referred to in the definition of "Insolvency Event" hereunder or seek to substantively consolidate Borrower Party in connection with any Insolvency Event with respect to any Borrower-Related Party or any other Person; (xiv) will not hold itself out to be responsible for the debts or obligations of any other Person; (xv) not form, acquire or hold any equity interest in any other entity; (xvi) allocate fairly and reasonably any overhead for shared office space and services performed by an employee of an Affiliate;

&nbsp;&nbsp;&nbsp;&nbsp;(xvii) not pledge its assets to secure the obligations of any other Person other than pledges specifically contemplated by the Facility Documents; (xviii) not, without the prior unanimous written consent of all of its members and each Independent Manager, take any Insolvency Action; (xix)(a) have at all times at least one Independent Manager and (b) provide Administrative Agent with up-to-date contact information for each such Independent Manager and a copy of the agreement pursuant to which such Independent Manager consents to and serves as an "Independent Manager" for each Borrower Party; and (xx) the organizational documents for each Borrower shall provide (a) that Administrative Agent be given at least two (2) Business Days prior written notice of the removal and/or replacement of any Independent Manager, together with the name and contact information of the replacement Independent Manager and evidence of

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the replacement's satisfaction of the definition of Independent Manager and (b) that any Independent Manager of a Borrower shall not have any fiduciary duty to anyone including the holders of the equity interest in a Borrower and any Affiliates of a Borrower Party except any Borrower Party and the creditors of a Borrower Party with respect to taking of, or otherwise voting on, the Insolvency Action; <u>provided</u>, that the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing. Borrower Representative shall not perform its duties under this Agreement in a manner that would result in the Borrowers' failure to comply with this <u>Section 12(r)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)<u>Use of Proceeds</u>. Borrower shall use the proceeds of all Advances solely for the purposes described in <u>Section 2(k)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)<u>Further Assurances</u>. Borrower shall at any time or from time to time upon the reasonable request of Administrative Agent, at Borrower's sole cost and expense, (a) furnish to

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)<u>Cooperate in Legal Proceedings</u>. Borrower shall cooperate fully with each Lender and Administrative Agent with respect to any proceedings before any court, board or other Governmental Authority which may in any way adversely affect the rights of Administrative Agent or any Lender hereunder or any rights obtained by Administrative Agent or any Lender under any of the other Facility Documents and, in connection therewith, permit Administrative Agent, at its election, to participate in any such proceedings; <u>provided</u>, that this covenant shall not apply to any such proceedings brought by any Borrower-Related Party or one of their Affiliates and relates to the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)<u>OFAC</u>. At all times that any Secured Obligations remain unpaid, it shall, and shall cause the Asset Manager to, be in compliance with all applicable orders, rules, and regulations of OFAC.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w)<u>Inspection Rights</u>. Once during each calendar year (or if an Event of Default shall have occurred and be continuing, as often as Administrative Agent deems necessary or desirable), Administrative Agent (and its agents or professional advisors) shall have the right, from time to time, at their discretion and upon two (2) Business Days prior written notice to the relevant party, (i) to visit and inspect any of the SF Properties of any Borrower, (ii) to discuss the affairs, finances and condition of any Borrower with the officers thereof and independent accountants therefor and (iii) to examine, and audit, during business hours, any and all of the books, records, financial statements, legal and regulatory compliance, operating and reporting procedures and information systems, in the possession of their respective directors, officers and employees, or other information contained on information systems (including without limitation customer service and/or whistleblower hotlines) of Borrowers, or held by another for a Borrower or on its behalf, concerning or otherwise affecting the SF Properties, the Facility Documents or any Borrower. Administrative Agent (and its agents and professional advisors) shall treat as confidential any information obtained during the aforementioned examinations subject to any

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)<u>HOA Dues</u>. Borrower will pay, or cause to be paid, in full when due all home owners' association dues and fees for each SF Property owned by it, except to the extent being

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contested in good faith by appropriate proceedings and for which appropriate cash reserves have been established by the related Borrower and are held in the Operating Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y)<u>Amendment, Modification of Documents or Accounts</u>. Borrower shall not, without Administrative Agent's prior written consent, amend, modify, cancel or terminate, or permit the amendment, modification, cancellation or termination of any Facility Document; provided, however, that any waiver, amendment or modification that materially affects the Paying Agent or Calculation Agent, as applicable (as reasonably determined by such party), shall require the consent of such party; written notice of any other amendment or waiver hereunder, together with a copy thereof, shall be delivered to the Calculation Agent and the Paying Agent via email at the addresses set forth next to its signature block , and neither the Calculation Agent nor Paying Agent shall have any liability for any amendment or waiver of which it did not receive such notice. For the avoidance of doubt, any amendments or modifications related to Schedule 3 to the Side Letter shall not require the consent of the Paying Agent or Calculation

Agent, unless such amendment or modification creates a material additional reporting burden on such party (as reasonably determined by such party)..

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z)<u>Bad Acts</u>. Borrower shall not, subject to <u>Section 8</u> hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(i)</u>to the extent funds are available to it, fail to pay any homeowners association dues, taxes, assessments, municipal or governmental rates, charges, impositions, liens and water and sewer rents or any part thereof, heretofore or hereafter imposed upon it or in respect of the SF Properties, as well as all lawful claims which if unpaid might become a lien or charge upon it, any Property or any other item constituting Collateral or any part thereof, unless, in each case, the same are not delinquent and are being contested in good faith by appropriate proceedings diligently conducted and for which appropriate reserves have been established in accordance with GAAP;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(ii)</u>remove and fail to replace (with personal property of substantially the same or higher utility and value) any fixtures, equipment, and/or other articles of personal property owned by it and attached as fixtures to, or used as fixtures in connection with, any SF Property owned by it, except for removal of obsolete or unnecessary fixtures in the ordinary course of maintaining and renovating such SF Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(iii)</u>misapply, misappropriate or convert or permit, to the extent of its power, any of its Affiliates to misappropriate, misapply or convert any Income;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(iv)</u>commit any act(s) of actual waste (excluding acts taken in the course of renovations) on or with respect to any SF Property owned by it;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(v)</u>fail to maintain insurance with respect to any SF Property owned by it or otherwise as required in this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(vi)</u>engage in any fraud, willful misconduct or intentional misrepresentation of a material fact in connection with this Agreement or any other Facility Document;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(vii)</u>without the prior written consent of the owner of its Capital Stock and its Independent Manager, take any action that is, or in contemplation or furtherance of, any Insolvency Action;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(viii)</u>voluntarily seek, cause or take any action to effect its dissolution or

liquidation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(ix)</u>assert that this Agreement or any other Facility Document, or any Lien

arising thereunder, is not the legal, valid and binding obligation of such Person or any other party thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(x)</u>sell, convey, voluntarily transfer or voluntarily encumber any SF Property or other Collateral other than in compliance with the provisions of this Agreement and the other Facility Documents; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(xi)</u>take any action, or fail to take any action, which prevents, delays or hinders the perfection of the Lien of Administrative Agent in any portion or all of the Collateral (which shall apply to any Mortgage Document only after such Mortgage Documents have been recorded in accordance with <u>Section 2(l)</u>).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) <u>Accounts</u>. It shall not establish, maintain or suffer to exist any deposit account or securities account by or on behalf of itself, except: (i) deposit accounts and securities accounts established for holding tenant security deposits to the extent required by applicable law, and for holding funds distributed to it from the Collection Account or other excess funds not required hereunder to be paid into the Collection Account or the Concentration Account; (ii) a deposit account or securities account in which it maintains amounts necessary to comply with this Agreement and (iii) any other account contemplated by the Facility Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) <u>Borrower Performance</u>. Borrower shall in a timely manner observe, perform and fulfill each and every covenant, term and provision to be observed and performed by Borrower under this Agreement and the other Facility Documents and any other agreement or instrument affecting or pertaining to the Collateral (if any) and any amendments, modifications or changes thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) <u>Contractual Obligations</u>. Other than (x) the Facility Documents or as contemplated therein, or as permitted thereunder, and any arm's-length commercial agreements and documents executed by any Borrower-Related Party related thereto or in connection therewith with respect to purchase or sale transactions relating to the SF Properties (in each case that do not violate any other Section of this Agreement (including but not limited to <u>Section</u> <u>12(r)</u>)) and (y) its Governing Documents, neither Borrower nor any of its assets shall be subject to any material Contractual Obligations (other than certain service agreements entered into by Borrower and its Independent Manager on or prior to the Closing Date and certain registered agent service agreements entered into by Borrower and its registered agent for service of process).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) <u>Recordation of Mortgages</u>. No Borrower-Related Party shall record or cause to be

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recorded any Mortgage in the name of Administrative Agent or any Lender unless Administrative Agent has approved the form of such Mortgage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) <u>Environmental Covenants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Borrower covenants and agrees that so long as the Advances are outstanding (A) all uses and operations on or of each Financed SF Property owned by it shall be in compliance in all material respects with all Environmental Laws and permits issued pursuant thereto; (B) there shall be no Releases of Hazardous Materials in, on, under or from any Financed SF Property owned by it except in compliance with Environmental Laws and as would not be reasonably expected to result in a material liability; (C) Borrower shall prevent the release by Borrower or any of its employees, contractors, customers, vendors, invitees, or others under the control of or doing business with Borrower of any Hazardous Materials in, on or under any Financed SF Property owned by it, except those that are either (1) in compliance with all Environmental Laws and with permits issued pursuant thereto, if and to the extent required, and

&nbsp;&nbsp;&nbsp;&nbsp;(2) (x) in amounts not in excess of that necessary to operate or occupy the Financed SF Property

owned by it or (y) fully disclosed to and approved by Administrative Agent in writing; and (D) it shall keep the Financed SF Properties owned by it free and clear of all liens and other encumbrances imposed pursuant to any Environmental Law, whether due to any act or omission of it or any other Person (the "<u>Environmental Liens</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) <u>Reimbursement of Expenses</u>. On the date of execution of this Agreement, Borrower shall reimburse Administrative Agent for all reasonable expenses (including legal fees) incurred by Administrative Agent and Lenders on or prior to such date incurred in connection with the negotiation and documentation of this Agreement and the related Facility Documents, and diligence of the initial proposed SF Properties. From and after such date, Borrower shall promptly reimburse Administrative Agent for all such reasonable expenses as the same are incurred by Administrative Agent and Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gg) <u>Financial Covenants</u>. The Guarantor and all of its subsidiaries on a consolidated basis shall, at all times, be in compliance with the Financial Covenants.

Section 13. <u>Events of Default.</u>Each of the following shall constitute an "<u>Event of</u> <u>Default</u>" under this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Failure to Pay</u>. Any Borrower shall default in the payment of (i) the Advances Outstanding on the Maturity Date or any payment of principal when due and payable pursuant to <u>Section 2(h)</u>, (ii) any Facility Interest or Unused Fee is not paid when due and such non-payment is not cured within one (1) Business Day, or (iii) any other amount (including other fees, expenses, indemnities or other payment obligations) payable to Administrative Agent or Lenders hereunder or under any other Facility Document is not paid when due and such non-payment is not cured within three (3) Business Days after the date upon which written notice thereof is given to Borrower Representative by Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Failure to Observe Covenants</u>. (i) Any Borrower shall fail to perform or comply with any term or condition contained in <u>Sections 12(c), (f), (g), (m), (q), (s), (v)</u> or <u>(y)</u>, or in

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subclauses <u>(i), (ii), (iii), (vi), (vii), (ix), (xi), (xiii), (xiv), (xv), (xvii), (xviii), (xix)</u> or <u>(xx)</u> of <u>Section 12(r)</u>, (ii) any Borrower shall fail to perform or comply with any term or condition contained in subclauses <u>(iv)</u> or <u>(x)</u> of <u>Section 12(r)</u> and such failure specified in this subclause

&nbsp;&nbsp;&nbsp;&nbsp;(ii) shall continue for a period of ten (10) Business Days after the earlier to occur of (1) the date upon which a Responsible Officer of such Borrower has knowledge of such failure and (2) the date upon which written notice thereof is given to such Borrower by Administrative Agent, (iii) any Borrower shall fail to perform or comply with any term or condition contained in subclause (xii) of <u>Section 12(r)</u> and such failure specified in this subclause (iii) shall continue for a period of five (5) Business Days after the earlier to occur of (1) the date upon which a Responsible Officer of such Borrower has knowledge of such failure and (2) the date upon which written notice thereof is given to such Borrower by Administrative Agent or (iv) any Borrower Party shall fail to perform or comply with any other term or condition contained in this Agreement or any other Facility Document and such failure specified in this subclause (iv) shall continue for a period of thirty (30) days after the earlier to occur of (1) the date upon which a Responsible Officer of any Borrower Party has knowledge of such failure and (2) the date upon which written notice thereof is given to Borrower Representative by Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Misrepresentation</u>. (i) Any representation or warranty by a Borrower contained in <u>Sections 11(k), (s), (u), (v)</u> or <u>(w)</u> of this Agreement shall be or shall have been or proved to be false in any material respect (without duplication of any materiality qualifier contained herein or therein) when made or deemed made, without regard to any knowledge or lack of knowledge thereof by Administrative Agent or any Lender, (ii) any other representation or warranty by a Borrower Party contained in this Agreement or any other Facility Document shall be or shall have been or proved to be false in any material respect (without duplication of any materiality qualifier contained herein or therein) when made or deemed made, without regard to any knowledge or lack of knowledge thereof by Administrative Agent or any Lender, and such failure specified in this subclause (ii) shall continue for a period of thirty (30) days after the earlier to occur of (1) the date upon which a Responsible Officer of any Borrower Party has knowledge of such failure and (2) the date upon which written notice thereof is given to Borrower Representative by Administrative Agent; <u>provided</u> that it shall not be an Event of Default under this clause (c) in the event of a breach of a representation or warranty contained on <u>Schedule 2</u> to the Side Letter hereto so long as Borrowers comply with the requirements of <u>Section 2(h)(i)</u> within the times required thereunder or (iii) any of the representations and warranties set forth in this Agreement or any other Facility Document shall prove to have been false or misleading in any material respect as of the time made and such Borrower Party shall intentionally have made any such representations and warranties with knowledge that they were materially false or misleading at the time made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Judgments</u>. Any judgment or order or series of judgments or orders for the payment of money in an amount exceeding (i) $1,000,000 is rendered against any Borrower Party or (ii) $5,000,000 is rendered against Guarantor, in each case, by a court of competent jurisdiction, unless such judgment(s) or order(s) has, within thirty (30) days of the entry thereof, been paid, vacated, satisfied, dismissed or bonded pending appeal or which is covered by insurance (subject to applicable deductibles), the insurer in respect of which has accepted defense thereof subject only to customary reservations of rights.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Voluntary Bankruptcy; Appointment of Receiver</u>. Any Borrower Party or Guarantor (i) becomes unable, or fails, or admits in writing its inability, to generally pay its debts as such debts become due, (ii) makes an assignment for the benefit of creditors, (iii) files a petition in bankruptcy, (iv) petitions or applies to any tribunal for any receiver or any trustee of such Person or any substantial part of the property of such Person, (v) commences any proceeding relating to such Person under any reorganization, arrangement, composition, readjustment, liquidation or dissolution law or statute of any jurisdiction, whether in effect now or after this Agreement is executed or (vi) the board of directors (or similar governing body) of such Person (or any committee thereof) shall adopt any resolution or otherwise authorize any action to approve any of the actions referred to in this <u>Section 13(e)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Involuntary Bankruptcy</u>. If, (i) within sixty (60) days after the filing of a bankruptcy petition or the commencement of any proceeding against any Borrower Party or Guarantor seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, the proceeding shall not have been dismissed, (ii) within thirty (30) days after the appointment, without the consent or acquiescence of such Person, of any trustee, receiver or liquidator of such Person or all or any substantial part of the properties of such Person, the appointment shall not have been vacated or (iii) any order for relief is granted in any bankruptcy proceeding against such Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)<u>Defaults Under Other Indebtedness</u>. Any Borrower Party or Guarantor shall be in default beyond any applicable grace period under (A) (i) any indebtedness of such Borrower Party that is in an amount equal to or greater than $1,000,000 or (ii) any indebtedness of the Guarantor that is in an amount equal to or greater than $5,000,000 or (B) any other financing, hedging, security or other agreement or contract between such Borrower Party or Guarantor on the one hand, and Administrative Agent or any of its Affiliates on the other.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)<u>Event of ERISA Termination</u>. The occurrence of an Event of ERISA Termination that would reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Asset Manager Event of Default</u>. Any Asset Manager Event of Default occurs and the Asset Manager is not replaced with Radian Real Estate Management LLC or such other successor Asset Manager acceptable to Administrative Agent, in its sole discretion, within thirty

&nbsp;&nbsp;&nbsp;&nbsp;(30) days; <u>provided</u>, <u>however</u>, such Asset Manager Event of Default may be waived in writing by Administrative Agent in its sole and absolute discretion on or prior to the thirtieth (30th) day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)<u>Asset Manager Termination</u>. Any Asset Manager is terminated in accordance with the Asset Management Agreement and such Asset Manager is not replaced with Radian Real Estate Management LLC or such other successor Asset Manager acceptable to Administrative Agent within thirty (30) days after such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)<u>Change in Control</u>. A Change in Control shall occur that was not otherwise consented to in writing by Administrative Agent in its sole and absolute discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)<u>Facility Documents</u>. At any time after the execution and delivery thereof, (i) this Agreement or any other Facility Document ceases to be in full force and effect in all material respects or shall be declared null and void (other than by termination in accordance with the terms

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hereof or thereof), or Administrative Agent shall not have or shall cease to have a valid and perfected Lien in all or any material portion of the Collateral (other than any Mortgage prior to a Mortgage Event) purported to be covered by the Facility Documents with the priority required by the Facility Documents, in each case, other than as a result of any action or inaction by Administrative Agent, any Lender or any of their respective Affiliates or (ii) any Borrower, the Asset Manager (so long as it is Guarantor or an Affiliate of Guarantor), the Guarantor or any of their respective Affiliates shall contest the validity or enforceability of any Facility Document in writing or deny in writing that it has any further liability under any Facility Document to which it is a party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)<u>Guarantor Default</u>. Guarantor shall be in default beyond any applicable cure period under the Limited Guaranty and such default shall be continuing, and such default includes the failure to pay a material obligation with respect to the Limited Guaranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)<u>Assignment</u>. An assignment or attempted assignment by any Borrower Party of this Agreement or assignment or attempted assignment by Guarantor of the Limited Guaranty without first obtaining the specific prior written consent of Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)<u>Securities Law Violation</u>. Any Borrower Party shall have become an "investment company", or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)<u>Guarantor Financial Covenants</u>. The failure by Guarantor to be in compliance with any Financial Covenant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)<u>Lien Not First Priority</u>. Administrative Agent for the benefit of the Lenders shall fail for any reason to have a first priority perfected security interest in any portion of the Pledged Collateral or, other than Permitted Liens, any other Collateral (other than with respect to any Mortgage prior to a Mortgage Event).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)<u>Material Adverse Effect</u>. A Material Adverse Effect shall have occurred as determined by Administrative Agent in its discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)<u>Financial Statements</u>. Guarantor's audited annual financial statements or the notes thereto or other opinions or conclusions stated therein are qualified or limited by reference to the status of any Borrower Party as a "going concern" or a reference of similar import.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)<u>Dissolution</u>. Any action is taken that is intended to result, or results, in the dissolution, liquidation or termination of the existence of any Borrower Party or Guarantor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)<u>Insolvency Opinions</u>. Any of the assumptions contained in any non-consolidation opinion letter delivered by DLA Piper on the Closing Date or by any other firm in connection with any Joinder Agreement is, or shall become, untrue in any respect.

Section 14. <u>Remedies</u>.If an Event of Default occurs and is continuing, the following rights and remedies are available to Administrative Agent and the Lenders:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Subject to the terms and conditions provided for in Section 14(b) below, at the

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option of Administrative Agent or the Lenders, as applicable, exercised by written notice to Borrower Representative (which option shall be deemed to have been exercised, even if no notice is given, immediately upon the occurrence of an Insolvency Event of a Borrower Party or Guarantor), all Secured Obligations shall be deemed immediately due and payable (the date on which such option is exercised or deemed to have been exercised being referred to hereinafter as the "<u>Accelerated Repayment Date</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)If Administrative Agent or the Lenders exercise or are deemed to have exercised the option referred to in <u>Section 14(a)(i)</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)(1) each Borrower's obligations to repay all Advances at the Aggregate Repayment Amount shall thereupon become immediately due and payable, (2) all Income paid after such exercise or deemed exercise shall be retained by Administrative Agent and applied to the aggregate unpaid Aggregate Repayment Amount and any other amounts owed by such Borrower hereunder, and (3) Borrowers shall immediately deliver to Administrative Agent any Financed SF Properties securing the Advances then in Borrower's possession or control, including SF Property; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)to the extent permitted by any Requirement of Law, the Repayment Amount with respect to each such Advance (determined as of the Accelerated Repayment Date) shall be increased by the aggregate amount obtained by daily application of, on a 360 day per year basis (as applicable) for the actual number of days during the period from and including the date of the exercise or deemed exercise of such option to but excluding the date of payment of the Repayment Amount as so increased, (x) the Default Rate in effect following an Event of Default to (y) the Repayment Amount for such Advance as of the Accelerated Repayment Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Administrative Agent shall have the right to obtain physical possession of all files of each Borrower Party relating to the Financed SF Properties and the Collateral and all documents relating to the Financed SF Properties and the SF Property related thereto which are then or may thereafter come in to the possession of a Borrower Party or any third party acting for a Borrower Party and each Borrower Party shall deliver to Administrative Agent such assignments as Administrative Agent shall request. Administrative Agent shall be entitled to specific performance of all agreements of each Borrower Party contained in Facility Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Administrative Agent, or Administrative Agent through its Affiliates or designees, may elect any or all of the following remedies (A) foreclose any Mortgage in part or in full, (B) sell, at a public or private sale at such price or prices as Administrative Agent may deem satisfactory any or all of the Financed SF Properties and Collateral and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) retain such Financed SF Properties and Collateral and give the related Borrower credit for such Financed SF Properties in an amount equal to an Evaluation of the related SF Property, which Evaluation must be dated no earlier than thirty (30) days prior to the date of such retention, delivered to Administrative Agent by the Valuation Agent, at the applicable Borrower's sole cost and expense. The net proceeds of any disposition of

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Financed SF Properties and Collateral effected pursuant to the foregoing shall be applied as determined by Administrative Agent to satisfy the Secured Obligations hereunder in full, and any remaining amounts shall be distributed to Borrowers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Borrowers shall be liable to Administrative Agent for (A) the amount of all actual expenses, including documented legal fees and expenses, actually incurred by Administrative Agent in connection with or as a consequence of an Event of Default, (B) all actual costs incurred in connection with covering transactions or hedging transactions, and (C) any other actual loss, damage, cost or expense arising or resulting from the occurrence of an Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Each Lender, by entering into this Agreement or an Assignment and Assumption Agreement, acknowledges and agrees that, subject to the proviso at the end of the next sentence, following the occurrence of an Event of Default, all rights and remedies of the Lenders hereunder shall be exercised by the Administrative Agent at the direction and under the control of the Required Lenders and may result in Lenders, including, without limitation, Class B

Lenders, receiving less than the full amount of the Secured Obligations owing to such Lender. Subject to the proviso at the end of this sentence, the Required Lenders shall have the sole authority to, without limitation, declare or waive a Default of Event of Default, accelerate any of the Secured Obligations, direct the Administrative Agent to commence or refrain from commencing any enforcement proceedings whatsoever pursuant to any of the Facility Documents or take any other action permissible hereunder or under applicable law, provided that, so long as the Required Class A Lenders are the Required Lenders:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Only the Class A Lenders shall be permitted to waive, in their sole discretion, the occurrence of an Event of Default pursuant to <u>Section 13(a)</u> with respect to amounts due and payable to the Class A Lenders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Only the Class B Lenders shall be permitted to waive, in their sole discretion, the occurrence of an Event of Default pursuant to <u>Section 13(a)</u> with respect to amounts due and payable to the Class B Lenders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)The Class A Lenders shall have the right but not the obligation, upon written notice to the Class B Lenders, to waive any Event of Default (other than an Event of Default pursuant to Section 13(a) with respect to the Class B Lenders), provided that, once the Class B Lenders receive such notice from the Class A Lenders, the Class B Lenders will have five (5) Business Days to object in writing to such waiver with the basis for such objection being that the waiver of the Event of Default would have a material effect, or a reasonable likelihood of a material effect, on the Class B Lenders' (A) rights as a Lender, (B) ability to be repaid or (C) collateral position, in which case, the Class A Lenders shall not waive such Event of Default without the Class B Lenders' consent, provided further, that if the Class A Lenders determine in their sole discretion that not waiving such Event of Default would be materially prejudicial on the Class A Lenders' (A) rights as a Lender, (B) ability to be repaid or (C) collateral position, then the Class A Lenders' decision to waive such Event of Default shall govern;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)The Class B Lenders, upon giving one hundred fifty (150) days' prior written

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notice to the Class A Lenders, shall be permitted to declare an Event of Default (subject to the terms and conditions of this Section 14(b)) if the Class A Lenders have not declared such Event of Default by the one hundred fiftieth (150th) day after the Class A Lenders' receipt of such notice from the Class B Lenders; provided that, the Class B Lenders shall not be permitted to declare an Event of Default if such Event of Default has been waived by the Class A Lenders or the Administrative Agent in accordance with the provisions of this Section; provided further that, the Class B Lenders shall be permitted to take such actions (whether before or after the expiration of such one hundred fifty

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(150) day period) as may be reasonably necessary to preserve or toll the Class B Lenders' rights (including with respect to any applicable statute of limitations or filing a proof of claim in an insolvency proceeding);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)The Required Lenders shall provide prior written notice to the Class B Lenders (the "<u>Exercise Notice</u>") of their intent to commence the exercise of remedies under this Agreement and the Class B Lenders shall have the right, but not the obligation, with written notice to the Class A Lenders (the "<u>Purchase Option Notice</u>") not later than five (5) Business Days after their receipt of such Exercise Notice, to elect to purchase the Class A Advances Outstanding at such time for an amount equal to the full amount of the Secured Obligations owing to the Class A Lenders at such time (the "<u>Purchase Option</u>"); provided that such Purchase Option must be completed within ten (10) Business Days of the Class A Lenders' receipt of the Purchase Option Notice (the "<u>Purchase Deadline</u>"); provided, further, that the Purchase Deadline shall be automatically extended to fifteen

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15) Business Days after the Class A Lenders' receipt of the Purchase Option Notice if the Class B Lenders shall have (A) provided written certification to the Class A Lenders that the Class B Lenders have duly called the capital required to complete the Purchase Option and (B) delivered a non-refundable cash deposit to the Class A Lenders in an amount equal to ten percent (10%) of the Secured Obligations owing to the Class A Lenders at such time; provided, further, that the Class A Lenders shall not take any enforcement action during such five (5), ten (10) and fifteen (15) Business Day periods referenced above except to the extent such Class A Lenders or the Administrative Agent determine is necessary to protect and/or preserve the rights of such Class A Lenders hereunder; provided, further, that in the event the Class B Lenders shall fail to consummate the Purchase Option on or prior to the Purchase Deadline, the Class B Lenders shall not have any further Purchase Option right with respect to the Class A Advances Outstanding hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)Upon the occurrence of an Event of Default pursuant to which the Class A Lenders exercise their remedies under Article 9 of the UCC, the Class B Lenders shall be permitted to credit bid the amount of the Secured Obligations owed by Borrower to Class B Lenders so long as the net proceeds from the exercise of such remedies satisfy the Class A Lenders in full in accordance with Requirements of Law; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)upon the occurrence of an Insolvency Event of a Borrower Party or Guarantor, nothing will impair the Class A Lenders' or Class B Lenders' rights in its capacity as an unsecured creditor of any Borrower Party or Guarantor.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Each Borrower acknowledges and agrees that (A) in the absence of a generally recognized source for prices or bid or offer quotations for any Financed SF Properties and Collateral, Administrative Agent may establish the source therefor in its sole discretion and (B) all prices, bids and offers shall be determined together with accrued Income. Each Borrower recognizes that it may not be possible to purchase or sell all of the Financed SF Properties and Collateral on a particular Business Day, or in a transaction with the same purchaser, or in the same manner because the market for such Financed SF Properties and Collateral may not be liquid at such time. In view of the nature of the Financed SF Properties and Collateral, each Borrower agrees that liquidation of the Financed SF Properties and Collateral does not require a public purchase or sale and that a good faith private purchase or sale shall be deemed to have been made in a commercially reasonable manner. Accordingly, Administrative Agent may elect, in its sole discretion, the time and manner of liquidating any Financed SF Properties and Collateral, and nothing contained herein shall obligate Administrative Agent to liquidate any Financed SF Properties and Collateral on the occurrence and during the continuance of an Event of Default or to liquidate all of the Financed SF Properties and Collateral in the same manner or on the same Business Day. Administrative Agent may exercise one or more of the remedies available hereunder immediately upon the occurrence of an Event of Default and at any time thereafter without notice to Borrowers. All rights and remedies arising under this Agreement are cumulative and not exclusive of any other rights or remedies which Administrative Agent may have.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Administrative Agent may enforce its and each Lender's rights and remedies hereunder without prior judicial process or hearing, and each Borrower hereby expressly waives any defenses such Borrower might otherwise have to require Administrative Agent to enforce its rights by judicial process. Each Borrower also waives any defense (other than a defense of payment or performance) such Borrower might otherwise have arising from the use of nonjudicial process, enforcement and sale of all or any portion of the Collateral, or from any other election of remedies. Each Borrower recognizes that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm's length.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Without limiting the rights of Administrative Agent hereto to pursue all other legal and equitable rights available to Administrative Agent for a Borrower's failure to perform its obligations under this Agreement, each Borrower acknowledges and agrees that the remedy at law for any failure to perform obligations hereunder would be inadequate and Administrative Agent shall be entitled to specific performance, injunctive relief, or other equitable remedies in the event of any such failure. The availability of these remedies shall not prohibit Administrative Agent from pursuing any other remedies for such breach, including the recovery of monetary damages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Administrative Agent shall have, in addition to its rights and remedies under the Facility Documents, all of the rights and remedies provided by applicable federal, state, foreign, and local laws (including the rights and remedies of a secured party under the UCC of the State of New York, to the extent that the UCC is applicable, and the right to offset any mutual debt and claim), in equity, and under any other agreement between Administrative Agent and a Borrower Party. Without limiting the generality of the foregoing, Administrative Agent shall be entitled to set off the proceeds of the liquidation of the Financed SF Properties and Collateral against all of the Secured Obligations owed to Administrative Agent, whether or not such obligations are then

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due, without prejudice to Administrative Agent's right to recover any deficiency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)In connection with the enforcement of any Mortgage Documents recorded after a Mortgage Event, the terms of the Mortgage Documents shall control over any contrary provisions set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)No right or remedy herein conferred upon the Administrative Agent is intended to be exclusive of any other right or remedy contained herein or in any instrument or document delivered in connection with or pursuant to this Agreement, and every such right or remedy contained herein and therein or now or hereafter existing at law or in equity or by statute, or otherwise may be exercised separately or in any combination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)No course of dealing between any Borrower Party, on the one hand, and the Administrative Agent or any Lender, on the other hand, or any failure or delay on any Lender or the Administrative Agent's part in exercising any rights or remedies hereunder or under any

Facility Document shall operate as a waiver of any rights or remedies of the Administrative Agent or any Lender and no single or partial exercise of any rights or remedies hereunder or thereunder shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)For the avoidance of doubt, any sales, use, excise, value-added, gross receipts (in the nature of a sales tax), services, consumption, and other similar transaction-based taxes, however designated, that are properly levied by any Governmental Authority upon or in respect of the exercise of rights and remedies by the Administrative Agent and the Lenders under this Agreement shall be deemed to be, for all purposes, an Advance.

Section 15. <u>Indemnification and Expenses</u>.Each Borrower agrees to hold Administrative Agent, each Lender, Calculation Agent and Paying Agent, and their respective Affiliates and their respective officers, directors, employees, agents and advisors (each an "<u>Indemnified Party</u>") harmless from and indemnify any Indemnified Party against all liabilities, losses, damages, judgments, fees, costs and expenses of any kind (including fees of counsel) which may be imposed on, incurred by or asserted against such Indemnified Party (collectively, "<u>Costs</u>"), relating to or arising out of this Agreement, any other Facility Document or any transaction contemplated hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, any other Facility Document or any transaction contemplated hereby or thereby, that, in each case, results from anything other than the Indemnified Party's bad faith, fraud, negligence (or, in the case of the Calculation Agent and Paying Agent, gross negligence) or willful misconduct. Without limiting the generality of the foregoing, each Borrower agrees to hold any Indemnified Party harmless from and indemnify such Indemnified Party against all Costs with respect to all Collateral, including SF Properties, which, in each case, results from anything other than the Indemnified Party's bad faith, fraud, negligence (or, in the case of the Calculation Agent and Paying Agent, gross negligence) or willful misconduct. In any suit, proceeding or action brought by an Indemnified Party in connection with any Collateral for any sum owing thereunder, or to enforce any provisions of any Collateral, Borrowers will save, indemnify and hold such Indemnified Party harmless from and against all expenses, losses or damages suffered by reason of any defense, set-off, counterclaim, recoupment, reduction or liability whatsoever of the account debtor or obligor

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thereunder, arising out of a breach by a Borrower of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from such Borrower. Each Borrower also agrees to reimburse an Indemnified Party as and when billed by such Indemnified Party for all the Indemnified Party's costs and expenses (including the reasonable fees and disbursements of its counsel) incurred in connection with the enforcement or the preservation of Administrative Agent and Lenders' rights under this Agreement, any other Facility Document or any transaction contemplated hereby or thereby. This <u>Section 15(a)</u> shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, costs or expenses arising from any non-Tax claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Borrowers agree to pay as and when billed by Administrative Agent all of the out-of-pocket costs and expenses incurred by Administrative Agent and Lenders in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement, any other Facility Document or any other documents prepared in connection herewith or therewith, including legal fees and expenses and an annual structured finance audit performed by a third party auditor. Borrowers agree to pay as and when billed by Administrative Agent all of the costs and expenses incurred in connection with the consummation and administration of the transactions contemplated hereby and thereby including filing fees and all the fees, disbursements and expenses of counsel to Administrative Agent and Lenders, which amounts with respect to the consummation of the transactions contemplated hereby incurred prior to the date hereof shall be paid pursuant to <u>Section 2(e)(viii)(B)</u> in connection with the initial Advance hereunder. Borrowers agree to pay Administrative Agent all the due diligence, inspection, testing and review costs and expenses incurred by Administrative Agent and Lenders with respect to SF Property pledged by a Borrower to secure Advances under this Agreement, including, but not limited to, those out-of-pocket costs and expenses incurred by Administrative Agent and Lenders pursuant to <u>Sections 15(b) and 18</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Borrowers hereby acknowledge that the Secured Obligations of Borrower from time to time to pay the Repayment Amount, the Facility Interest, and all other amounts due under this Agreement shall be full recourse obligations of Borrowers.

Section 16. <u>Property Management</u>.Each Borrower shall at all times during the term of this Agreement and during which any Advance is outstanding, cause each SF Property to be managed by the Asset Manager under the applicable Asset Management Agreement or, only after an Asset Manager Event of Default, by such other Person as is acceptable to Administrative Agent in its sole discretion (having due regard for Borrower preference), such property management to be at all times conducted in strict accordance with those property management or sales practices of prudent institutions that (i) manage single family and 2-4 family residential homes for sale of the same type as such SF Property in the jurisdiction where the related SF Property is located, (ii) employ procedures intended to produce the highest possible net present value on the SF Properties for the related Borrower and Lenders, and (iii) exercise at least the same care, skill, attention, prudence, time and diligence that a prudent real estate manager acting in a like capacity would exercise managing similar properties giving due consideration to clauses (i) and (ii) of this <u>Section 16(a)</u> and Requirements of Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)OFFERPAD SPE BORROWER A, LLC shall establish and maintain the Operating Account with the Account Bank.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Each Borrower shall deposit and remit all Income received by such Borrower on account of the Financed SF Properties in strict compliance with the provisions of <u>Section 4(a)</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)If a Borrower should discover that, for any reason whatsoever, Asset Manager or any Subcontractor is in default of the property management provisions of the SPE Agreements or any related Subcontractor Agreement, respectively, such Borrower shall promptly notify Administrative Agent. Following delivery such notice, upon the written request of Administrative Agent, such Borrower shall cooperate in replacing Asset Manager or such Subcontractor with a new property manager or subcontractor acceptable to Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Back-Up Manager</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)The Back-Up Manager shall maintain current records and systems concerning the SF Properties in order to enable it to timely and efficiently assume the responsibilities of the Asset Manager in accordance with the terms and conditions of this Agreement and the Asset Management Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Following an Asset Manager Event of Default, the Administrative Agent shall have the option, in its sole discretion, to arrange for the delivery to the Back-Up Manager of all of the Property Documents, which shall contain sufficient data to permit the Back-Up Manager to assume the duties of the Asset Manager hereunder without delay.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Following an Asset Manager Event of Default, and if directed by the Administrative Agent in its sole discretion, the Back-Up Manager shall use reasonable efforts to diligently complete the physical transfer of files from the terminated Asset Manager with the cooperation of such defaulting party. From and after the date physical transfer is completed (the "<u>Back-Up Manager Transfer Date</u>"), the Administrative Agent shall have the option, in its sole discretion, to direct the Back-Up Manager to manage the SF Properties in accordance with the provisions of this Agreement, the Diligence Agent Agreement and the Asset Management Agreements with all the rights and obligations of the Asset Manager and the Back-Up Manager, or following an Event of Default, such other agreement as may be entered into between the Administrative Agent and the Back-Up Manager and shall have no liability or responsibility with respect to any obligations of the defaulting party, arising or accruing prior to the Back-Up Manager Transfer Date. The Administrative Agent, if it determines in its reasonable discretion that enforcement rights and/or remedies are available to the Lenders against the terminated Asset Manager and it is prudent under the circumstances to enforce such rights, agree to enforce their rights under this Agreement against the terminated Asset Manager, including any rights they have to enforce each terminated Asset Manager's obligation to fully cooperate in the orderly transfer and transition of management obligations and otherwise comply with the terms of this Agreement and the Asset Management Agreement. In the event that the Back-Up Manager discovers or becomes aware of any errors in any records or data of the terminated Asset Manager which impairs its ability to perform its duties hereunder, the Back-Up Manager shall notify the Administrative Agent in writing of such errors and shall, at the terminated Asset Manager's expense and upon the Administrative Agent's direction, undertake to correct or reconstruct such records or data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)From and after the date of this Agreement until the Back-Up Manager Transfer Date, the Asset Manager shall provide or cause to be provided to the Back-Up Manager

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on each Remittance Date, in electronic form, a complete data tape of the SF Properties and such other information as the Administrative Agent may reasonably deem necessary, including all information necessary to determine the Asset Purchase Price, and shall make available to the Back-Up Manager a copy of the Periodic Remittance Report. In addition, the Asset Manager shall provide all other documents and materials as are commercially reasonably requested by the Back-Up Manager at the request of the Administrative Agent, the Back-Up Manager may perform an initial comprehensive data integrity review and a monthly review of this information to determine whether it provides adequate information to enable the Back-Up Manager to perform its obligations hereunder as the Back-Up Manager. To the extent that the Back-Up Manager determines within ten (10) days of its receipt of such information that such information is inadequate for the Back-Up Manager to perform its obligations as the Back-Up Manager, the Back-Up Manager will provide prompt written notice to the Administrative Agent, the Borrower Representative and the Asset Manager identifying any deficiencies in such information that do not enable the Back-Up Manager to perform its obligations as the Back-Up Manager. The Asset Manager shall use its reasonable efforts to provide any such deficient information to the Back-Up Manager within ten (10) days of receipt of such notice from the Back-Up Manager.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)At the request of the Administrative Agent, within ten (10) Business Days of the date of receipt from the Asset Manager, the Back-Up Manager shall, in order to understand the purpose of each data field (and the interrelationships among such data fields), review the form of Periodic Remittance Report, each in the form agreed to by the Asset Manager, the Administrative Agent and the Back-Up Manager. In such case, provided the data in the Periodic Remittance Report are in a format readable by the Back-Up Manager, the Back-Up Manager shall create a set of conversion routines and database mapping programs, as necessary, that will enable the Back-Up Manager to (i) receive such data from the Asset Manager on a monthly basis and to ensure that the data is readable, and (ii) independently generate such Periodic Remittance Reports, as applicable, following the Back-Up Manager Transfer Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)On a monthly basis, the Back-Up Manager shall (x) verify receipt of the Periodic Remittance Report required to be delivered by the Asset Manager, and (y) verify that such records and data are in a readable format.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)The Back-Up Manager shall not resign from the obligations and duties hereby imposed on it, except upon determination that its duties hereunder are no longer permissible under applicable law or are in material conflict by reason of applicable law with any other activities carried on by it. No such resignation shall become effective until a successor shall have assumed the responsibilities and obligations of the resigning party hereunder. Notwithstanding the foregoing, the Back-Up Manager may cause all of the obligations and duties imposed on it by this Agreement to be assumed by, and may assign its rights, benefits or privileges hereunder to, with the prior written approval of the Administrative Agent, a successor, upon its delivery to the Administrative Agent of the assumption by the assignee of all of the obligations and duties of the Back-Up Manager.

Section 17. <u>Paying Agent; Calculation Agent</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Paying Agent</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Administrative Agent hereby appoints Wells Fargo Bank, National Association as the initial Paying Agent. All payments of amounts due and payable in respect of the Secured Obligations that are to be made from amounts withdrawn from the

Collection Account pursuant to <u>Section 4(c)</u> shall be made on behalf of Borrowers by Paying Agent, in accordance with the written instruction of Administrative Agent pursuant to <u>Section 4(c)</u>. On the Facility Termination Date, all funds then held by any Paying Agent under this Agreement shall, upon demand of Borrowers, be paid to Administrative Agent to be held and applied according to <u>Section 4(c)</u>, and thereupon such Paying Agent shall be released from all further liability with respect to such funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)On each Remittance Date, Borrowers shall pay to Paying Agent the Paying Agent Fee pursuant to <u>Section 4(c)(i)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Paying Agent hereby agrees that, subject to the provisions of this <u>Section</u> <u>18(a)</u>, it shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)hold any sums held by it for the payment of amounts due with respect to the Secured Obligations in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)give Administrative Agent notice of any default by any Borrower of which it has actual knowledge in the making of any payment required to be made with respect to the Secured Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)at any time during the continuance of any Event of Default, upon the written instruction of Administrative Agent (a copy of which shall be provided by Administrative Agent to Borrower Representative), forthwith pay to Administrative Agent any sums due to Administrative Agent so held in trust by Paying Agent; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)provide to Lenders such information as is required to be delivered under the Code or any State law applicable to the particular Paying Agent, relating to payments made by Paying Agent under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Any successor paying agent shall be appointed by Administrative Agent, subject to providing notice thereof to Lenders and Borrower Representative. Administrative Agent and Borrower Representative shall mutually agree in writing on the fees required to engage the services of any such successor paying agent to the extent that such fees exceed those paid to the prior Paying Agent and upon such mutual agreement, such approved fee shall constitute the Paying Agent Fee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)Borrowers shall indemnify Paying Agent and its officers, directors, employees and agents (each, a "<u>PA Party</u>" and collectively, the "<u>PA Parties</u>") for, and hold them harmless against, any loss, liability, damage, cost or expense (including reasonable attorneys' fees) incurred in connection with or arising out of (A) the performance of its obligations under and in accordance with this Agreement, including without limitation

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the costs and expenses of (x) investigating any claim or allegation relating to the exercise or performance of any of its powers or duties under this Agreement, and (y) preparing for, and prosecuting or defending itself against any investigation, dispute or legal proceeding, whether pending or threatened, related to any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement; (B) pursuing enforcement (including without limitation by means of any action, claim, or suit brought by Paying Agent for such purpose) of any indemnification or other obligation of Borrowers (the indemnification afforded under this <u>subclause (B)</u> to include, without limitation, any legal fees, costs and expenses incurred by Paying Agent in connection therewith), and (C) the gross negligence, willful misconduct or actual fraud of any Borrower in the performance of its duties hereunder, except in each case to the extent any such loss, liability or expense results from the gross negligence, willful misconduct or actual fraud of Paying Agent or any PA Party (in each case, as determined by a court of competent jurisdiction or as otherwise agreed to by the parties). All such amounts shall be payable in accordance with <u>Section 4(c)</u>. In the event any such indemnity amounts are distributed to Paying Agent from the Collection Account pursuant to <u>Section 4(c)</u> prior to deposit by Borrowers of such indemnity amounts therein, the obligation of reimbursement by Borrowers with respect to such indemnity amounts will instead be payable to the Collection Account. The foregoing indemnification shall survive the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)Paying Agent shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by Paying Agent in such capacity herein. No implied covenants or obligations shall be read into this Agreement against Paying Agent, and no permissive right or privilege of Paying Agent shall be construed as a duty. In the absence of gross negligence, fraud or willful misconduct on the part of Paying Agent, Paying Agent may conclusively rely and shall be protected in relying upon the truth of any statements and written direction or instruction and the correctness of the opinions expressed in any certificates or opinions furnished to Paying Agent pursuant to and conforming to the requirements of this Agreement. In no event shall Paying Agent be liable for any special, indirect, consequential or punitive damages, even if Paying Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)Paying Agent shall not be liable for (A) an error of judgment made in good faith by one of its officers; or (B) any action taken, suffered or omitted to be taken in good faith in accordance with or believed by it to be authorized or within the discretion or rights or powers conferred by this Agreement or at the direction of Administrative Agent relating to the exercise of any power conferred upon Paying Agent under this Agreement, in each case, unless it shall be proved that Paying Agent shall have been grossly negligent in ascertaining the pertinent facts or have acted with actual fraud or willful misconduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)Paying Agent shall not be charged with knowledge of any Default, Event of Default or Early Amortization Trigger unless a Responsible Officer of Paying Agent obtains actual knowledge of such event or Paying Agent receives written notice of such event from Borrowers or Administrative Agent, as the case may be.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)Without limiting the generality of this <u>Section 17(a)</u>, Paying Agent shall have no duty (A) to record, file or deposit this Agreement or any agreement referred to herein or prepare or file any financing statement or continuation statement evidencing a security interest in the Collateral, or maintain any such recording, filing or depositing or to subsequently record, re-file or redeposit any of the same, (B) to pay or discharge any Taxes, assessment or other governmental charge or any Lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Assets, (C) to confirm, recalculate or verify the contents, accuracy or completeness of any reports or certificates of Administrative Agent or Calculation Agent delivered to Paying Agent pursuant to this Agreement believed by Paying Agent to be genuine and to have been signed or presented by the proper party or parties or (D) to ascertain or inquire as to the performance or observance of any of Borrowers' representations, warranties or covenants under this Agreement or any other Facility Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)Paying Agent shall not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if there shall be reasonable grounds for believing that the repayment of such funds or adequate indemnity against such risk or liability shall not be reasonably assured to it, and none of the provisions contained in this Agreement shall in any event require Paying Agent to perform, or be responsible for the manner of performance of, any of the obligations of Borrowers under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi)Paying Agent may conclusively rely in good faith and shall be protected in acting or refraining in good faith from acting upon any resolution, any certificate of a Responsible Officer of Administrative Agent, any Periodic Remittance Report, any certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii)Paying Agent may consult with nationally recognized counsel of its choice with regard to legal questions arising out of or in connection with this Agreement and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, omitted or suffered by Paying Agent in good faith and in accordance therewith. In connection with any request that Paying Agent take any action or refrain from taking any action outside the scope of this Agreement, Paying Agent shall be entitled to request and conclusively rely upon, and shall be protected in acting or refraining from acting upon, an officer's certificate or opinion of counsel. Any opinion of counsel requested by Paying Agent shall be an expense of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii)Paying Agent shall be under no obligation to exercise any of the rights, powers or remedies vested in it by this Agreement (except to comply with its obligations under this Agreement and any other Facility Document to which it is a party) or to institute, conduct or defend any litigation under this Agreement or in relation to this Agreement, at the request, order or direction of Administrative Agent pursuant to the provisions of this Agreement, unless Administrative Agent, on behalf of the Indemnified Parties, shall have offered to Paying Agent security or indemnity reasonably satisfactory to Paying Agent

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against the costs, expenses and liabilities that may be incurred therein or thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv)Paying Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing so to do by Administrative Agent; <u>provided</u>, that if the payment within a reasonable time to Paying Agent of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation shall be, in the opinion of Paying Agent, not reasonably assured by Borrowers, Paying Agent may require indemnity reasonably satisfactory to Paying Agent from Lenders against such cost, expense or liability as a condition to so proceeding. The reasonable expense of every such examination shall be paid by Borrowers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv)Paying Agent shall not be responsible for the acts or omissions of Administrative Agent, Calculation Agent (unless the same entity is then acting as Calculation Agent and Paying Agent), Borrowers, any Lenders or any other Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi)Any Person into which Paying Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which to Paying Agent shall be a party, or any Person succeeding to all or substantially all of the corporate trust business of Paying Agent, shall be the successor of Paying Agent under this Agreement, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii)Paying Agent does not assume and shall have no responsibility for, and makes no representation as to, monitoring the value of the SF Properties or the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii)Paying Agent is authorized, in its good faith discretion, to disregard any and all notices or instructions given by any other party hereto or by any other person, firm or corporation, except only such notices or instructions as are herein provided for and orders or process of any court entered or issued with or without jurisdiction. If any property subject hereto is at any time attached, garnished or levied upon under any court order or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered into by any court affecting such property or any part thereof, then and in any of such events Paying Agent is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree with which it is advised by legal counsel of its own choosing is binding upon it, and if it complies with any such order, writ, judgment or decree it shall not be liable to any other party hereto or to any other person, firm or corporation by reason of such compliance even though such order, writ, judgment or decree maybe subsequently reversed, modified, annulled, set aside or vacated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix)Paying Agent may: (A) terminate its obligations as Paying Agent under this Agreement (subject to the terms set forth herein) upon at least thirty (30) days' prior written notice to Borrower Representative, Lenders and Administrative Agent; <u>provided</u>, <u>however</u>, that, without the consent of Administrative Agent, such resignation shall not be

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effective until a successor paying agent acceptable to Administrative Agent shall have accepted appointment as Paying Agent, pursuant hereto and shall have agreed to be bound by the terms of this Agreement; or (B) be removed upon at least thirty (30) days' prior written notice (or such shorter period as shall be acceptable to Paying Agent) by Administrative Agent, delivered to Paying Agent, Lenders and Borrower Representative; <u>provided</u>, <u>however</u>, that without the consent of Administrative Agent, such removal shall not be effective until a successor paying agent acceptable to Administrative Agent shall have accepted appointment as Paying Agent pursuant hereto and shall have agreed to be bound by the terms of this Agreement. In the event of such termination or removal, Administrative Agent shall make reasonable efforts to appoint a successor paying agent. If, however, a successor paying agent is not appointed by Administrative Agent within ninety (90) days after the giving of such notice of resignation, Paying Agent may petition a court of competent jurisdiction for the appointment of a successor paying agent, and the costs of such petition shall be paid by Borrowers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx)Any successor paying agent appointed pursuant hereto shall execute, acknowledge, and deliver to Administrative Agent, Borrower Representative and to the predecessor Paying Agent an instrument accepting such appointment under this Agreement. Thereupon, the resignation or removal of the predecessor Paying Agent shall become effective and such successor paying agent, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties, and obligations of its predecessor as Paying Agent under this Agreement, with like effect as if originally named as Paying Agent. The predecessor Paying Agent shall, upon payment of its outstanding fees and expenses, deliver to the successor paying agent all documents and statements and monies held by it under this Agreement; and Administrative Agent and the predecessor Paying Agent shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor paying agent all such rights, powers, duties, and obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxi)In the event Paying Agent's appointment hereunder is terminated without cause, Administrative Agent shall (A) reimburse Paying Agent for the reasonable out-of-pocket expenses of Paying Agent incurred in transferring any funds in its possession to the successor paying agent and (B) if such termination occurs on or prior to the first anniversary of the appointment of such Paying Agent, pay to the terminated Paying Agent a termination fee equal to the unearned prorated portion of Paying Agent Fee for that first year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxii)Borrower Parties hereby agree, in connection with an appointment of a successor paying agent, to negotiate in good faith any modifications to this Agreement related to the rights and obligations of Paying Agent which are commercially reasonably requested by such successor paying agent; provided that, the effect of any such modifications shall not increase the obligations of any Borrower Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiii)Knowledge or information acquired by (A) Wells Fargo Bank, National Association in any of its respective capacities hereunder or under any other document related to this transaction shall not be imputed to Wells Fargo Bank, National Association in any of its other capacities hereunder or under such other documents except to the extent

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their respective duties are performed by Responsible Officers in the same division of Wells Fargo Bank, National Association, and (B) any Affiliate of Wells Fargo Bank, National Association shall not be imputed to Wells Fargo Bank, National Association in any of its respective capacities hereunder and vice versa.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiv)Other than with respect to any information that Paying Agent has an express duty hereunder to review, Paying Agent shall not be deemed to have knowledge of any fact or matter for purposes of this Agreement unless a Responsible Officer of Paying Agent (A) has actual knowledge thereof or (B) receives written notice with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxv)Paying Agent shall not be under any obligation to take any action in the performance of its respective duties hereunder that would be in violation of applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxvi)The recitals contained herein shall not be taken as the statements of Paying Agent and Paying Agent assumes no responsibility for their correctness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxvii)The parties hereto acknowledge that in accordance with the Anti-Money Laundering Laws, including without limitation the Patriot Act, and regulations promulgated by the U.S. Treasury Department's Office of Foreign Assets Control, Paying Agent is required to obtain, verify and record information that identifies each person or legal entity that establishes a relationship or opens an account with Paying Agent. Each party hereby agrees that it shall provide Paying Agent with such information in its possession as Paying Agent may reasonably request from time to time in order to comply with any applicable requirements of the Anti-Money Laundering Laws and related regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxviii)For purposes of satisfying any information collection and tax reporting obligations under the Code and Treasury Regulations (including, without limitation and to the extent applicable, any cost basis reporting obligations thereunder), each Borrower and each Lender agrees to provide to Paying Agent all information in its possession required by the Code and Treasury Regulations to be provided by such person (or as reasonably requested by Paying Agent), to permit Paying Agent to satisfy its obligations thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxix)Paying Agent may delegate or perform any of its duties under this Agreement by or through sub-agents appointed by Paying Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Calculation Agent</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Wells Fargo Bank, National Association is hereby appointed as the initial Calculation Agent and is authorized to take such actions and to exercise such powers and perform such duties as are expressly delegated to Calculation Agent by the terms hereof, together with such other powers as are reasonably incidental thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)The duties of Calculation Agent hereunder shall be limited to (x) verifying and preparing calculations (collectively, the "<u>Calculations</u>") with

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respect to each Advance Request, each Optional Repayment, each Periodic

Remittance Report and each compliance certificate based solely on information provided to Calculation Agent by Borrowers, in each case, as set forth on a calculations schedule agreed to in writing by Borrowers, Calculation Agent and Administrative Agent and appended hereto as <u>Schedule 5</u> (which such Schedule may be amended from time to time pursuant to the written agreement of Calculation Agent and Administrative Agent), (y) determining the Benchmark hereunder and (z) maintaining the records set forth in <u>Section 2(e)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)Calculation Agent shall verify and prepare the Calculations as set forth herein. Calculation Agent shall use good faith efforts in verifying and preparing any Calculations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)In the event of a discrepancy between the calculations received by Calculation Agent and the results of the verification conducted by Calculation Agent, Calculation Agent shall give prompt written notice (which may be in electronic form) of such discrepancy to Borrower Representative and Administrative Agent, and Calculation Agent shall work with such parties in good faith to resolve such discrepancy. In each case, the final result agreed to by the parties with respect to such Calculations shall be approved in writing (which may be in electronic form) by Borrower Representative and Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)Each of Borrowers, Lenders and Administrative Agent agree that so long as Calculation Agent complies with the terms of <u>clauses (B)</u> and <u>(C)</u> above, Calculation Agent shall have no liability with respect to any Calculations that are verified and prepared by Calculation Agent (including pursuant to consultations described in <u>clause (C)</u> above) that are subsequently determined to be incorrect, except to the extent of Calculation Agent's fraud, gross negligence or willful misconduct. For avoidance of doubt, such exculpation from liability shall include, without limitation, any loss, liability or expense of Lenders incurred as a result of lending to Borrowers based on any such erroneous calculations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)On each Remittance Date, Borrowers shall pay to Calculation Agent any Calculation Agent Fee due to Calculation Agent pursuant to <u>Section 4(c)(i)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Any successor calculation agent shall be appointed by Administrative Agent subject to providing notice thereof to Lenders and Borrower Representative. Administrative Agent and Borrower Representative shall mutually agree on the customary and reasonable fees required to engage the services of any such successor calculation agent to the extent that such fees exceed those paid to the prior Calculation Agent and upon such mutual agreement, such approved fee shall constitute the Calculation Agent Fee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)Borrowers shall indemnify Calculation Agent and its officers, directors, employees and agents (each, a "<u>CA Party</u>" and collectively, the "<u>CA Parties</u>") for, and hold them harmless against, any loss, liability, damage, cost or expense (including reasonable attorneys' fees) incurred in connection with or arising out of (A) the

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performance of its obligations under and in accordance with this Agreement, including without limitation the costs and expenses of (x) investigating any claim or allegation relating to the exercise or performance of any of its powers or duties under this Agreement, and (y) preparing for, and prosecuting or defending itself against any investigation, legal proceeding, whether pending or threatened, related to any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement; (B) pursuing enforcement (including without limitation by means of any action, claim, or suit brought by Calculation Agent for such purpose) of any indemnification or other obligation of Borrowers (the indemnification afforded under this <u>subclause (B)</u> to include, without limitation, any reasonable legal fees, costs and expenses incurred by Calculation Agent in connection therewith) and (C) the gross negligence, willful misconduct or actual fraud of any Borrower in the performance of its duties hereunder, except in each case to the extent any such loss, liability or expense results from the gross negligence, willful misconduct or actual fraud of Calculation Agent or any CA Party (in each case, as determined by a court of competent jurisdiction pursuant or as otherwise agreed to by the parties). All such indemnification amounts shall be payable in accordance with <u>Section 4(c)</u>. In the event any such indemnity amounts are distributed to Calculation Agent from the Collection Account pursuant to <u>Section 4(c)</u> prior to deposit by Borrowers of such indemnity amounts therein, the obligation of reimbursement by Borrowers with respect to such indemnity amounts will instead be payable to the Collection Account. The foregoing indemnification shall survive the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)Calculation Agent shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by Calculation Agent in such capacity herein. No implied covenants or obligations shall be read into this Agreement against Calculation Agent, and no permissive right or privilege of Calculation Agent shall be construed as a duty. In the absence of gross negligence, fraud or willful misconduct on the part of Calculation Agent, Calculation Agent may conclusively rely and shall be protected in relying upon the truth of any statements and written direction or instruction and the correctness of the opinions expressed in any certificates or opinions furnished to Calculation Agent pursuant to and conforming to the requirements of this Agreement. Calculation Agent shall not be responsible for verifying any calculations pursuant to this Agreement to the extent information necessary to make such verifications is not provided to it by Administrative Agent or Borrowers. In no event shall Calculation Agent be liable for any special, indirect, consequential or punitive damages, even if Calculation Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)Calculation Agent shall not be liable for (A) an error of judgment made in good faith by one of its officers; or (B) any action taken, suffered or omitted to be taken in good faith in accordance with or believed by it to be authorized or within the discretion or rights or powers conferred by this Agreement or at the direction of Administrative Agent relating to the exercise of any power conferred upon Calculation Agent under this Agreement, in each case, unless it shall be proved that Calculation Agent shall have been grossly negligent in ascertaining the pertinent facts or have acted with actual fraud or willful misconduct.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)Calculation Agent shall not be charged with knowledge of any Default, Event of Default or Early Amortization Trigger unless a Responsible Officer of Calculation Agent obtains actual knowledge of such event or Calculation Agent receives written notice of such event from Borrowers or Administrative Agent, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)Without limiting the generality of this <u>Section 17(b)</u>, Calculation Agent shall have no duty (A) to record, file or deposit this Agreement or any agreement referred to herein or prepare or file any financing statement or continuation statement evidencing a security interest in the Collateral, or maintain any such recording, filing or depositing or to subsequently record, re-file or redeposit any of the same, (B) to pay or discharge any Taxes, assessment or other governmental charge or any Lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Assets, (C) to confirm, recalculate or verify the contents, accuracy or completeness of any reports or certificates of Borrowers or Administrative Agent delivered to Calculation Agent pursuant to this Agreement believed by Calculation Agent to be genuine and to have been signed or presented by the proper party or parties or (D) to ascertain or inquire as to the performance or observance of any of Borrowers' representations, warranties or covenants under this Agreement or any other Facility Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)Calculation Agent shall not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if there shall be reasonable grounds for believing that the repayment of such funds or adequate indemnity against such risk or liability shall not be reasonably assured to it, and none of the provisions contained in this Agreement shall in any event require Calculation Agent to perform, or be responsible for the manner of performance of, any of the obligations of Borrowers under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi)Calculation Agent may conclusively rely in good faith and shall be protected in acting or refraining in good faith from acting upon any resolution, any certificate of a Responsible Officer, any report, any certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii)Calculation Agent may consult with nationally recognized counsel of its choice with regard to legal questions arising out of or in connection with this Agreement and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, omitted or suffered by Calculation Agent in good faith and in accordance therewith. In connection with any request that Calculation Agent take any action or refrain from taking any action outside the scope of this Agreement, Calculation Agent shall be entitled to request and conclusively rely upon, and shall be protected in acting or refraining from acting upon, an officer's certificate or opinion of counsel. Any opinion of counsel requested by Calculation Agent shall be an expense of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii)Calculation Agent shall be under no obligation to exercise any of the rights, powers or remedies vested in it by this Agreement (except to comply with its obligations under this Agreement and any other Facility Document to which it is a party) or to

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institute, conduct or defend any litigation under this Agreement or in relation to this Agreement, at the request, order or direction of Administrative Agent pursuant to the provisions of this Agreement, unless Administrative Agent, on behalf of the Indemnified Parties, shall have offered to Calculation Agent security or indemnity reasonably satisfactory to Calculation Agent against the costs, expenses and liabilities that may be incurred therein or thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv)Calculation Agent shall not be bound to make any investigation into the facts of matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing so to do by Administrative Agent; <u>provided</u>, that if the payment within a reasonable time to Calculation Agent of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation shall be, in the opinion of Calculation Agent, not reasonably assured by Borrowers, Calculation Agent may require indemnity reasonably satisfactory to Calculation Agent from Lenders against such cost, expense or liability as a condition to so proceeding. The reasonable expense of every such examination shall be paid by Borrowers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv)Calculation Agent shall not be responsible for the acts or omissions of Administrative Agent, Paying Agent (unless the same entity is then acting as Calculation Agent and Paying Agent), Borrowers, any Lenders or any other Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi)Any Person into which Calculation Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which to Calculation Agent shall be a party, or any Person succeeding to all or substantially all of the corporate trust business of Calculation Agent, shall be the successor of Calculation Agent under this Agreement, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii)Calculation Agent does not assume and shall have no responsibility for, and makes no representation as to, monitoring the value of the SF Properties or the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii)Calculation Agent is authorized, in its sole discretion, to disregard any and all notices or instructions given by any other party hereto or by any other person, firm or corporation, except only such notices or instructions as are herein provided for and orders or process of any court entered or issued with or without jurisdiction. If any property subject hereto is at any time attached, garnished or levied upon under any court order or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property or any part hereof, then and in any of such events Calculation Agent is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree with which it is advised by legal counsel of its own choosing is binding upon it, and if it complies with any such order, writ, judgment or decree it shall not be liable to any other party hereto or to any other person, firm or corporation by reason of such compliance even though such order, writ, judgment or decree maybe subsequently reversed, modified, annulled, set aside or

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vacated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix)Calculation Agent may: (A) terminate its obligations as Calculation Agent under this Agreement (subject to the terms set forth herein) upon at least thirty (30) days' prior written notice to Borrower Representative, Lenders and Administrative Agent; <u>provided</u>, <u>however</u>, that, without the consent of Administrative Agent, such resignation shall not be effective until a successor calculation agent acceptable to Administrative Agent shall have accepted appointment as Calculation Agent, pursuant hereto and shall have agreed to be bound by the terms of this Agreement; or (B) be removed upon at least thirty (30) days' prior written notice (or such shorter period as shall be acceptable to Calculation Agent) by Administrative Agent, delivered to Calculation Agent, Lenders and Borrower Representative; <u>provided</u>, <u>however</u>, that without the consent of Administrative Agent such removal shall not be effective until a successor calculation agent acceptable to Administrative Agent shall have accepted appointment as Calculation Agent pursuant hereto and shall have agreed to be bound by the terms of this Agreement. In the event of such termination or removal, Administrative Agent shall make reasonable efforts to appoint a successor calculation agent. If, however, a successor calculation agent is not appointed by Administrative Agent within ninety (90) days after the giving of such notice of resignation, Calculation Agent may petition a court of competent jurisdiction for the appointment of a successor calculation agent, and the costs of such petition shall be paid by Borrowers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx)Any successor calculation agent appointed pursuant hereto shall execute, acknowledge, and deliver to Administrative Agent, Borrower Representative and to the predecessor Calculation Agent an instrument accepting such appointment under this Agreement. Thereupon, the resignation or removal of the predecessor Calculation Agent shall become effective and such successor calculation agent, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties, and obligations of its predecessor as Calculation Agent under this Agreement, with like effect as if originally named as Calculation Agent. The predecessor Calculation Agent shall, upon payment of its outstanding fees and expenses, deliver to the successor calculation agent all documents and statements and monies held by it under this Agreement; and Administrative Agent and the predecessor Calculation Agent shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor calculation agent all such rights, powers, duties, and obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxi)In the event Calculation Agent's appointment hereunder is terminated without cause, Administrative Agent shall (A) reimburse Calculation Agent for the reasonable out-of-pocket expenses of Calculation Agent incurred in transferring any funds in its possession to the successor calculation agent and (B) if such termination occurs on or prior to the first anniversary of the appointment of such Calculation Agent, pay to the terminated Calculation Agent a termination fee equal to the unearned prorated portion of Calculation Agent Fee for that first year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxii)Borrower Parties hereby agree, in connection with an appointment of a successor calculation agent, to negotiate in good faith any modifications to this

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Agreement related to the rights and obligations of Calculation Agent which are commercially reasonably requested by such successor calculation agent; provided that, the effect of any such modifications shall not increase the obligations of any Borrower Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiii)Other than with respect to any information that Calculation Agent has an express duty hereunder to review, Calculation Agent shall not be deemed to have knowledge of any fact or matter for purposes of this Agreement unless a Responsible Officer of Calculation Agent (A) has actual knowledge thereof or (B) receives written notice with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiv)Calculation Agent shall not be under any obligation to take any action in the performance of its respective duties hereunder that would be in violation of applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxv)The recitals contained herein shall not be taken as the statements of Calculation Agent and Calculation Agent assumes no responsibility for their correctness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxvi)The parties hereto acknowledge that in accordance with requirements established under the Anti-Money Laundering Laws, including without limitation the Patriot Act, and regulations promulgated by the U.S. Treasury Department's Office of Foreign Assets Control, Calculation Agent is required to obtain, verify and record information that identifies each person or legal entity that establishes a relationship or opens an account with Calculation Agent. Each party hereby agrees that it shall provide Calculation Agent with such information in its possession as Calculation Agent may reasonably request from time to time in order to comply with any applicable requirements of the Anti-Money Laundering Laws and related regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxvii)If Calculation Agent shall at any time receive conflicting instructions from Administrative Agent and Borrowers or any other party to this Agreement and the conflict between such instructions cannot be resolved by reference to the terms of this Agreement, Calculation Agent shall be entitled to rely on the instructions of Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxviii)Calculation Agent may delegate or perform any of its duties under this Agreement by or through sub-agents appointed by Calculation Agent.

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Section 18. <u>Assignability</u>.The rights and obligations of the parties under this Agreement and under any Advance shall not be assigned by any Borrower without the prior written consent of Administrative Agent. Subject to the foregoing, this Agreement and any Advance shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. Nothing in this Agreement express or implied, shall give to any Person, other than the parties to this Agreement and their successors and permitted assigns hereunder, any benefit of any legal or equitable right, power, remedy or claim under this Agreement. Each Lender, upon at least five (5) Business Days' written notice to Borrower Representative and Calculation Agent, may from time to time assign all or a portion of its rights and obligations under this Agreement and the other Facility Documents to any Affiliate of Lender without consent of the Borrowers or any other Person with prior written consent of Borrowers (such consent not to be unreasonably withheld or delayed; <u>provided</u>, that no such consent shall be required if an Event of Default has occurred and is continuing) pursuant to an executed assignment and acceptance by such Lender and assignee ("<u>Assignment and Acceptance</u>"), specifying the percentage or portion of such rights and obligations assigned. Administrative Agent and each Lender acknowledges and agrees that it shall be considered reasonable for a Borrower to withhold its consent in connection with an assignment to a competitor of such Borrower or any of its Affiliates. Upon such assignment, (a) such assignee shall be a party hereto and to each Facility Document to the extent of the percentage or portion set forth in the Assignment and Acceptance, and shall succeed to the applicable rights and obligations of such Lender hereunder, and (b) such Lender shall, to the extent that such rights and obligations have been so assigned by it be released from its obligations hereunder and under the Facility Documents. Each such Assignment and Acceptance shall be delivered to Administrative Agent. Unless otherwise stated in the Assignment and Acceptance, Borrower Parties and Calculation Agent shall continue to take directions solely from Lender unless otherwise notified by Administrative Agent in writing. Administrative Agent may distribute to any prospective assignee any document or other information delivered to the applicable Lender by Borrower Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Each Lender, upon at least five (5) Business Days' notice to Borrower Representative, may sell participations to one or more Persons in or to all or a portion of its rights and obligations under this Agreement to any Person; <u>provided</u>, <u>however</u>, that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) Borrower Parties shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and the other Facility Documents except as provided in <u>Section 6</u>; <u>provided</u>, that no such restrictions shall apply with respect to any sale to any Affiliate of such Lender or if an Event of Default has occurred and is continuing; and provided further that such Lender shall act as agent for all purchasers, assignees and point of contact for Borrowers pursuant to agency provisions to be agreed upon by such Lender, its intended purchasers and/or assignees and Borrowers. Each Lender that sells a participation shall, acting solely for this purpose as agent of Borrowers, maintain a register on which it enters the name and address of each participant and amount of each participant's interest under this Agreement (the "<u>Participant Register</u>"). The entries in the Participant Register shall be conclusive and binding absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Each Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this <u>Section 18</u>, disclose to the assignee or participant or proposed assignee or participant, as the case may be, any information relating to a Borrower Party or any of its Subsidiaries or to any aspect of the Advances that has been furnished to such Lender by or on behalf of a Borrower Party or any of its Subsidiaries; <u>provided</u>, that such assignee or participant agrees to hold such information subject to the confidentiality provisions of this Agreement.

Section 19. <u>Transfer Register</u>. Administrative Agent, acting solely for this purpose as agent of Borrowers, shall maintain a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of each assignee or participant of a Lender, and the percentage or portion of such rights and obligations assigned or participated (the "<u>Register</u>"). The entries in the Register shall be conclusive absent manifest error, and Borrowers, Administrative Agent and Lenders, shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement.<u>Tax Treatment</u>. Each party to this Agreement acknowledges that it is its intent for purposes of U.S. federal and relevant state and local income and franchise taxes, to treat each Advance as indebtedness of Borrower that is secured by the Collateral and that the Collateral is owned by Borrower in the absence of an Event of Default by a Borrower. All parties to this Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless required by a change in law occurring after the date hereof, a closing agreement with an applicable taxing authority, or a final non-appealable judgment of a court of competent jurisdiction.<u>Set-Off</u>.In addition to any rights and remedies of Administrative Agent hereunder and by law, following the occurrence and continuance of an Event of Default, Administrative Agent shall have the right, without prior notice to Borrowers, any such notice being expressly waived by each Borrower to the extent permitted by all Requirements of Law to set-off and appropriate and apply against any obligation from a Borrower to Administrative Agent or any Lender or any of its respective Affiliates any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other obligation (including to return excess margin), credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by or due from Administrative Agent or such Lender or any Affiliate thereof to or for the credit or the account of Borrowers. Administrative Agent agrees to notify Borrowers after any such set-off and application made by Administrative Agent; <u>provided</u>, that the failure to give such notice shall not affect the validity of such set-off and application.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Administrative Agent shall at any time have the right, in each case until such time as Administrative Agent determines otherwise, to retain, to suspend payment or performance of, or to decline to remit, any amount or property that Administrative Agent or any Lender would otherwise be obligated to pay, remit or deliver to Borrowers hereunder if an Event of Default has occurred and is continuing.

Section 22. <u>Survival</u>. Each representation and warranty made or deemed to be made by a Borrower receiving an Advance, herein or pursuant hereto shall survive the making of such representation and warranty, and other than as contemplated hereunder, Administrative Agent shall not be deemed to have waived any Default that may arise because any such representation or warranty shall have proved to be false or misleading, notwithstanding that Administrative

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Agent may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time the Advance was made. The obligations of Borrowers under <u>Section 15</u> hereof shall survive the termination of this Agreement.<u>Notices and</u> <u>Other Communications</u>. Unless otherwise specified in this Agreement, all notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given and received (i) when sent by telecopy, upon receipt of an electronically generated confirmation of receipt by the addressee, or delivered personally or (ii) upon transmission of email provided no electronic notice of non-delivery is received by the sender or (iii) on the first (1st) Business Day after being sent by nationally recognized overnight delivery service or (iv) on the third (3rd) Business Day after being sent by registered or certified U.S. mail (postage prepaid, return receipt requested) to the parties at the telecopy number, email address or street address set forth in the "Address for Notices" specified below its name on the signature pages hereof or thereof); or, as to any party, at such other address as shall be designated by such party in a written notice to each other party hereto. In all cases, to the extent that the related individual set forth in the respective "Attention" line is no longer employed by the respective Person, such notice may be given to the attention of a Responsible Officer of the respective Person or to the attention of such individual or individuals as subsequently notified in writing by a Responsible Officer of the respective Person.<u>Entire Agreement; Severability; Single</u> <u>Agreement</u>.This Agreement, together with the Facility Documents, constitute the entire understanding among Administrative Agent, Lenders and Borrowers with respect to the subject matter they cover and shall supersede any existing agreements between the parties containing general terms and conditions for loan transactions involving Financed SF Properties. By acceptance of this Agreement, Administrative Agent, each Lender and each Borrower acknowledges that it has not made, and is not relying upon, any statements, representations, promises or undertakings not contained in this Agreement. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Lender and each Borrower acknowledges that, and has entered hereinto and Lender will make each Advance hereunder in consideration of and in reliance upon the fact that, all Advances made by Lenders hereunder constitute a single business and contractual relationship and that each has been entered into in consideration of the other Advances made by Lenders hereunder. Accordingly, each Lender and each Borrower agrees (i) to perform all of its obligations in respect of each Advance, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Advances hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Advance against obligations owing to them in respect of any other Advance hereunder; (iii) that payments, deliveries, and other transfers made by either of them in respect of any Advance shall be deemed to have been made in consideration of payments, deliveries, and other transfers in respect of any other Advances hereunder, and the obligations to make any such payments, deliveries, and other transfers may be applied against each other and netted and (iv) to promptly provide notice to the other after any such set off or application.

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Section 25. <u>GOVERNING LAW</u>. THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF, OTHER THAN SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH SHALL GOVERN.<u>SUBMISSION TO JURISDICTION; WAIVERS</u>. ADMINISTRATIVE AGENT, EACH LENDER, BORROWER REPRESENTATIVE, EACH BORROWER, CALCULATION AGENT AND PAYING AGENT EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY:**SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER FACILITY DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)**TO THE EXTENT PERMITTED BY REQUIREMENTS OF LAW, EACH BORROWER HEREBY WAIVES ANY RIGHT TO CLAIM OR RECOVER IN ANY LITIGATION WHATSOEVER WHETHER OR NOT INVOLVING ANY INDEMNIFIED PARTY, ANY SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES, WHETHER SUCH WAIVED DAMAGES ARE BASED ON STATUTE, CONTRACT, TORT, COMMON LAW OR ANY OTHER LEGAL THEORY, WHETHER THE LIKELIHOOD OF SUCH DAMAGES WAS KNOWN AND REGARDLESS OF THE FORM OF THE CLAIM OF ACTION. NO INDEMNIFIED PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH ANY FACILITY DOCUMENT.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)**CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)**AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED;**

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)**AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)**ADMINISTRATIVE AGENT, EACH LENDER, BORROWER REPRESENTATIVE, BORROWERS, CALCULATION AGENT AND PAYING AGENT HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY ALL REQUIREMENTS OF LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER FACILITY DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.**

Section 27. <u>No Waivers, etc</u>. No failure on the part of Administrative Agent to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any Facility Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any Facility Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.<u>Cross-Default; Cross-Collateralization; Waiver of Marshalling of Assets</u>.Each Borrower hereby acknowledges that Lenders have made the Advances to such Borrower upon, among other things, the security of its collective interest in the Financed SF Properties and in reliance upon the aggregate of the Financed SF Properties taken together being of greater value as collateral security than the sum of each Financed SF Property taken separately. Each Borrower agrees that the Mortgages, if any, are and will be cross-collateralized and cross-defaulted with each other so that (i) an Event of Default under any of the Mortgages, if any, shall constitute an Event of Default under each of the other Mortgages, if any; (ii) an Event of Default under the Note or this Agreement shall constitute an Event of Default under each Mortgage, if any; (iii) each Mortgage, if any, shall constitute security as if a single blanket lien were placed on all of the Financed SF Properties as security; and (iv) such cross-collateralization shall in no event be deemed to constitute a fraudulent conveyance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To the fullest extent permitted by law, each Borrower for itself and its successors and assigns, waives all rights upon the occurrence and continuance of an Event of Default to a marshalling of the assets of such Borrower, such Borrower's partners or members and of the Financed SF Properties, or to a sale in inverse order of alienation in the event of foreclosure of all or any of the Mortgages, if any, and agrees not to assert any right under any laws pertaining to the marshalling of assets, the sale in inverse order of alienation, homestead exemption, the administration of estates of decedents, or any other matters whatsoever to defeat, reduce or affect the right of Administrative Agent under the Facility Documents to a sale of the Financed SF Properties for the collection of the Secured Obligations without any prior or different resort for collection or of the right of Administrative Agent to the payment of the Secured Obligations out of the net proceeds of the Financed SF Properties in preference to every other claimant whatsoever. In addition, each Borrower, for itself and its successors and assigns, waives in the event of foreclosure of any or all of the Mortgages, if any, any equitable right otherwise available to such Borrower which would require the separate sale of the Financed SF Properties or require Administrative Agent to exhaust its remedies against any Financed SF Property or any combination of the Financed SF Properties before proceeding against any other Financed SF

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Property or combination of Financed SF Properties; and further in the event of such foreclosure each Borrower does hereby expressly consent to and authorizes, at the option of Administrative Agent the foreclosure and sale either separately or together of any combination of the Financed SF Properties.

Section 29. <u>Confidentiality</u>.Each Lender, Administrative Agent, Calculation Agent and Paying Agent hereby acknowledges and agrees that all Borrower Confidential Information, and each Borrower, each Lender and Administrative Agent hereby acknowledges and agrees that all Confidential Terms, shall be kept confidential by the party receiving such information (the "<u>Recipient</u>") and shall not be divulged to any Person without the prior written consent of the party providing such information (the "<u>Disclosing Party</u>") except to the extent that (i) it is necessary to disclose to Recipient's Affiliates and its and their directors, officers, employees, agents, advisors, legal counsel, accountants, auditors, or taxing authorities, or, in the case of a Borrower, its lenders or its Affiliates' lenders (collectively, "<u>Representatives</u>"), (ii) a Borrower may disclose any Confidential Term to an investor or potential investor of any Borrower-Related Party or its lenders; <u>provided</u>, that, such investor, potential investor or lender executes a confidentiality or non-disclosure agreement with such Borrower-Related Party with respect to the Confidential Terms; (iii) Recipient is requested or required by governmental agencies, regulatory bodies, self-regulatory organizations with jurisdiction, bank examiners, or pursuant to legal proceedings (including, without limitation, orders, subpoenas or discovery requests), or other governmental or regulatory process, (iv) the Confidential Terms were known by Recipient or its Representatives prior to being furnished under this Agreement, (v) the Confidential Terms were provided to Recipient or its Representatives by a third party not known to Recipient at the time of disclosure to be subject to a duty of confidentiality to the Disclosing Party, (vi) any of the Confidential Terms are in the public domain other than due to a breach of this covenant, or (vii) an Event of Default has occurred and is continuing and Administrative Agent determines such information to be necessary or desirable to disclose in connection with the marketing and sales of the Collateral or otherwise enforce or exercise Administrative Agent's rights hereunder. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Facility Document, a Borrower or Lender (or any of its Representatives) may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment of the Advances, any fact relevant to understanding the federal, state and local tax treatment of the Advances, and all materials of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant to understanding such tax treatment. The provisions set forth in this <u>Section 30</u> shall survive the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything in this Agreement to the contrary, Borrowers, each Lender, Administrative Agent, Calculation Agent and Paying Agent shall comply with all applicable local, state and federal laws, including all privacy and data protection law, rules and regulations that are applicable to the Collateral and/or any applicable terms of this Agreement (the "<u>Confidential Information</u>"). Borrowers, each Lender, Administrative Agent, Calculation Agent and Paying Agent understand that the information provided by one party to any other party regarding the Collateral and the transactions contemplated hereunder may contain "nonpublic personal information", as that term is defined in Section 509(4) of the Gramm-Leach-Bliley Act (the "<u>GLB Act</u>"), and Borrowers, each Lender, Administrative Agent, Calculation Agent and Paying Agent agree to maintain such nonpublic personal information that such party receives

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hereunder in accordance with the GLB Act and other applicable federal, state and local privacy and data protection laws. Borrowers, each Lender, Administrative Agent, Calculation Agent and Paying Agent shall implement such administrative, technical and physical safeguards and other security measures to (a) ensure the security and confidentiality of the "nonpublic personal information" of the "customers" (as defined in the GLB Act) of Administrative Agent, Calculation Agent, Paying Agent, each Lender, each Borrower, as applicable, or any Affiliates of any of the foregoing which such Borrower, such Lender, Administrative Agent, Calculation Agent or Paying Agent holds, (b) protect against any anticipated threats or hazards to the security and integrity of such nonpublic personal information, and (c) protect against any unauthorized access to or use of such nonpublic personal information. Each Borrower, each Lender, Administrative Agent, Calculation Agent and Paying Agent shall, at a minimum, establish and maintain such data security program as is necessary to meet the objectives of the Interagency Guidelines Establishing Standards for Safeguarding Customer Information as set forth in the Code of Federal Regulations at 12 C.F.R. Parts 30, 208, 211, 225, 263, 308, 364, 568 and 570. Upon reasonable request from a party hereto, each Borrower, Borrower Representative, each Lender, Administrative Agent, Calculation Agent and Paying Agent shall, subject to the terms of its respective information security policies, cooperate with the requesting party in its efforts to confirm that each Borrower, Borrower Representative, each Lender, Administrative Agent, Calculation Agent and Paying Agent, as applicable, has satisfied its obligations as required under this Section 30. This may include Administrative Agent's, Calculation Agent's, Paying Agent's and any Lender's review of audits, summaries of test results, and other equivalent evaluations of each party hereto, subject to the terms of such party's information security policies. Each Borrower, Borrower Representative, each Lender, Administrative Agent, Calculation Agent and Paying Agent shall notify, to the extent permissible by applicable law, the applicable party immediately following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of the customers and consumers of Administrative Agent, Calculation Agent, Paying Agent, any Borrower, Borrower Representative, any Lender or any of its respective Affiliates, as applicable, provided directly to such party. Each Borrower, Borrower Representative, each Lender, Administrative Agent, Calculation Agent and Paying Agent shall provide such notice to the applicable party by personal delivery, by facsimile or email with confirmation of receipt, or by overnight courier with confirmation of receipt to the applicable requesting individual.

Section 30. <u>Conflicts</u>. In the event of any conflict between the terms of this Agreement and any other Facility Document, the documents shall control in the following order of priority: first, the terms of this Agreement shall prevail, and then the terms of the Facility Documents shall prevail.<u>Miscellaneous.Counterparts</u>. This Agreement and any Facility Document shall be valid, binding, and enforceable against a party when executed and delivered by an authorized individual on behalf of the party by means of (i) an original manual signature; (ii) a faxed, scanned, or photocopied manual signature, or (iii) any other electronic signature permitted by the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, and/or any other relevant electronic signatures law, including any relevant provisions of the Uniform Commercial Code, in each case to the extent applicable. Each faxed, scanned, or photocopied manual signature, or other electronic signature, shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Each party to this Agreement or any Facility Document shall be

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entitled to conclusively rely upon, and shall have no liability with respect to, any faxed, scanned, or photocopied manual signature, or other electronic signature, of any other party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof. This Agreement and any Facility Document may be executed in any number of counterparts, all of which when taken together shall constitute one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Captions</u>. The captions and headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Acknowledgment</u>. Each Borrower and Borrower Representative hereby acknowledges that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Facility Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)none of Administrative Agent, Calculation Agent, Paying Agent or any Lender has a fiduciary relationship to any Borrower-Related Party; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)no joint venture exists between Administrative Agent, Calculation Agent, Paying Agent or any Lender and any Borrower-Related Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Documents Mutually Drafted</u>. Borrowers, Borrower Representative, Administrative Agent, Calculation Agent, Paying Agent and each Lender agree that this Agreement and each other Facility Document prepared in connection with the Advances set forth herein have been mutually drafted and negotiated by each party, and consequently such documents shall not be construed against either party as the drafter thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Actions and Events Outside of Lenders' and Agents' Control</u>. None of the Servicing Agents shall be liable in any way to any Borrower Party or third party for any such Servicing Agent's failure to perform or delay in performing under the Facility Documents (and Servicing Agent may suspend or terminate all or any portion of such Servicing Agent's obligations under the Facility Documents) if such failure to perform or delay in performing results directly or indirectly from, or is based upon, any force majeure event, including, without limitation, any act of God, strike, act of any governmental authority, labor dispute, lockout, boycott, blockade, riot, act of war, terrorism, rebellion, insurrection, epidemic or pandemic, quarantine, fire, communication system failure, computer hardware or software failure, computer virus or malware, power failure, unavailability of the Federal Reserve Bank wire or telex system, natural disaster, earthquake or any other similar cause or event beyond such Servicing Agent's control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Exculpated Parties</u>. Administrative Agent and each Lender hereby acknowledges and agrees that no claim hereunder may be made by Administrative Agent or any Lender against any Exculpated Party and no Exculpated Party shall have any obligations or liability hereunder except to the extent expressly provided with respect to the Pledgor and the Guarantor pursuant to the Facility Documents.

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Section 32. <u>Amendments and Waivers.</u>Except as provided in this Section or as otherwise provided in this Agreement, no amendment, waiver, or other modification of any provision of this Agreement or any schedule or exhibit hereto shall be effective without the written agreement of the Borrowers, Administrative Agent and the Required Lenders; <u>provided</u> that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)no such amendment, waiver or other modification shall be effective without the written consent of each Class A Lender and/or each Class B Lender adversely affected thereby and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)without limiting the foregoing, the following amendments, waivers or other modifications shall, for the avoidance of doubt, require the written consent of each Class A Lender and/or Class B Lender to be effective:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)alter or change the Commitment of any Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)extend the Facility Termination Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)postpone any date scheduled for, or reduce the amount of, any payment of principal or interest owing under or change the order of the application of available funds specified herein (other than, for purposes of clarity, as provided in <u>Section 2(h)</u>);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)reduce (absent payment thereof) the amount of Advances Outstanding, the rate of interest thereon, any amount payable to any Lender or the currency applied to amounts due and payable in respect of the Advances Outstanding (other than, for purposes of clarity, as described in <u>Section 4(f)</u> herein);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)change any provision of this <u>Section 32</u>, the definition of "Pro Rata Share" or "Required Lenders" or any other provision specifying the number of Lenders or portion of the Advances Outstanding to take action under the Facility Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)release any claims accruing to the Lenders as secured parties hereunder or under applicable laws (other than, for purposes of clarity, as provided in <u>Section 2(i)</u>), without the written consent of each Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)accept any additional property as Collateral on any basis other than for the

pro rata benefit of the Lenders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)approve any Lien (other than Permitted Liens) on any Collateral senior to the interest of Administrative Agent's interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)release any Borrower, the Guarantor, the Asset Manager, or any Collateral from the provisions of any Facility Document (other than, for purposes of clarity, as provided in <u>Section 2(i)</u>); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)no such amendment, waiver or other modification shall:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)amend, waive or modify any provision of this Agreement applicable to the Asset Manager without the written consent of the Asset Manager; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)amend, waive or modify any provision of this Agreement applicable to Borrower Representative without the written consent of Borrower Representative;

<u>provided</u>, <u>however</u>, that any waiver, amendment or modification that materially affects the Paying Agent or Calculation Agent, as applicable, shall require the prior consent of such party; written notice of any other amendment or waiver hereunder, together with a copy thereof, shall be delivered to the Calculation Agent or the Paying Agent via email at the addresses set forth next to its signature block promptly following the effective date of such amendment or waiver, and neither the Calculation Agent nor Paying Agent shall have any liability for any amendment or waiver of which it did not receive such notice. For the avoidance of doubt, any amendments or modifications related to <u>Schedule 3</u> to the Side Letter shall not require the consent of the Paying Agent or Calculation Agent, unless such amendment or modification creates a material additional reporting burden on such party (as reasonably determined by such party).

Section 33. <u>Administrative Agent Provisions.Appointment and Authority</u>. Each Lender hereby irrevocably appoints JPMorgan Chase Bank, N.A. to act on its behalf as Administrative Agent hereunder and under the other Facility Documents and authorizes Administrative Agent to take such actions on its behalf and to exercise all such powers as are expressly delegated to Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this <u>Section 33</u> are solely for the benefit of Administrative Agent and Lenders, and no Borrower shall any have rights as a third party beneficiary of any of such provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Rights as a Lender</u>. Administrative Agent shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not Administrative Agent. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with a Borrower or another Affiliate thereof as if such Person were not Administrative Agent hereunder and without any duty to account therefor to Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Exculpatory Provisions</u>. Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Facility Documents. Without limiting the generality of the foregoing, Administrative Agent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default or Default has occurred and is continuing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Facility Documents that Administrative Agent is required to exercise as directed in writing by Lenders, provided that Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose Administrative Agent to liability or that is contrary to any Facility Document or any Requirement of Law; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)shall not, except as expressly set forth herein and in the other Facility Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to a Borrower or any of its Affiliates that is communicated to or obtained by Administrative Agent.

Administrative Agent shall not be liable for any action taken or not taken by it (i) in accordance with the rights and powers that are expressly delegated to Administrative Agent by the terms of this Agreement or any other Facility Document, (ii) with the consent or at the request of Lenders, or (iii) in the absence of its own gross negligence or willful misconduct. Administrative Agent shall be deemed not to have knowledge of any Event of Default or Default unless and until notice describing such Event of Default or Default is given to Administrative Agent by a Borrower or an Affiliate thereof or a Lender.

Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Facility Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Event of Default or Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Facility Document or any other agreement, instrument or document, (v) the creation, perfection or priority of Liens on the Collateral or the existence of the Collateral, or (vi) the satisfaction of any condition set forth in <u>Section 2</u> or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Reliance by Administrative Agent</u>. Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of an Advance that by its terms must be fulfilled to the satisfaction of a Lender, Administrative Agent may presume that such condition is satisfactory to such Lender unless Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Advance. Administrative Agent may consult with legal counsel (who may be counsel for Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Delegation of Duties</u>. Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Facility Document by or through any one or more sub-agents appointed by Administrative Agent. Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through its respective Affiliates. The exculpatory provisions of this <u>Section 34</u> shall apply to any such sub-agent and to the Affiliates of Administrative Agent and any such sub-agent, and shall

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apply to their respective activities in connection with the syndication of the credit facility provided for herein as well as activities as Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Resignation of Administrative Agent</u>. Administrative Agent may at any time give notice of its resignation to Lenders, Borrower Representative, Calculation Agent and Borrowers. Upon receipt of any such notice of resignation, Lenders shall have the right, in consultation with Borrowers, to appoint a successor. If no such successor shall have been so appointed by Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of Lenders appoint a successor Administrative Agent meeting the qualifications set forth above; <u>provided</u> that if Administrative Agent shall notify Borrowers, Borrower Representative, Calculation Agent and Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Facility Documents (except that in the case of any Collateral held by Administrative Agent on behalf of Lenders under any of the Facility Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through Administrative Agent shall instead be made by or to each Lender directly, until such time as Lenders appoint a successor Administrative Agent as provided for in this <u>Section 33(f)</u>. Upon the acceptance of a successor's appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Facility Documents (if not already discharged therefrom as provided above in this <u>Section 33(f)</u>). The fees payable by Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between Borrowers and such successor. After the retiring Administrative Agent's resignation hereunder and under the other Facility Documents, the provisions of this <u>Section 34</u> and <u>Section 15</u> shall continue in effect for the benefit of such retiring Administrative Agent, its sub agents and their respective Affiliates in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)<u>Non-Reliance on Administrative Agent and Other Lenders</u>. Each Lender acknowledges that it has, independently and without reliance upon Administrative Agent or any other Lender or any of their Affiliates and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon Administrative Agent or any other Lender or any of their Affiliates and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Facility Document or any related agreement or any document furnished hereunder or thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)<u>Administrative Agent May File Proofs of Claim</u>. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Borrower Party or Guarantor, Administrative Agent (irrespective of whether the principal of any Advance shall then be due and

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payable as herein expressed or by declaration or otherwise and irrespective of whether Administrative Agent shall have made any demand on such Borrower Party or Guarantor) shall be entitled and empowered, by intervention in such proceeding or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Advances and all other Secured Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of Lenders and Administrative Agent (including any claim for reimbursement under <u>Section 15</u>) allowed in such judicial proceeding; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to Lenders, to pay to Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due Administrative Agent under the Facility Documents.

Nothing contained herein shall be deemed to authorize Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Secured Obligations or the rights of any Lender or to authorize Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Reimbursement by Lenders</u>. To the extent that any Borrower for any reason fails to indefeasibly pay any amount required under <u>Section 15</u> to be paid by it to Administrative Agent (or any sub-agent thereof), or any Affiliate of any of the foregoing, each Lender severally agrees to pay to Administrative Agent (or any such sub-agent) or such Affiliate, as the case may be, such Lender's proportionate share (determined with respect to the outstanding principal balance of the Advances made by such Lender as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; <u>provided</u>, that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against Administrative Agent (or any such sub-agent) or against any Affiliate of any of the foregoing acting for Administrative Agent (or any such sub-agent) in connection with such capacity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)<u>Exclusive Right to Enforce Rights and Remedies</u>. Notwithstanding anything to the contrary contained herein or in any other Facility Document, the authority to enforce rights and remedies hereunder and under the other Facility Documents against Borrower Parties, Guarantor or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, Administrative Agent in accordance with the Facility Documents for the benefit of all Lenders; <u>provided</u> that the foregoing shall not prohibit (i) Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Facility Documents, (ii) any Lender from exercising setoff rights in

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accordance with <u>Section 21</u> or (iii) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Borrower Party or Guarantor under any bankruptcy or other debtor relief law; and provided further that if at any time there is no Person acting as Administrative Agent hereunder and under the other Facility Documents, then (A) Lenders shall have the rights otherwise ascribed to Administrative Agent pursuant to <u>Section 14</u> and (B) any Lender may, with the consent of the other Lenders, enforce any rights and remedies available to it and as authorized by each other Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)<u>Indemnification</u>. Lenders hereby agree to indemnify Administrative Agent, its officers, directors, employees, attorneys, agents, advisors and the parent company or holding company that controls such Person (the "<u>Indemnified Agent Parties</u>") from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, reasonable costs, expenses or disbursements or any kind or nature whatsoever which may be imposed on, incurred by, or asserted against such Indemnified Agent Party in any way relating to or arising out of this Agreement or any other Facility Documents; <u>provided</u> that Lenders shall not be required to indemnify any Indemnified Agent Party to the extent of any amounts resulting from the fraud, gross negligence or willful misconduct of such Indemnified Agent Party. Without limiting the generality of the foregoing provisions of this <u>Section 33(k)</u>, Lenders to reimburse Administrative Agent promptly upon demand for any reasonable out-of-pocket expenses (including counsel fees) incurred by Administrative Agent in connection with the consummation, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advance in respect of rights or responsibilities under this Agreement or any other Facility Document.

Section 34. <u>Joint and Several Liability</u>. Each Borrower shall be jointly and severally liable to Lenders and Administrative Agent for the full, complete and punctual performance and satisfaction of all obligations of any Borrower under this Agreement. Accordingly, each Borrower waives any and all notice of creation, renewal, extension or accrual of any of the Secured Obligations and notice of or proof of reliance by Lenders and Administrative Agent upon such Borrower's joint and several liability. Each Borrower waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon such Borrower with respect to the Secured Obligations. When pursuing its rights and remedies hereunder against any Borrower, Lenders and Administrative Agent may, but shall be under no obligation, to pursue such rights and remedies hereunder against any Borrower or any other Person or against any collateral security for the Secured Obligations or any right of offset with respect thereto, and any failure by Lenders or Administrative Agent to pursue such other rights or remedies or to collect any payments from such Borrower or any such other Person to realize upon any such collateral security or to exercise any such right of offset, or any release of such Borrower or any such other Person or any such collateral security, or right of offset, shall not relieve such Borrower of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Lenders and Administrative Agent against such Borrower.<u>General Interpretive Principles</u>. For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)references herein to "Articles", "Sections", "Subsections", "Paragraphs", and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to clauses, paragraphs and other subdivisions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)the words "herein", "hereof", "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular provision;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)the term "include" or "including" shall mean without limitation by reason of enumeration;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)all times specified herein or in any other Facility Document (unless expressly specified otherwise) are local times in New York, New York unless otherwise stated; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)all references herein or in any Facility Document to "good faith" shall mean good faith as defined in Section 1-201(19) of the UCC as in effect in the State of New York.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date set forth above.

<u>ADMINISTRATIVE AGENT</u>:

**JPMORGAN CHASE BANK, N.A.**

By: <u>/s/ Mackenzie Smith</u> Name: Mackenzie Smith

Title: Vice President

<u>Addresses for Notices</u>:

JPMorgan Chase Bank, N.A.

383 Madison Ave, 8th Floor

New York, NY 10179

Email: ABS_Offerpad_Facility@jpmorgan.com

[Signature Page to Loan and Security Agreement]

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<u>LENDER</u>:

**JPMORGAN CHASE BANK, N.A.**

By: <u>/s/ Mackenzie Smith</u> Name: Mackenzie Smith

Title: Vice President

<u>Addresses for Notices</u>:

JPMorgan Chase Bank, N.A.

383 Madison Ave, 8th Floor New York, NY 10179

Email: ABS_Offerpad_Facility@jpmorgan.com

[Signature Page to Loan and Security Agreement]

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<u>LENDER</u>:

**AG Mortgage Value Partners Onshore Master Fund, L.P.**

By: Angelo, Gordon & Co., L.P., as manager or advisor

By: <u>/s/ Thomas Durkin</u> <br>Name: Thomas Durkin<br>Title: Authorized Person

**AG Asset Based Credit Master Fund (B), L.P.**

By: Angelo, Gordon & Co., L.P., as manager or advisor

By: <u>/s/ Thomas Durkin</u> <br>Name: Thomas Durkin<br>Title: Authorized Person

**AG TCDRS, L.P.**

By: Angelo, Gordon & Co., L.P., as manager or advisor

By: <u>/s/ Thomas Durkin</u> <br>Name: Thomas Durkin<br>Title: Authorized Person

**AG Centre Street Partnership, L.P.**

By: Angelo, Gordon & Co., L.P., as manager or advisor

By: <u>/s/ Thomas Durkin</u> <br>Name: Thomas Durkin<br>Title: Authorized Person

[Signature Page to Loan and Security Agreement]

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<u>Addresses for Notices</u>:

AG Mortgage Value Partners Onshore Master Fund,

L.P.

c/o Angelo, Gordon & Co., L.P.

245 Park Avenue, 26th floor

New York, NY 10167

Attention: RMBS

Email: rmbsnotices@angelogordon.com

AG TCDRS, L.P.

c/o Angelo, Gordon & Co.,

L.P.

245 Park Avenue, 26th floor

New York, NY 10167

Attention: RMBS

Email: rmbsnotices@angelogordon.com

AG Centre Street Partnership, L.P.

c/o Angelo, Gordon & Co., L.P.

245 Park Avenue, 26th floor

New York, NY 10167

Attention: RMBS

Email: rmbsnotices@angelogordon.com

AG Asset Based Credit Master Fund (B), L.P.

c/o Angelo, Gordon & Co., L.P.

245 Park Avenue, 26th floor

New York, NY 10167

Attention: RMBS

Email: rmbsnotices@angelogordon.com

[Signature Page to Loan and Security Agreement]

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<u>BORROWER</u>:

**OFFERPAD SPE BORROWER A, LLC,**

as a Borrower

By: <u>/s/ Michael S. Burnett</u> <br>Name: Michael S. Burnett<br>Title: Chief Financial Officer

By: <u>/s/ Benjamin Aronovitch</u> 

Name: Benjamin Aronovitch

Title: Chief Legal Officer

<u>Address for Notices</u>:

Offerpad SPE Borrower A, LLC 2150 E. Germann Rd., Suite 1

Chandler, Arizona 85286 Attention: Benjamin Aronovitch

Email: benjamin.aronovitch@offerpad.com

[Signature Page to Loan and Security Agreement]

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<u>BORROWER REPRESENTATIVE</u>:

**OFFERPAD SPE BORROWER A, LLC**

By: <u>/s/ Michael S. Burnett</u> <br>Name: Michael S. Burnett<br>Title: Chief Financial Officer

By: <u>/s/ Benjamin Aronovitch</u> 

Name: Benjamin Aronovitch

Title: Chief Legal Officer

<u>Address for Notices</u>:

Offerpad SPE Borrower A, LLC 2150 E. Germann Rd., Suite 1

Chandler, Arizona 85286 Attention: Benjamin Aronovitch

Email: benjamin.aronovitch@offerpad.com

[Signature Page to Loan and Security Agreement]

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<u>CALCULATION AGENT</u>:

**WELLS FARGO BANK, NATIONAL ASSOCIATION**

By: **COMPUTERSHARE TRUST COMPANY, N.A.,** as attorney-in-fact

By: <u>/s/ Karla Sjostrom</u> <br>Name: Karla Sjostrom<br>Title: Vice President

<u>Address for Notices</u>:

Wells Fargo Bank, National Association

9062 Old Annapolis Road

Columbia, Maryland 21045

Attention: Client Manager:

JPMOPENDOORIO211

Email: CTSSFR@wellsfargo.com

[Signature Page to Loan and Security Agreement]

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<u>PAYING AGENT</u>:

**WELLS FARGO BANK, NATIONAL ASSOCIATION**

By: **COMPUTERSHARE TRUST COMPANY, N.A.,** as attorney-in-fact

By: <u>/s/ Karla Sjostrom</u> <br>Name: Karla Sjostrom<br>Title: Vice President

<u>Address for Notices</u>:

Wells Fargo Bank, N.A. 9062 Old Annapolis Road Columbia, Maryland 21045

Attention: Client Manager: JPMOP2021 Email: CTSSFR@wellsfargo.com

[Signature Page to Loan and Security Agreement]

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## Ex-10

**EXECUTION VERSION**

**AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT AND REAFFIRMATION OF GUARANTEES**

Amendment No. 4 to Loan and Security Agreement, Waiver, and Reaffirmation of Guarantees, dated as of February 24, 2023 (this "<u>Amendment</u>"), among OFFERPAD SPE BORROWER A, LLC, as borrower ("<u>Borrower</u>"), OFFERPAD SPE BORROWER A, LLC, as borrower representative ("<u>Borrower Representative</u>"), OFFERPAD SPE BORROWER A HOLDINGS, LLC, as pledgor and guarantor ("<u>Pledgor</u>"), OFFERPAD HOLDINGS LLC, as limited guarantor ("<u>Guarantor</u>"), JPMORGAN CHASE BANK, N.A., as a lender, AG Mortgage Value Partners Onshore Master Fund, L.P., as a lender, AG Asset Based Credit Master Fund (B), L.P., as a lender, AG TCDRS, L.P., as a lender, AG Centre Street Partnership, L.P., as a lender and JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent acting for and on behalf of Lenders ("<u>Administrative Agent</u>").

<u>RECITALS</u>

Borrower, Borrower Representative, Lenders and Administrative Agent are parties to that certain Loan and Security Agreement, dated as of September 10, 2021 (as amended by Amendment No. 1 to Loan and Security Agreement, dated as of December 16, 2021, as further amended by Amendment No. 2 to Loan and Security Agreement, dated as of September 21, 2022, as further amended by Amendment No. 3 to Loan and Security Agreement, dated as of December 21, 2022, the "<u>Existing Loan Agreement</u>", as further amended by this Amendment, the "<u>Loan Agreement</u>"). Pledgor is a party to that certain Guaranty Agreement, dated as of September 10, 2021, made in favor of Administrative Agent (the "<u>Guaranty Agreement</u>"). Guarantor is a party to that certain Limited Guaranty, dated as of September 10, 2021, made in favor of Administrative Agent (the "<u>Limited Guaranty</u>"). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Loan Agreement.

Borrower, Borrower Representative, Pledgor, Guarantor, Lenders and Administrative Agent have agreed, subject to the terms and conditions of this Amendment, that the Existing Loan Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Loan Agreement.

Accordingly, Borrower, Borrower Representative, Pledgor, Guarantor, Lenders and Administrative Agent hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Loan Agreement is hereby amended as follows:

SECTION 1.<u>Amendments to Existing Loan Agreement</u>. Subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Existing Loan Agreement is hereby amended by deleting Exhibit A in its entirety and replacing it with <u>Schedule I</u> attached hereto.

SECTION 2.<u>Conditions Precedent</u>. This Amendment shall become effective as of the date hereof, upon the execution and delivery to Administrative Agent and Lenders of (i) this Amendment by Borrower, Borrower Representative, Pledgor, Guarantor, Administrative Agent

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and Lenders and (ii) that certain Second Amended and Restated Side Letter dated as of the date hereof made among Administrative Agent, Lenders, Borrower and Borrower Representative.

SECTION 3.<u>Limited Effect</u>. Except as expressly amended and modified by this Amendment, the Existing Loan Agreement, the Guaranty Agreement and the Limited Guaranty shall continue to be, and shall remain, in full force and effect in accordance with their terms. The parties hereto have entered into this Amendment solely to amend the terms of the Existing Loan Agreement and do not intend this Amendment or the transactions contemplated hereby to be, and this Amendment and the transactions contemplated hereby shall not be construed to be, a novation of any of the obligations owing by Borrower, Pledgor, Guarantor or any other party under or in connection with the Existing Loan Agreement, the Guaranty Agreement, the Limited Guaranty or any of the other Facility Documents. It is the intention and agreement of each of the parties hereto that (i) the perfection and priority of all security interests securing the payment of the obligations of the parties under the Existing Loan Agreement, the Guaranty Agreement and the Limited Guaranty are preserved, (ii) the liens and security interests granted under the Existing Loan Agreement continue in full force and effect, and (iii) any reference to the Existing Loan Agreement in any Facility Document shall be deemed to reference the Existing Loan Agreement as amended by this Amendment. The execution of this Amendment by Administrative Agent does not operate as a waiver of any of its rights, powers, or privileges under the Loan Agreement, the Guaranty Agreement, the Limited Guaranty or under any of the other Facility Documents (including, without limitation, any other occurrences under the Loan Agreement that would commence a Default).

SECTION 4.<u>Ratification and Reaffirmation of Guarantees</u>. Pledgor and Guarantor each hereby ratifies and reaffirms the terms and conditions of the Guaranty Agreement and the Limited Guaranty, as applicable. Pledgor's and Guarantor's obligations, liabilities, covenants, and guaranties pursuant to the Guaranty Agreement and the Limited Guaranty, whether for payment, performance, or otherwise, are now and shall remain valid and binding obligations of Pledgor and Guarantor, as applicable, and both before and after giving effect to the Amendment, will remain, now and hereafter, in full force and effect, unmodified and enforceable against Pledgor and Guarantor in accordance with their terms. Pledgor and Guarantor each acknowledges and agrees that this ratification and reaffirmation is given to induce Administrative Agent and Lenders to provide their consent to this Amendment. Absent execution and delivery of this Amendment by Pledgor and Guarantor, Administrative Agent would not have provided such consent to this Amendment.

SECTION 5.<u>Severability</u>. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

SECTION 6.<u>Counterparts</u>. This Amendment may be executed by each of the parties hereto by means of (i) an original manual signature; (ii) a faxed, scanned, or photocopied manual signature, or (iii) any other electronic signature (including, but not limited to, DocuSign) permitted by the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, and/or any other relevant electronic signatures law, including any relevant provisions of the Uniform Commercial Code (collectively, "<u>Signature Law</u>"), in each case to the extent applicable. Each faxed, scanned, or photocopied manual signature, or electronic signature, shall for all purposes have the same validity, legal effect,

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and admissibility in evidence as an original manual signature. Each party hereto shall be entitled to conclusively rely upon, and shall have no liability with respect to, any faxed, scanned, or photocopied manual signature, or other electronic signature, of any other party and shall have no duty to investigate, confirm of otherwise verify the validity or authenticity thereof. This Amendment may be executed in one or more counterparts and by the different parties hereto on separate counterparts, including without limitation counterparts transmitted by facsimile or other electronic transmission, each of which, when so executed, shall be deemed to be an original and such counterparts, together, shall constitute one and the same agreement. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile.

SECTION 7.**<u>GOVERNING LAW</u>. THIS AMENDMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH SHALL GOVERN.**

SECTION 8.<u>Headings.</u> The headings of this Amendment are provided solely for convenience of reference and shall not modify, define, expand or limit any of the terms or provisions of this Amendment.

SECTION 9.<u>Consent</u>. By countersigning this Amendment, Lenders, constituting all of the Lenders under the Loan Agreement, hereby consent to this Amendment. In addition, by countersigning this Amendment, each of Paying Agent and Calculation Agent hereby consents to this Amendment.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed as of the date first above written.

<u>ADMINISTRATIVE AGENT</u>:

**JPMORGAN CHASE BANK, N.A.**

By: <u>/s/ Mackenzie Smith</u> 

Name: Mackenzie Smith

Title: Vice President

Signature Page to Amendment No. 4 to Loan and Security Agreement

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<u>LENDER</u>:

**JPMORGAN CHASE BANK, N.A.**

By: <u>/s/ Mackenzie Smith</u> 

Name: Mackenzie Smith

Title: Vice President

Signature Page to Amendment No. 4 to Loan and Security Agreement

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<u>LENDER</u>:

**AG Mortgage Value Partners Onshore Master Fund, L.P.**

By: Angelo, Gordon & Co., L.P., as manager or advisor

By: <u>/s/ Thomas Durkin</u> 

Name: Thomas Durkin

Title:Authorized Person

**AG Asset Based Credit Master Fund (B), L.P.**

By: Angelo, Gordon & Co., L.P., as manager or advisor

By: <u>/s/ Thomas Durkin</u> 

Name: Thomas Durkin

Title:Authorized Person

**AG TCDRS, L.P.**

By: Angelo, Gordon & Co., L.P., as manager or advisor

By: <u>/s/ Thomas Durkin</u> 

Name: Thomas Durkin

Title:Authorized Person

**AG Centre Street Partnership, L.P.**

By: Angelo, Gordon & Co., L.P., as manager or advisor

By: <u>/s/ Thomas Durkin</u> 

Name: Thomas Durkin

Title:Authorized Person

Signature Page to Amendment No. 4 to Loan and Security Agreement

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<u>BORROWER</u>:

**OFFERPAD SPE BORROWER A, LLC,**

as a Borrower

By: <u>/s/ Michael S. Burnett</u> 

Name: Michael S. Burnett

Title:Chief Financial Officer

By: <u>/s/ Benjamin Aronovitch</u> 

Name: Benjamin Aronovitch

Title: Chief Legal Officer

Signature Page to Amendment No. 4 to Loan and Security Agreement

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<u>BORROWER REPRESENTATIVE</u>:

**OFFERPAD SPE BORROWER A, LLC**

By: <u>/s/ Michael S. Burnett</u> 

Name: Michael S. Burnett

Title:Chief Financial Officer

By: <u>/s/ Benjamin Aronovitch</u> 

Name: Benjamin Aronovitch

Title: Chief Legal Officer

Signature Page to Amendment No. 4 to Loan and Security Agreement

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<u>PLEDGOR AND GUARANTOR</u>:

**OFFERPAD SPE BORROWER A HOLDINGS, LLC**, as Pledgor

By: <u>/s/ Michael S. Burnett</u> 

Name: Michael S. Burnett

Title:Chief Financial Officer

By: <u>/s/ Benjamin Aronovitch</u> 

Name: Benjamin Aronovitch

Title: Chief Legal Officer

Signature Page to Amendment No. 4 to Loan and Security Agreement

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<u>LIMITED GUARANTOR</u>:

**OFFERPAD HOLDINGS LLC**, as Guarantor

By: <u>/s/ Michael S. Burnett</u> 

Name: Michael S. Burnett

Title:Chief Financial Officer

By: <u>/s/ Benjamin Aronovitch</u> 

Name: Benjamin Aronovitch

Title: Chief Legal Officer

Signature Page to Amendment No. 4 to Loan and Security Agreement

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## Ex-21

**Exhibit 21.1**

**Subsidiaries of Offerpad Solutions Inc.**

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| | |
|:---|:---|
| **Name** | **Jurisdiction of Incorporation** |
| Offerpad Holdings LLC | Delaware |
| OfferPad, LLC | Arizona |
| OfferPad (SPVBorrower), LLC | Delaware |
| OfferPad (SPVBorrower1), LLC | Delaware |
| OP SPE PHX1, LLC | Delaware |
| OP SPE TPA1, LLC | Delaware |
| OP SPE BORROWER PARENT, LLC | Delaware |
| OP SPE HOLDCO, LLC | Delaware |
| OfferPad Mortgage, LLC | Arizona |
| OfferPad Brokerage, LLC | Arizona |
| OfferPad Brokerage "FL," LLC | Florida |
| OP Contracting AZ, LLC | Arizona |
| OP Contracting GA, LLC | Georgia |
| OP Contracting TX, LLC | Texas |
| OfferPad Brokerage CA, Inc. | California |
| Offerpad SPV Borrower G, LLC | Delaware |
| Offerpad SPE Borrower A Holdings, LLC | Delaware |
| Offerpad SPE Borrower A, LLC | Delaware |
| OP Gold Holdings, LLC | Delaware |
| OP Gold, LLC | Delaware |
| Offerpad Point LLC | Delaware |

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## Ex-23

**Exhibit 23.1**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the incorporation by reference in Registration Statement No. 333-259790 on Form S-3 and Registration Statement No. 333-260879 on Form S-8 of our report dated February 28, 2023, relating to the financial statements of Offerpad Solutions Inc. and the effectiveness of Offerpad Solutions Inc.'s internal control over financial reporting appearing in this Annual Report on Form 10-K for the year ended December 31, 2022.

/s/ DELOITTE & TOUCHE LLP

Tempe, Arizona<br>February 28, 2023

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## Ex-31

**Exhibit 31.1**

**CERTIFICATION**

I, Brian Bair, certify that:

1. I have reviewed this Annual Report on Form 10-K of Offerpad Solutions Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: February 28, 2023 | By: | /s/ Brian Bair |
|  |  | **Brian Bair** |
|  |  | **Chief Executive Officer and** <br>**Chairman of the Board**<br>**(Principal Executive Officer)** |

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## Ex-31

**Exhibit 31.2**

**CERTIFICATION**

I, Michael Burnett, certify that:

1. I have reviewed this Annual Report on Form 10-K of Offerpad Solutions Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: February 28, 2023 | By: | /s/ Michael Burnett |
|  |  | **Michael Burnett** |
|  |  | **Chief Financial Officer**<br>**(Principal Financial Officer)** |

---

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## Ex-32

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with this Annual Report on Form 10-K of Offerpad Solutions Inc. (the "Company") for the period ended December 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: February 28, 2023 | By: | /s/ Brian Bair |
|  |  | **Brian Bair** |
|  |  | **Chief Executive Officer and** <br>**Chairman of the Board**<br>**(Principal Executive Officer)** |

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## Ex-32

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with this Annual Report on Form 10-K of Offerpad Solutions Inc. (the "Company") for the period ended December 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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| | | |
|:---|:---|:---|
| Date: February 28, 2023 | By: | /s/ Michael Burnett |
|  |  | **Michael Burnett** |
|  |  | **Chief Financial Officer**<br>**(Principal Financial Officer)** |

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