10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the Fiscal Year Ended December 31, 2021

☐ 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: 001-40496

Terra Property Trust, Inc.

(Exact name of registrant as specified in its charter)

Maryland	81-0963486
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

550 Fifth Avenue, 6th Floor

New York, New York 10036

(Address of principal executive offices)

(212) 753-5100

(Registrant’s telephone number, including area code)

Securities registered pursuant to section 12(b) of the Securities Exchange Act of 1934:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
6.00% Notes due 2026	TPTA	New York Stock Exchange

Securities registered pursuant to section 12(g) of the Securities Exchange Act of 1934:

Common Stock $0.01 par value per share

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

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

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 þ No o

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	þ	Smaller reporting company	☑
		Emerging growth company	☑

    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 March 11, 2022, the registrant had 19,487,460 shares of common stock, $0.01 par value, outstanding. No market value has been computed based upon the fact that no active trading market had been established as of the date of this document.

Documents Incorporated by Reference

None.

TABLE OF CONTENTS

		Page
PART I
	Item 1. Business	1
	Item 1A. Risk Factors	8
	Item 1B. Unresolved Staff Comments	33
	Item 2. Properties	33
	Item 3. Legal Proceedings	33
	Item 4. Mine Safety Disclosures	33
PART II
	Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	33
	Item 6. [Reserved]	33
	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	34
	Item 7A. Quantitative and Qualitative Disclosures about Market Risk	48
	Item 8. Financial Statements and Supplementary Data	49
	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	49
	Item 9A. Controls and Procedures	49
	Item 9B. Other Information	50
	Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	51
PART III
	Item 10. Directors, Executive Officers and Corporate Governance	51
	Item 11. Executive Compensation	53
	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	54
	Item 13. Certain Relationships and Related Transactions, and Director Independence	55
	Item 14. Principal Accountant Fees and Services	58
PART IV
	Item 15. Exhibits and Financial Statement Schedules	59
	Item 16. Form 10-K Summary	61
Signatures		62

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CERTAIN DEFINITIONS

Except as otherwise specified herein, the terms: “we,” “us,” “our,” “our company” and the “company” refer to Terra Property Trust, Inc., a Maryland corporation, together with its subsidiaries. Additionally, the following defined terms are used in this Annual Report on Form 10-K.

•“Terra Capital Advisors” refers to Terra Capital Advisors, LLC, a subsidiary of Terra Capital Partners;

•“Terra Capital Advisors 2” refers to Terra Capital Advisors 2, LLC, an subsidiary of Terra Capital Advisors;

•“Terra Capital Partners” refers to Terra Capital Partners, LLC, our sponsor;

•“Terra Fund 1” refers to Terra Secured Income Fund, LLC; “Terra Fund 2” refers to Terra Secured Income Fund 2, LLC; “Terra Fund 3” refers to Terra Secured Income Fund 3, LLC; “Terra JV” refers to Terra JV, LLC (formerly known as Terra Secured Income Fund 4, LLC or Terra Fund 4); “Terra Fund 5” refers to Terra Secured Income Fund 5, LLC; “Fund 5 International” refers to Terra Secured Income Fund 5 International; “TIFI” refers to Terra Income Fund International; “Terra Fund 6” refers to Terra Income Fund 6, Inc.; “Terra Offshore REIT” refers to Terra Offshore Funds REIT, LLC; “Terra Fund 7” refers to Terra Secured Income Fund 7, LLC; “Terra Property Trust 2” refers to Terra Property Trust 2, Inc., formerly a subsidiary of Terra Fund 7; “RESOF” refers to Mavik Real Estate Special Opportunities Fund, L.P. (formerly known as Terra Real Estate Credit Opportunities Fund, L.P.); “RESOF REIT” refers to Mavik Real Estate Special Opportunities Fund REIT, LLC (formerly known as Terra Real Estate Credit Opportunities Fund REIT, LLC), a subsidiary of RESOF;

•“Terra Fund Advisors” refers to Terra Fund Advisors, LLC, an affiliate of Terra Capital Partners, and the manager of Terra Fund 5;

•“Terra Funds” refer to Terra Fund 1, Terra Fund 2, Terra Fund 3, Terra Fund 4 and Terra Fund 5, collectively;

•“Terra Income Advisors” refers to Terra Income Advisors, LLC, an affiliate of Terra Capital Partners;

•“Terra Income Advisors 2” refers to Terra Income Advisors 2, LLC, an affiliate of Terra Capital Partners; and

•“Terra REIT Advisors” or our “Manager” refers to Terra REIT Advisors, LLC, a subsidiary of Terra Capital Partners and our external manager.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

We make forward-looking statements in this Annual Report on Form 10-K within the meaning of 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”). For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. The forward-looking statements contained in this Annual Report on Form 10-K may include, but are not limited to, statements as to:

•our expected financial performance, operating results and our ability to make distributions to our stockholders in the future;

•the potential negative impacts of a novel coronavirus (“COVID-19”) on the global economy and the impacts of COVID-19 on our financial condition, results of operations, liquidity and capital resources and business operations;

•actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact;

•the availability of attractive risk-adjusted investment opportunities in our target asset class and other real estate-related investments that satisfy our objectives and strategies;

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•the origination or acquisition of our targeted assets, including the timing of originations or acquisitions;

•volatility in our industry, interest rates and spreads, the debt or equity markets, the general economy or the real estate market specifically, whether the results of market events or otherwise;

•changes in our investment objectives and business strategy;

•the availability of financing on acceptable terms or at all;

•the performance and financial condition of our borrowers;

•changes in interest rates and the market value of our assets;

•borrower defaults or decreased recovery rates from our borrowers;

•changes in prepayment rates on our loans;

•our use of financial leverage;

•actual and potential conflicts of interest with any of the following affiliated entities: Terra Income Advisors; our Manager; Terra Capital Partners; Terra Fund 6; Terra Fund 7, Terra 5 International, TIFI, Terra Offshore REIT, RESOF; or any of their affiliates;

•our dependence on our Manager or its affiliates and the availability of its senior management team and other personnel;

•liquidity transactions that may be available to us in the future, including a liquidation of our assets, a sale of our company or an initial public offering and listing of our shares of common stock on a national securities exchange, and the timing of any such transactions;

•actions and initiatives of the U.S., federal, state and local government and changes to the U.S. federal, state and local government policies and the execution and impact of these actions, initiatives and policies;

•limitations imposed on our business and our ability to satisfy complex rules in order for us to maintain our exclusion or exemption from registration under the Investment Company Act of 1940, as amended (the “1940 Act”), and to maintain our qualification as a real estate investment trust (“REIT”) for U.S. federal income tax purposes; and

•the degree and nature of our competition.

In addition, words such as “anticipate,” “believe,” “expect” and “intend” indicate a forward-looking statement, although not all forward-looking statements include these words. The forward-looking statements contained in this Annual Report on Form 10-K involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Part I — Item 1A. Risk Factors” in this Annual Report on Form 10-K. Other factors that could cause actual results to differ materially include:

•changes in the economy;

•risks associated with possible disruption in our operations or the economy generally due to terrorism or natural disasters; and

•future changes in laws or regulations and conditions in our operating areas.

We have based the forward-looking statements included in this Annual Report on Form 10-K on information available to us on the date of this Annual Report on Form 10-K. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. Stockholders are advised to consult any additional disclosures that we may make directly to stockholders or through reports that

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we may file in the future with the Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

RISK FACTOR SUMMARY

We are subject to numerous risks and uncertainties (many of which may be amplified by the COVID-19 pandemic), that could cause our actual results and future events to differ materially from those set forth or contemplated in our forward-looking statements, including those summarized below. The following list of risks and uncertainties is only a summary of some of the most important factors and is not intended to be exhaustive. This risk factor summary should be read together with the more detailed discussion of risks and uncertainties set forth under “Risk Factors.”

Risks Related to Owning Our Common Stock

•There is no public market for our common stock and a market may never develop, which could cause our common stock to trade at a discount and make it difficult for holders of our common stock to sell their shares.

•Common stock and preferred stock eligible for future sale may have adverse effects on our share price.

•Our principal stockholders, which are currently controlled by affiliates of our Manager, own a significant amount of our outstanding shares of common stock, which is sufficient to approve or veto most corporate actions requiring a vote of our stockholders.

Risks Related to Our Business

•Changes in national, regional or local economic, demographic or real estate market conditions may adversely affect our results of operations, our financial position, the value of our assets and our cash flows.

•The lack of liquidity of our assets may adversely affect our business, including our ability to value and sell our assets.

•Our investments are selected by our Manager and our investors will not have input into investment decisions.

•If our Manager underestimates the borrower’s credit analysis or originates loans by using an exception to its loan underwriting guidelines, we may experience losses.

•Changes in interest rates could adversely affect the demand for our target loans, the value of our loans, commercial mortgage-backed securities (“CMBS”) and other real-estate debt or equity assets and the availability and yield on our targeted assets.

•New entrants in the market for commercial loan originations and acquisitions could adversely impact our ability to originate and acquire real estate-related loans at attractive risk-adjusted returns.

•Our loan portfolio may at times be concentrated in certain property types or secured by properties concentrated in a limited number of geographic areas, which increases our exposure to economic downturn with respect to those property types or geographic locations.

•The mezzanine loans, preferred equity and other subordinated loans in which we invest involve greater risks of loss than senior loans secured by income-producing commercial properties.

Risks Related to Regulation

•Maintenance of our 1940 Act exclusion imposes limits on our operations.

Risks Related to Our Management and Our Relationship With Our Manager

•We rely entirely on the management team and employees of our Manager for our day-to-day operations.

•We face certain conflicts of interest with respect to our operations and our relationship with our Manager and its affiliates.

•The compensation that our Manager receives was not determined on an arm’s-length basis and therefore may not be on the same terms as we could achieve from a third-party.

•Our Manager and its affiliates have limited prior experience operating a REIT and therefore may have difficulty in successfully and profitably operating our business or complying with regulatory requirements, including REIT provisions of the Internal Revenue Code of 1986, as amended (the “Code”), which may hinder their ability to achieve our objectives or result in loss of our qualification as a REIT.

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Risks Related to Financing and Hedging

•Our inability to access funding could have a material adverse effect on our results of operations, financial condition and business. We may rely on short-term financing and thus are especially exposed to changes in the availability of financing.

•We may enter into hedging transactions that could expose us to contingent liabilities in the future and adversely impact our financial condition.

Risks Related to Our Organization and Structure

•Rapid changes in the values of our assets may make it more difficult for us to maintain our qualification as a REIT or our exclusion from the 1940 Act.

Risks Related to Our Qualification as a REIT

•Our failure to qualify or remain qualified as a REIT would subject us to U.S. federal income tax and applicable state and local taxes, which would reduce the amount of cash available for principal and interest payments on the notes.

•REIT distribution requirements could adversely affect our ability to execute our business plan and may require us to incur debt or sell assets to make such distributions.

•Even if we qualify as a REIT, we may face other tax liabilities that reduce our cash flow.

•Complying with the REIT requirements may force us to liquidate or forego otherwise attractive investments.

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PART I

Item 1. Business.

Overview

    We are a real estate credit focused company that originates, structures, funds and manages commercial real estate credit investments, including mezzanine loans, first mortgage loans, subordinated mortgage loans and preferred equity investments throughout the United States, which we collectively refer to as our targeted assets. Our loans finance the acquisition, construction, development or redevelopment of quality commercial real estate in the United States. We focus on the origination of middle market loans in the approximately $10 million to $50 million range, to finance properties primarily in primary and secondary markets. We believe loans in this size range are subject to less competition, offer higher risk adjusted returns than larger loans with similar risk metrics and facilitate portfolio diversification. Our investment objective is to provide attractive risk-adjusted returns to our stockholders, primarily through regular distributions. There can be no assurances that we will be successful in meeting our investment objective.

    Each of our loans was originated by Terra Capital Partners or its affiliates. Our portfolio is diversified based on location of the underlying properties, loan structure and property type. As of December 31, 2021, our portfolio included underlying properties located in 21 markets, across nine states and includes property types such as multifamily housing, hotels, student housing, commercial offices, medical offices, mixed-use and industrial properties. The profile of these properties ranges from stabilized and value-added properties to pre-development and construction. Our loans are structured across mezzanine debt, first mortgages, preferred equity investments and credit facilities.

    We believe that compelling opportunities for us will emerge as a result of the economic downturn caused by the ongoing COVID-19 pandemic. While the COVID-19 pandemic has had a demonstrable effect on employment, the economy and the public’s morale, its impact on property values has yet to be fully realized because property values are the result of slow moving forces, including consumer behavior, supply and demand for space, availability and pricing of mortgage financing and investor demand. As these factors become clear and commercial real estate is repriced accordingly, we believe there will be abundant opportunities available to experienced alternative lenders like us to provide financing for property acquisition, refinancing, development and redevelopment on attractive terms that reflect the new realities of the economy. 

    We were incorporated under the general corporation laws of the State of Maryland on December 31, 2015. Through December 31, 2015, our business was conducted through a series of predecessor private partnerships. At the beginning of 2016, we completed the merger of these private partnerships into a single entity as part of our plan to reorganize our business as a REIT for federal income tax purposes (the “REIT formation transaction”). Following the REIT formation transaction, Terra Fund 5 contributed the consolidated portfolio of net assets of the Terra Funds to us in exchange for all of the shares of common stock of our company.

    On March 1, 2020, Terra Property Trust 2 merged with and into our company, and we continued as the surviving corporation (the “Merger”). In connection with the Merger, we issued 2,116,785.76 shares of our common stock to Terra Fund 7, the sole stockholder of Terra Property Trust 2, in exchange for the settlement of $17.7 million of participation interests in loans held by us, cash of $16.9 million and other working capital. Subsequent to the Merger, Terra Fund 5 and Terra Fund 7 contributed their shares of our common stock to Terra JV in exchange for ownership interest in Terra JV. In addition, on March 2, 2020, we issued 2,457,684.59 shares of our common stock to Terra Offshore REIT in exchange for the settlement of $32.1 million of participation interests in loans also held by us, $8.6 million in cash and other net working capital (“Issuance of Common Stock to Terra Offshore REIT”). As of December 31, 2021, Terra JV held 87.4% of the issued and outstanding shares of our common stock with the remainder held by Terra Offshore REIT; and Terra Fund 5 and Terra Fund 7 owned an 87.6% and 12.4% interest, respectively, in Terra JV.

As previously disclosed, we continue to explore alternative liquidity transactions on an opportunistic basis to maximize stockholder value. Examples of the alternative liquidity transactions that, depending on market conditions, may be available to us include a listing of our shares of common stock on a national securities exchange, adoption of a share repurchase plan, a liquidation of our assets, a sale of our company or a strategic business combination, in each case, which may include the in-kind distribution of our shares of common stock indirectly owned by certain Terra Funds to the ultimate investors in the Terra Funds. We may pursue such a liquidity transaction as early as 2022, but we cannot provide any assurance that any alternative liquidity transaction will be available to us or, if available, that we will pursue or be successful in completing any such alternative liquidity transaction.

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We have elected to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2016. So long as we qualify as a REIT, we generally are not subject to U.S. federal income tax on our net taxable income to the extent that we annually distribute all of our net taxable income to our stockholders.

Our Manager, MAVIK Capital Management, LP and Terra Capital Partners

    We are externally managed by our Manager, which is registered as an investment adviser under the Investment Advisers Act of 1940 (the “Advisers Act”), and is a subsidiary of Terra Capital Partners.

On April 1, 2021, MAVIK Capital Management, LP (“Mavik”), an entity controlled by Vikram S. Uppal, our Chief Executive Officer, completed a series of related transactions that resulted in all of the outstanding interests in Terra Capital Partners being acquired by Mavik for a combination of cash and interests in Mavik (the “Recapitalization”). As part of the Recapitalization, a private fund managed by a division of a publicly-traded alternative asset manager, acquired a passive interest consisting of “non-voting securities,” as that term is defined under the 1940 Act, in Mavik.    

Terra Capital Partners is led by Vikram S. Uppal (Chief Executive Officer), Gregory M. Pinkus (Chief Financial Officer) and Daniel Cooperman (Chief Originations Officer). Mr. Uppal was a Partner of Axar Capital Management L.P. (“Axar Capital Management”) and its Head of Real Estate. Prior to Axar Capital Management, Mr. Uppal was a Managing Director on the Investment Team at Fortress Investment Group’s Credit and Real Estate Funds and Co-Head of North American Real Estate Investments at Mount Kellett Capital Management. Members of the Terra Capital Partners management team have broad based, long-term relationships with major financial institutions, property owners and commercial real estate service providers. The entire senior management team has held leadership roles at many top international real estate and investment banking firms, including Mount Kellett Capital Management and Fortress Investment Group.

Terra Capital Partners is a real estate credit focused investment manager based in New York City with a 19-year track record focused primarily on the origination and management of mezzanine loans, as well as first mortgage loans, bridge loans, and preferred equity investments in all major property types through multiple public and private pooled investment vehicles. Since its formation in 2001 and its commencement of operations in 2002, Terra Capital Partners has been engaged in providing financing on commercial properties of all major property types throughout the United States. In the lead up to the global financial crisis in 2007, believing that the risks associated with commercial real estate markets had grown out of proportion to the potential returns from such markets, Terra Capital Partners sold 100% of its investment management interests prior to the global financial crisis. It was not until mid-2009, after its assessment that commercial mortgage markets would begin a period of stabilization and growth, that Terra Capital Partners began to sponsor new investment vehicles, which included the predecessor private partnerships, to again provide debt capital to commercial real estate markets. The financings provided by all vehicles managed by Terra Capital Partners from January 2004 through December 31, 2021 have been secured by approximately 13.9 million square feet of office properties, 3.7 million square feet of retail properties, 5.5 million square feet of industrial properties, 5,058 hotel rooms and 27,925 apartment units. The value of the properties underlying this capital was approximately $10.6 billion based on appraised values as of the closing dates of each financing. In addition to its extensive experience originating and managing debt financings, Terra Capital Partners and its affiliates owned and operated over six million square feet of office and industrial space between 2005 and 2007, and this operational experience further informs its robust origination and underwriting standards and enables our Manager to effectively operate property underlying a financing upon a foreclosure.

Our Investment Strategy

    We focus on providing commercial real estate loans to creditworthy borrowers and seek to generate an attractive and consistent low volatility cash income stream. Our focus on originating debt and debt-like instruments emphasizes the payment of current returns to investors and the preservation of invested capital.

    As part of our investment strategy, we:

•target middle market loans of approximately $10 million to $50 million;

•focus on the origination of new loans, not on the acquisition of loans originated by other lenders;

•invest primarily in floating rate rather than fixed rate loans, but our Manager reserves the right to make debt investments that bear interest at a fixed rate;

•originate loans expected to be repaid within one to five years;

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•maximize current income;

•lend to creditworthy borrowers;

•construct a portfolio that is diversified by property type, geographic location, tenancy and borrower;

•source off-market transactions; and

•hold loans until maturity unless, in our Manager’s judgment, market conditions warrant earlier disposition.

Our Financing Strategy

    We have historically utilized only limited amounts of borrowings as part of our financing strategy. One of the reasons we completed the REIT formation transactions, as described under “—Overview,” is to expand our financing options, access to capital and capital flexibility in order to position us for future growth. We deploy moderate amounts of leverage as part of our operating strategy, which currently consists of unsecured notes payable, borrowings under first mortgage financings, a revolving line of credit, repurchase agreements and a term loan. We may in the future also deploy leverage through other credit facilities and senior notes and we may divide the loans we originate into senior and junior tranches and dispose of the more senior tranches as an additional means of providing financing to our business. In addition, we intend to match our use of floating rate leverage with floating rate investments.

    As of December 31, 2021, we had outstanding indebtedness, consisting of borrowings under a mortgage loan of $32.0 million, unsecured notes payable of $85.1 million, the term loan of $93.8 million, a line of credit of $38.6 million and the repurchase agreement of $44.6 million. As of December 31, 2021, the amount remaining available under the line of credit and the repurchase agreement was $36.4 million and $150.4 million, respectively.

    Additionally, as of December 31, 2021, we had obligations under participation agreements and secured borrowing with an aggregate outstanding principal amount of $76.6 million. However, we do not have direct liability to a participant under the participation agreements with respect to the underlying loan and the participants’ share of the investments is repayable only from the proceeds received from the related borrower/issuer of the investments and, therefore, the participants also are subject to credit risk (i.e., risk of default by the underlying borrower/ issuer). With our larger size and enhanced access to capital and capital flexibility, our company expects to deemphasize our use of participation arrangements. For additional information concerning our indebtedness, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10‑K.

Targeted Assets

Real Estate-Related Loans

    We originate, structure, fund and manage commercial real estate loans, including mezzanine loans, first mortgage loans, subordinated mortgage loans and preferred equity investments related to high-quality commercial real estate in the United States. We may also, to the extent consistent with our qualification as a REIT, acquire equity participations in the underlying collateral of some of such loans. We originate, structure and underwrite most, if not all, of our loans. We, in reliance on our Manager, use what we consider to be conservative underwriting criteria, and our underwriting process involves comprehensive financial, structural, operational and legal due diligence to assess the risks of financings so that we can optimize pricing and structuring. By originating, not purchasing, loans, we are able to structure and underwrite financings that satisfy our standards, utilize our proprietary documentation and establish a direct relationship with our borrower. Described below are some of the types of loans we own and seek to originate with respect to high-quality properties in the United States. We continue to see attractive lending opportunities, and we expect market conditions to remain favorable for our strategy for the foreseeable future.

    Mezzanine Loans. These are loans secured by ownership interests in an entity that owns commercial real estate and that generally finance the acquisition, refinancing, rehabilitation or construction of commercial real estate. Mezzanine loans may be either short-term (one to five years) or long-term (up to 10 years) and may be fixed or floating rate. We may own mezzanine loans directly or we may hold a participation in a mezzanine loan or a sub-participation in a mezzanine loan. These loans generally pay interest on a specified due date (although there may be a portion of the interest that is deferred) and may, to the extent consistent with our qualification as a REIT, provide for participation in the value or cash flow appreciation of the underlying property as described below. Generally, we invest in mezzanine loans with last dollar loan-to-value ratios ranging

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from 60% to 85%. As of December 31, 2021, we owned three mezzanine loans with a total net principal amount of $17.4 million, which constituted 4.3% of our net loan investment portfolio.

    Preferred Equity Investments. These are investments in preferred membership interests in an entity that owns commercial real estate and generally finance the acquisition, refinancing, rehabilitation or construction of commercial real estate. These investments are expected to have characteristics and returns similar to mezzanine loans. As of December 31, 2021, we owned three preferred equity investments with a total net principal amount of $63.4 million, which constituted 15.7% of our net loan investment portfolio.

    First Mortgage Loans. These loans generally finance the acquisition, refinancing, rehabilitation or construction of commercial real estate. First mortgage loans may be either short-term (one to five years) or long-term (up to 10 years), may be fixed or floating rate and are predominantly current-pay loans. Our Manager originates current-pay first mortgage loans backed by high-quality properties in the United States that fit our investment strategy. Certain of our first mortgage loans finance the acquisition, rehabilitation and construction of infill land property and for these loans we target a weighted average last dollar loan-to-value of 70%. We may selectively syndicate portions of our first mortgage loans, including senior or junior participations to provide third-party financing for a portion of the loan or optimize returns which may include retained origination fees.

    First mortgage loans are expected to provide for a higher recovery rate and lower defaults than other debt positions due to the lender’s senior position. However, such loans typically generate lower returns than subordinate debt such as mezzanine loans, B-notes, or preferred equity investments. As of December 31, 2021, we owned 14 first mortgage loans with a total net principal amount of $310.9 million, which constituted 77.0% of our net loan investment portfolio. As of December 31, 2021, we used $163.1 million of senior mortgage loans as collateral for $93.8 million of borrowings under a term loan; $60.1 million of senior mortgage loans as collateral for $38.6 million of borrowings under a revolving line of credit and $67.4 million of senior mortgage loans as collateral for $44.6 million of borrowings under a repurchase agreement.

    Subordinated Mortgage Loans (B-notes). B-notes include structurally subordinated mortgage loans and junior participations in first mortgage loans or participations in these types of assets. Like first mortgage loans, these loans generally finance the acquisition, refinancing, rehabilitation or construction of commercial real estate. B-notes may be either short-term (one to five years) or long-term (up to 10 years), may be fixed or floating rate and are predominantly current-pay loans. We may create B-notes by tranching our directly originated first mortgage loans generally through syndications of senior first mortgages or buy these loans directly from third-party originators. As a result of the current credit market disruption related to the most recent recession and the decrease in capital available in this part of the capital structure, we believe that the opportunities to both directly originate and to buy these types of loans from third-parties on favorable terms will continue to be attractive.

    Investors in B-notes are compensated for the increased risk of such assets from a pricing perspective but still benefit from a mortgage lien on the related property. Investors typically receive principal and interest payments at the same time as senior debt unless a default occurs, in which case any such payments are made only after any senior debt is made whole. Rights of holders of B-notes are usually governed by participation and other agreements that, subject to certain limitations, typically provide the holders of subordinated positions of the mortgage loan with the ability to cure certain defaults and control certain decisions of holders of senior debt secured by the same properties (or otherwise exercise the right to purchase the senior debt), which provides for additional downside protection and higher recoveries. As of December 31, 2021, we did not own any B-notes.

    Equity Participations. In connection with our loan origination activities, we may pursue equity participation opportunities, or interests in the projects being financed, in instances when we believe that the risk-reward characteristics of the loan merit additional upside participation because of the possibility of appreciation in value of the underlying properties securing the loan. Equity participations can be paid in the form of additional interest, exit fees or warrants in the borrower. Equity participation can also take the form of a conversion feature, permitting the lender to convert a loan or preferred equity investment into equity in the borrower at a negotiated premium to the current net asset value of the borrower. We expect to obtain equity participations in certain instances where the loan collateral consists of a property that is being repositioned, expanded or improved in some fashion which is anticipated to improve future cash flow. In such case, the borrower may wish to defer some portion of the debt service or obtain higher leverage than might be merited by the pricing and leverage level based on historical performance of the underlying property. We can generate additional revenues from these equity participations as a result of excess cash flows being distributed or as appreciated properties are sold or refinanced. As of December 31, 2021, we did not own any equity participations.

    Other Real Estate-Related Investments. We may invest in other real estate-related investments, which may include CMBS or other real estate debt or equity securities, so long as such investments do not constitute more than 15% of our assets. Certain

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of our real estate-related loans require the borrower to make payments of interest on the fully committed principal amount of the loan regardless of whether the full loan amount is outstanding. As of December 31, 2021, we owned a 50.0% equity interest in a limited partnership that invests in performing and non-performing mortgages, loans, mezzanines, B-notes and other credit instruments supported by underlying commercial real estate assets. Additionally, we owned equity interests in two joint ventures that invest in real estate properties. We also owned a credit facility that is collateralized by underlying commercial real estate assets. These equity interests had a total carrying value of $69.7 million and the credit facility had a net principal balance of $11.8 million as of December 31, 2021.

Operating Real Estate

    From time to time, we may acquire operating real estate properties, including properties acquired in connection with foreclosures or deed in lieu of foreclosure. In July 2018, we acquired a multi-tenant office building through foreclosure of a first mortgage loan. In January 2019, we acquired a 4.9 acre development parcel through deed in lieu of foreclosure. As of December 31, 2021, the office building and the development parcel had a carrying value of $56.1 million, and the mortgage loan payable encumbering the office building had a principal amount of $32.0 million.

Investment Guidelines

    Our board of directors has adopted investment guidelines, which may be amended from time to time, that set forth certain criteria for the Manger to use when evaluating specific investment opportunities as well as our overall portfolio composition. Our board of directors will review the Manager’s compliance with the investment guidelines periodically and receive an investment report at each quarter-end in conjunction with the review of our quarterly results by our board of directors.

    Our board of directors adopted the following investment guidelines:

•no origination or acquisition shall be made that would cause us to fail to qualify as a REIT;

•no origination or acquisition shall be made that would cause us or any of our subsidiaries to be required to register as an investment company under the 1940 Act; and

•until appropriate investments can be identified, we may invest the proceeds of our equity or debt offerings in interest-bearing, short-term investments, including money market accounts and/or funds, that are consistent with our intention to qualify as a REIT.

    These investment guidelines may be changed from time to time by a majority of our board of directors without the approval of our stockholders.

Disposition Policies

    The period we hold our investments in real estate-related loans varies depending on the type of asset, interest rates and other factors. Our Manager has developed a well-defined exit strategy for each of our investments. Our Manager continually performs a hold-sell analysis on each asset in order to determine the optimal time to hold the asset and generate a strong return to our stockholders. Economic and market conditions may influence us to hold investments for longer or shorter periods of time. We may sell an asset before the end of the expected holding period if we believe that market conditions have maximized its value to us or the sale of the asset would otherwise be in our best interests. We intend to make any such dispositions in a manner consistent with our qualification as a REIT and our desire to avoid being subject to the “prohibited transaction” penalty tax.

Operating and Regulatory Structure

REIT Qualification

    We elected to be taxed as a REIT under the Code commencing with our taxable year ended December 31, 2016. We believe that we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT under the Code, and that our manner of operation will enable us to continue to meet the requirements for qualification and taxation as a REIT. To qualify as a REIT, we must meet on a continuing basis, through our organization and actual investment and operating results, various requirements under the Code relating to, among other things, the sources of our gross income, the composition and values of our assets, our distribution levels and the diversity of ownership of shares of our stock. If we fail to qualify as a REIT in any taxable year and do not qualify for certain statutory relief provisions, we will be subject to U.S. federal

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income tax at regular corporate rates and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year during which we failed to qualify as a REIT. Even if we qualify for taxation as a REIT, we may be subject to some U.S. federal, state and local taxes on our income or property. In addition, subject to maintaining our qualification as a REIT, a portion of our business may be conducted through, and a portion of our income may be earned with respect to, our taxable REIT subsidiaries (“TRSs”), should we decide to form TRSs in the future, which are subject to corporate income tax. Any distributions paid by us generally will not be eligible for taxation at the preferential U.S. federal income tax rates that currently apply to certain distributions received by individuals from taxable corporations, unless such distributions are attributable to dividends received by us from our TRSs, should we form a TRS in the future.

1940 Act Exclusion

    We are not registered as an investment company under the 1940 Act. If we were obligated to register as an investment company, we would have to comply with a variety of substantive requirements under the 1940 Act that impose, among other things:

•limitations on our capital structure and the use of leverage;

•restrictions on specified investments;

•prohibitions on transactions with affiliates; and

•compliance with reporting, record keeping, and other rules and regulations that would significantly change our operations.

    We conduct our operations so that neither we nor our subsidiaries are required to register as an investment company under the 1940 Act. Section 3(a)(1)(A) of the 1940 defines an investment company as any issuer that is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the 1940 Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Excluded from the term “investment securities,” among other things, are U.S. government securities and securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exclusion from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the 1940 Act. The value of the “investment securities” held by an issuer must be less than 40% of the value of such issuer’s total assets on an unconsolidated basis (exclusive of U.S. government securities and cash items). In addition, we conduct our operations so that neither we nor our subsidiaries will be considered an investment company under Section 3(a)(1)(A) of the 1940 Act, as neither we nor our subsidiaries are engaged primarily nor do we hold ourselves out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, we are primarily engaged in the non-investment company businesses of our subsidiaries.

    We and certain of our subsidiaries may at times rely primarily on the exclusion from the definition of an investment company under Section 3(c)(5)(C) of the 1940 Act, or any other exclusions that may be available to us (other than the exclusions under Section 3(c)(1) or Section 3(c)(7)). Section 3(c)(5)(C) of the 1940 Act is available for entities primarily engaged in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate. This exclusion generally requires that at least 55% of our portfolio must be comprised of “qualifying real estate” assets and at least 80% of our portfolio must be comprised of “qualifying real estate” assets and “real estate-related” assets (and no more than 20% comprised of miscellaneous assets). For purposes of the Section 3(c)(5)(C) exclusion, we classify our investments based in large measure on no-action letters issued by the staff of the SEC and other SEC interpretive guidance and, in the absence of SEC guidance, on our view of what constitutes a “qualifying real estate” asset and a “real estate-related” asset. These no-action positions were issued in accordance with factual situations that may be substantially different from the factual situations we may face, and a number of these no-action letters were issued more than twenty years ago. Pursuant to this guidance, and depending on the characteristics of the specific investments, certain mortgage loans, participations in mortgage loans, mortgage-backed securities, mezzanine loans, joint venture investments, preferred equity and the equity securities of other entities may not constitute qualifying real estate assets and therefore our investments in these types of assets may be limited. No assurance can be given that the SEC or its staff will concur with our classification of the assets we hold for purposes of the 3(c)(5)(C) exclusion or any other exclusion or exemption under the 1940 Act. Future revisions to the 1940 Act or further guidance from the SEC or its staff may cause us to lose our exclusion from registration or force us to re-evaluate our portfolio and investment strategy. Such changes may prevent us from operating our business successfully.

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    In order to maintain an exclusion from registration under the 1940 Act, we may be unable to sell assets that we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional income or loss generating assets that we might not otherwise have acquired or may have to forgo opportunities to acquire assets that we would otherwise want to acquire and would be important to our strategy.

    Although we monitor our portfolio periodically and prior to each acquisition and disposition, we may not be able to maintain an exclusion from registration as an investment company. If we were required to register as an investment company, but failed to do so, we would be prohibited from engaging in our business, and legal proceedings could be instituted against us. In addition, our contracts may be unenforceable, and a court could appoint a receiver to take control of us and liquidate our business, all of which would have an adverse effect on our business.

Emerging Growth Company Status

    We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), and as such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. A number of these exemptions are not relevant to us, but we intend to take advantage of the exemption from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002.

    In addition, Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition period provided in Section 13(a) of the Exchange Act for complying with new or revised accounting standards. This permits an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to take advantage of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

    We will remain an “emerging growth company” until the earliest to occur of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.07 billion, (ii) the date on which we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, (iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three-year period, and (iv) the end of the year in which the five year anniversary of our initial public offering of our common stock occurs.

Competition

    We compete with other REITs, numerous regional and community banks, specialty finance companies, savings and loan associations and other entities, and we expect that others may be organized in the future. The effect of the existence of additional REITs and other institutions may be increased competition for the available supply of our targeted assets suitable for purchase, which may cause the price for such assets to rise.

    In the face of this competition, we expect to have access to our Manager’s professionals and their industry expertise, which may provide us with a competitive advantage in sourcing transactions and help us assess origination and acquisition risks and determine appropriate pricing for potential assets. The more conservative underwriting standards used by many large commercial banks and traditional providers of commercial real estate capital following the 2008 downturn has and we believe will continue to constrain the lending capacity of these institutions. However, we may not be able to achieve our business goals or expectations due to the competitive risks that we face. For additional information concerning these competitive risks, see “Item 1A. Risk Factors — New entrants in the market for commercial loan originations and acquisitions could adversely impact our ability to originate and acquire real estate-related loans at attractive risk-adjusted returns” in this Annual Report on Form 10-K.

Governmental Regulations

As an owner of real estate, our operations are subject, in certain instances, to supervision and regulation by U.S. and other governmental authorities, and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which, include among other things: (i) federal and state securities laws and regulations; (ii) federal, state and local tax laws and regulations, (ii) state and local laws relating to real property; (iv) federal, state and local environmental laws, ordinances, and regulations, and (v) various laws relating to housing, including permanent and temporary

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rent control and stabilization laws, the Americans with Disabilities Act of 1990 and the Fair Housing Amendment Act of 1988, among others.

Compliance with the federal, state and local laws described above has not had a material, adverse effect on our business, assets, results of operations, financial condition and ability to pay distributions, and we do not believe that our existing portfolio will require us to incur material expenditures to comply with these laws and regulations.

Employees; Staffing; Human Capital

    We are supervised by our board of directors consisting of four directors. We have entered into a management agreement (“Management Agreement”) with our Manager pursuant to which certain services are provided by our Manager and paid for by us. Our Manager is not obligated under the Management Agreement to dedicate any of its personnel exclusively to us, nor is it or its personnel obligated to dedicate any specific portion of its or their time to our business. We are responsible for the costs of our own employees; however, we do not currently have any employees and do not currently expect to have any employees. See “Item 10. Directors, Executive Officers and Corporate Governance” in this Annual Report on Form 10-K.

Available Information

We are subject to the information requirements of the Exchange Act. Therefore, we file periodic reports and other information with the SEC. Stockholders may obtain copies of our filings with the SEC, free of charge from the website maintained by the SEC at www.sec.gov or from our website at www.terrapropertytrust.com. We will provide without charge a copy of this Annual Report on Form 10-K, including financial statements and schedules, upon written request delivered to our principal executive offices.

We are providing the address to our website solely for the information of investors. The information on our website is not a part of, nor is it incorporated by reference into, this Annual Report on Form 10-K.

Item 1A. Risk Factors.

    Before making an investment decision, you should carefully consider the following risk factors together with all of the other information contained in this Annual Report on Form 10-K.The risks set forth below are not the only risks we face, and we may face other risks that we have not yet identified, which we do not currently deem material or which are not yet predictable. If any of the following risks occur, our results of operations, financial condition and cash flows could be materially adversely affected. Some statements in this section constitute forward-looking statements. See “Forward-Looking Statements.”

Risks Related to Owning Our Common Stock

There is no public market for our common stock and a market may never develop, which could cause our common stock to trade at a discount and make it difficult for holders of our common stock to sell their shares.

    There is no established trading market for our common stock, and there can be no assurance that an active trading market for our common stock will develop, or if one develops, be maintained. Accordingly, no assurance can be given as to the ability of our stockholders to sell their common stock or the price that our stockholders may obtain for their common stock.

    Some of the factors that could negatively affect the market price of our common stock include:

•our expected operating results and our ability to make distributions to our stockholders in the future;

•volatility in our industry, the performance of the real estate-related loans we target, interest rates and spreads, the debt or equity markets, the general economy or the real estate market specifically, whether the result of market events or otherwise;

•the availability of financing on acceptable terms or at all;

•events or circumstances which undermine confidence in the financial markets or otherwise have a broad impact on financial markets, such as the sudden instability or collapse of large depository institutions or other significant corporations, terrorist attacks, natural or man-made disasters or threatened or actual armed conflicts;

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•the availability of attractive risk-adjusted investment opportunities in real estate-related loans that satisfy our objectives and strategies;

•the degree and nature of our competition;

•changes in personnel of our Manager and lack of availability of qualified personnel;

•unanticipated costs, delays and other difficulties in executing our long-term growth strategy;

•the timing of cash flows, if any, from our investments due to the lack of liquidity of loans relative to more commonly traded securities;

•an increase in interest rates;

•the performance, financial condition and liquidity of our borrowers; and

•legislative and regulatory changes (including changes to laws governing the taxation of REITs or the exclusion or exemption from registration as an investment company under the 1940 Act).

    Market factors unrelated to our performance could also negatively impact the market price of our common stock. One of the factors that investors may consider in deciding whether to buy or sell our common stock is our distribution rate as a percentage of our stock price relative to market interest rates. If market interest rates increase, prospective investors may demand a higher distribution rate or seek alternative investments paying higher dividends or interest. As a result, interest rate fluctuations and conditions in capital markets can affect the fair market value of our common stock. For instance, if interest rates rise, it is likely that the market price of our common stock will decrease as market rates on interest-bearing securities increase.

If we complete an alternative liquidity transaction by pursuing an initial public offering or listing of our shares of common stock in the future, you will be subject to additional risks.

    As previously disclosed, we continue to explore alternative liquidity transactions on an opportunistic basis to maximize stockholder value. Examples of the alternative liquidity transactions that, depending on market conditions, may be available to us include a listing of our shares of common stock on a national securities exchange, adoption of a share repurchase plan, a liquidation of our assets, a sale of our company or a strategic business combination, in each case, which may include the in-kind distribution of our shares of common stock indirectly owned by certain Terra Funds to the ultimate investors in the Terra Funds. We may pursue such a liquidity transaction as early as this year, but we cannot provide any assurance that any alternative liquidity transaction will be available to us or, if available, that we will pursue or be successful in completing any such alternative liquidity transaction. If we complete an alternative liquidity transaction that involves us becoming a publicly traded company through an initial public offering or listing of our shares of common stock on a national securities exchange, you will subject to the following additional risks:

    Trading Value of our Shares: Our shares will be publicly traded and investors will be able to assess the value of their shares by reference to the public trading price of our shares.

    Distributions: We do not expect that the distributions investors receive following any such liquidity event would be adversely impacted. Following any such transaction, we would be expected to pay regular monthly distributions to our stockholders and would continue to be required to distribute 90% of our taxable income (excluding net capital gains) to our investors each year in order to maintain our qualification as a REIT.

    Manager Compensation: We expect we will enter into a new management agreement with our Manager or an affiliate of our Manager. The base management fees, incentive distributions or other amounts that would be payable to our Manager in the case of any such transaction are expected to be market-based fees determined in the case of any initial public offering by discussions between our Manager and the underwriters involved in the initial public offering. Any such fees are expected to be paid in lieu of the fees currently payable to our Manager.

    Transfer Restrictions: We expect that shares currently held by our stockholders will constitute restricted securities under the Securities Act and will be subject to restrictions on transfer under applicable U.S. securities laws

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Common stock and preferred stock eligible for future sale may have adverse effects on our share price.

    Our board of directors has the power, without further stockholder approval, to authorize us to issue additional authorized shares of common stock and preferred stock on the terms and for the consideration it deems appropriate subject, if applicable, to the rules of any stock exchange on which our securities may be listed or traded and the terms of any class or series of our stock. We cannot predict the effect, if any, of future sales of our common stock, or the availability of shares for future sales, on the market price of our common stock. Sales of substantial amounts of common stock or the perception that such sales could occur may adversely affect the prevailing market price for our common stock. As of December 31, 2021, Terra JV held 87.4% of the issued and outstanding shares of our common stock with the remainder held by Terra Offshore REIT; and Terra Fund 5 and Terra Fund 7 owned an 87.6% and 12.4% interest, respectively, in Terra JV.

Our principal stockholders, which are currently controlled by affiliates of our Manager, own a significant amount of our outstanding shares of common stock, which is sufficient to approve or veto most corporate actions requiring a vote of our stockholders.

    Through Terra JV, Terra Fund 5 and Terra Fund 7 beneficially own shares of our common stock representing 76.5% and 10.9% of the voting power of our outstanding shares of common stock, respectively. In addition, Terra Offshore REIT owns shares of our common stock representing 12.6% of the voting power of our outstanding shares of common stock. Our Manager also serves as manager to Terra Offshore REIT. As a result, our Manager and its affiliates (for the period that such shares continue to be held by Terra Fund 5 and Terra Fund 7 through Terra JV, and Terra Offshore REIT and not distributed to their respective equity owners), subject to a voting agreement as described below, have significant control over matters submitted to our stockholders for approval, including:

•the election and removal of directors; and

•the approval of any merger, consolidation or sale of all or substantially all of our assets.

    Our Manager is a subsidiary of Terra Capital Partners, On April 1, 2021, Mavik, an entity controlled by Vikram S. Uppal, our Chief Executive Officer, completed a series of related transactions that resulted in all of the outstanding interests in Terra Capital Partners being acquired by Mavik for a combination of cash and interests in Mavik. Terra Fund 5 and Terra Fund 7 are managed by Terra Fund Advisors, which is 51% owned by Bruce Batkin, Dan Cooperman and Simon Mildé and 49% owned by an affiliate of Axar Capital Management. On March 2, 2020, we, Terra Fund 5, Terra JV and Terra REIT Advisors also entered into the Amended and Restated Voting Agreement (the “Voting Agreement”), pursuant to which Terra Fund 5 assigned its rights and obligations under the Voting Agreement to Terra JV. Consistent with the original voting agreement dated February 8, 2018, for the period that Terra REIT Advisors remains our external manager, Terra REIT Advisors will have the right to nominate two individuals to serve as our directors and, until Terra JV no longer holds at least 10% of our outstanding shares of common stock, Terra JV will have the right to nominate one individual to serve as one of our director. Except as otherwise required by law or the provisions of other agreements to which the parties are or may in the future become bound, the parties have agreed to vote all shares of our common stock directly or indirectly owned in favor (or against removal) of the directors properly nominated in accordance with the Voting Agreement. Other than with respect to the election of directors, the Voting Agreement requires that Terra Fund 5 vote all shares of our common stock directly or indirectly owned by Terra Fund 5 in accordance with the recommendations made by our board of directors.

    In addition, our Manager’s and its affiliates’ voting control may discourage transactions involving a change of control of our company, including transactions in which a holder of our common stock might otherwise receive a premium for his or her shares over the then-current market price.

Holders of our common stock may receive distributions on a delayed basis or distributions may decrease over time. Changes in the amount and timing of distributions we pay or in the tax characterization of distributions we pay may adversely affect the fair value of our common stock or may result in holders of our common stock being taxed on distributions at a higher rate than initially expected.

Our distributions are driven by a variety of factors, including our minimum distribution requirements under the REIT tax laws and our REIT taxable income (including certain items of non-cash income) as calculated pursuant to the Internal Revenue Code. We are generally required to distribute to our stockholders at least 90% of our REIT taxable income, although our reported financial results for United States generally accepted accounting principles (“U.S. GAAP”) purposes may differ materially from our REIT taxable income.

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For the years ended December 31, 2021 and 2020, our board of directors declared total cash distributions of $0.88 and $1.16 per share, respectively, that were paid monthly in the same period in which each was declared.

We continue to prudently evaluate our liquidity and review the rate of future distributions in light of our financial condition and the applicable minimum distribution requirements under applicable REIT tax laws and regulations. We may determine to pay distributions on a delayed basis or decrease distributions for a number of factors, including the risk factors described in this Annual Report on Form 10-K.

To the extent we determine that future distributions would represent a return of capital to investors or would not be required under applicable REIT tax laws and regulations rather than the distribution of income, we may determine to discontinue distribution payments until such time that distributions would again represent a distribution of income or be required under applicable REIT tax laws and regulations. Any reduction or elimination of our payment of distributions would not only reduce the amount of distributions you would receive as a holder of our common stock, but could also have the effect of reducing the fair value of our common stock and our ability to raise capital in future securities offerings.

In addition, the rate at which holders of our common stock are taxed on distributions we pay and the characterization of our distribution, whether through ordinary income, capital gains, or a return of capital, could have an impact on the fair value of our common stock. After we announce the expected characterization of distributions we have paid, the actual characterization (and, therefore, the rate at which holders of our common stock are taxed on the distributions they have received) could vary from our expectations, including due to errors, changes made in the course of preparing our corporate tax returns, or changes made in response to an audit by the Internal Revenue Service (the “IRS”), with the result that holders of our common stock could incur greater income tax liabilities than expected.

Investing in our common stock may involve a high degree of risk and may result in loss of capital invested in us.

    Our investment strategy and our originations may result in a high amount of risk when compared to alternative strategies and volatility or loss of principal. Our originations or acquisitions may be highly speculative and aggressive, and therefore an investment in our shares of common stock may not be suitable for someone with lower risk tolerance.

Risks Related to Our Business

Changes in national, regional or local economic, demographic or real estate market conditions may adversely affect our results of operations, our financial position, the value of our assets and our cash flows.

We are subject to risks incident to the ownership of real estate-related assets including: changes in national, regional or local economic, demographic or real estate market conditions; changes in supply of, or demand for, similar properties in an area; increased competition for real estate assets targeted by our investment strategy; bankruptcies, financial difficulties or lease defaults by property owners and tenants; inflation; changes in interest rates and availability of financing; and changes in government rules, regulations and fiscal policies, including changes in tax, real estate, environmental and zoning laws. Our assets are also subject to the risk of significant adverse changes in financial market conditions that can result in a deleveraging of the global financial system and the forced sale of large quantities of mortgage-related and other financial assets. Concerns over economic recession, geopolitical issues, including events such as the United Kingdom’s exit from the European Union, unemployment, the availability and cost of finance, or a prolonged government shutdown may contribute to increased volatility and diminished expectations for the economy and markets, which could result in an increase in mortgage defaults or a decline in the value of our assets. In addition, any increase in mortgage defaults in the residential market may have a negative impact on the credit markets generally as well as on economic conditions generally. We do not know whether the values of the property securing our real estate-related loans will remain at the levels existing on the dates of origination of such loans, and we are unable to predict future changes in national, regional or local economic, demographic or real estate market conditions. These conditions, or others we cannot predict, may adversely affect our results of operations, our financial position, the value of our assets and our cash flows.

The lack of liquidity of our assets may adversely affect our business, including our ability to value and sell our assets.

A portion of the real estate-related loans and other assets we originate or acquire may be subject to legal and other restrictions on resale or will otherwise be less liquid than publicly-traded securities. The illiquidity of our assets may make it difficult for us to sell such assets if the need or desire arises. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less value than the value at which we have previously recorded our assets. As a result, our ability to vary our portfolio in response to changes in economic and other conditions may be relatively limited, which could adversely affect our results of operations, financial condition and cash flows.

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Our investments are selected by our Manager and our investors will not have input into investment decisions.

Pursuant to the terms of the Management Agreement, our Manager is responsible for, among other services, managing the investment and reinvestment of our assets, subject to the oversight and supervision of our board of directors. Our investors will not have input into investment decisions. This will increase the uncertainty, and thus the risk, of investing in us, as we may make investments with which you may not agree. Our Manager intends to conduct due diligence with respect to each investment and suitable investment opportunities may not be immediately available. The failure of our Manager to find investments that meet our investment criteria in sufficient time or on acceptable terms could result in unfavorable returns and could cause a material adverse effect on our results of operations, financial condition and cash flows. Even if investment opportunities are available, there can be no assurance that the due diligence processes of our Manager will uncover all relevant facts or that any particular investment will be successful.

From time to time, before appropriate real estate-related investments can be identified, our Manager may choose to have us invest in interest-bearing, short-term investments, including money market accounts and/or funds, that are consistent with our intention to maintain our qualification as a REIT. These short-term, non-real estate-related investments, if any, are expected to provide a lower net return than we will seek to achieve from investments in real estate-related loans and other commercial real estate assets. Furthermore, when our Manager does identify suitable real estate- related loans and other commercial real estate assets that are the types of assets which we target, you will be unable to influence the decision of our Manager ultimately to invest in, or refrain from investing in, such assets.

Our Manager’s due diligence of potential real estate-related loans and other commercial real estate assets may not reveal all of the liabilities associated with such assets and may not reveal other weaknesses in our assets, which could lead to investment losses.

Before originating or acquiring a financing, our Manager calculates the level of risk associated with the real estate-related loans and other commercial real estate assets to be originated or acquired based on several factors which include the following: top-down reviews of both the current macroeconomic environment generally and the real estate and commercial real estate loan market specifically; detailed evaluation of the real estate industry and its sectors; bottom-up reviews of each individual investment’s attributes and risk/reward profile relative to the macroeconomic environment; and quantitative cash flow analysis and impact of the potential investment on our portfolio. In making the assessment and otherwise conducting customary due diligence, we employ standard documentation requirements and require appraisals prepared by local independent third-party appraisers selected by us. Additionally, we seek to have borrowers or sellers provide representations and warranties on loans we originate or acquire, and if we are unable to obtain representations and warranties, we factor the increased risk into the price we pay for such loans. Despite our review process, there can be no assurance that our Manager’s due diligence process will uncover all relevant facts or that any investment will be successful.

If our Manager underestimates the borrower’s credit analysis or originates loans by using an exception to its loan underwriting guidelines, we may experience losses.

Our Manager values our real estate-related loans based on an initial credit analysis and the investment’s expected risk-adjusted return relative to other comparable investment opportunities available to us, taking into account estimated future losses on the loans, and the estimated impact of these losses on expected future cash flows. Our Manager’s loss estimates may not prove accurate, as actual results may vary from estimates. In the event that our Manager underestimates the losses relative to the price we pay for a particular investment, we may experience losses with respect to such investment, which in turn may have a material adverse effect on our results of operations, financial condition and cash flows.

Further, from time to time and in the ordinary course of business, our Manager may make exceptions to our predetermined loan underwriting guidelines. Loans originated with exceptions may result in a higher number of delinquencies and defaults, which could have a material and adverse effect on our results of operations, financial condition and cash flows.

Deficiencies in appraisal quality in the mortgage loan origination process may result in increased principal loss severity.

During the loan underwriting process, appraisals are generally obtained on the collateral underlying each prospective loan. The quality of these appraisals may vary widely in accuracy and consistency. The appraiser may feel pressure from the broker or lender to provide an appraisal in the amount necessary to enable the originator to make the loan, whether or not the value of the property justifies such an appraised value. Inaccurate or inflated appraisals may result in an increase in the severity of losses on the loans, which could have a material and adverse effect on our results of operations, financial condition and cash flows.

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Our Manager utilizes analytical models and data in connection with the valuation of our real estate-related loans and other commercial real estate assets, and any incorrect, misleading or incomplete information used in connection therewith would subject us to potential risks.

As part of the risk management process our Manager uses detailed proprietary models, including loan level non-performing loan models, to evaluate collateral liquidation timelines and price changes by region, along with the impact of different loss mitigation plans. Additionally, our Manager uses information, models and data supplied by third parties. Models and data are used to value potential targeted assets. In the event models and data prove to be incorrect, misleading or incomplete, any decisions made in reliance thereon expose us to potential risks. For example, by relying on incorrect models and data, especially valuation models, our Manager may be induced to buy certain targeted assets at prices that are too high, to sell certain other assets at prices that are too low or to miss favorable opportunities altogether. Similarly, any hedging based on faulty models and data may prove to be unsuccessful. If any of the aforementioned occur, such event could have a material adverse effect on our results of operations, financial condition and cash flows.

Changes in interest rates could adversely affect the demand for our target loans, the value of our loans, CMBS and other real-estate debt or equity assets and the availability and yield on our targeted assets.

We invest in real estate-related loans and other commercial real estate assets, which are subject to changes in interest rates. Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control. Rising interest rates generally reduce the demand for mortgage loans due to the higher cost of borrowing. A reduction in the volume of mortgage loans originated may affect the volume of our targeted assets available to us, which could adversely affect our ability to originate and acquire assets that satisfy our objectives. Rising interest rates may also cause our targeted assets that were issued prior to an interest rate increase to provide yields that are below prevailing market interest rates. If rising interest rates cause us to be unable to originate or acquire a sufficient volume of our targeted assets with a yield that is above our borrowing cost, our ability to satisfy our objectives and to generate income and make distributions may be materially and adversely affected. Conversely, if interest rates decrease, we will be adversely affected to the extent that real estate-related loans are prepaid, because we may not be able to make new loans at the previously higher interest rate.

The relationship between short-term and longer-term interest rates is often referred to as the “yield curve.” Ordinarily, short-term interest rates are lower than longer-term interest rates. If short-term interest rates rise disproportionately relative to longer-term interest rates (a flattening of the yield curve), our borrowing costs may increase more rapidly than the interest income earned on our assets. Because our loans and CMBS assets generally will bear, on average, interest based on longer-term rates than our borrowings, a flattening of the yield curve would tend to decrease our net income and the fair market value of our net assets. Additionally, to the extent cash flows from loans and CMBS assets that return scheduled and unscheduled principal are reinvested, the spread between the yields on the new loans and CMBS assets and available borrowing rates may decline, which would likely decrease our net income. It is also possible that short-term interest rates may exceed longer-term interest rates (a yield curve inversion), in which event our borrowing costs may exceed our interest income and we could incur operating losses.

The values of our loans and CMBS assets may decline without any general increase in interest rates for a number of reasons, such as increases or expected increases in defaults, or increases or expected increases in voluntary prepayments for those loans and CMBS assets that are subject to prepayment risk or widening of credit spreads.

In addition, in a period of rising interest rates, our operating results will depend in large part on the difference between the income from our assets and our financing costs. We anticipate that, in most cases, the income from such assets will respond more slowly to interest rate fluctuations than the cost of our borrowings. Consequently, changes in interest rates, particularly short-term interest rates, may significantly influence our net income. Increases in these rates will tend to decrease our net income, which may have a material adverse effect on our results of operations, financial condition and cash flows.

The expected discontinuance of the London interbank offered rate (“LIBOR”) and transition to alternative reference rates may adversely impact our borrowings and assets.

In July 2017, the U.K. Financial Conduct Authority, which regulates the LIBOR administrator, ICE Benchmark Administration Limited (“IBA”) announced that it would cease to compel banks to participate in setting LIBOR as a benchmark by the end of 2021, which has subsequently been delayed to June 30, 2023. Such announcement indicates that market participants cannot rely on LIBOR being published after June 30, 2023.

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The Alternative Reference Rates Committee, a group of private-market participant convened by the U.S. Federal Reserve Board and the New York Federal Reserve, has recommended Secured Overnight Financing Rate (“SOFR”) as a more robust reference rate alternative to U.S. dollar LIBOR.

Certain of our indebtedness, including the term loan, the repurchase agreement, the mortgage loan payable and the revolving line of credit, as well as certain of our floating rate loan assets, are, and other future financings may be, linked to LIBOR. We are not able to predict when LIBOR will cease to be available; however, we expect that a significant portion of these financing arrangements and loan assets will not have matured, been prepaid or otherwise terminated prior to the time at which the IBA ceases to publish LIBOR. It is not possible to predict all consequences of the IBA’s proposals to cease publishing LIBOR, any related regulatory actions and the expected discontinuance of the use of LIBOR as a reference rate for financial contracts. If such debt or loan assets mature after LIBOR ceases to be published, our counterparties may disagree with us about how to calculate or replace LIBOR. Even when robust fallback language is included, there can be no assurance that the replacement rate plus any spread adjustment will be economically equivalent to LIBOR, which could result in a higher interest rate being paid by us on our borrowings and a lower interest rate being paid to us on such assets. Modifications to any debt, loan assets, interest rate hedging transactions or other contracts to replace LIBOR with an alternative reference rate could result in adverse tax consequences. In addition, any resulting differences in interest rate standards among our assets and our financing arrangements may result in interest rate mismatches between our assets and the borrowings used to fund such assets.

Potential changes, or uncertainty related to such potential changes, may also adversely affect the market for LIBOR-based loans, including our portfolio of LIBOR-indexed, floating-rate loans, or the cost of our borrowings. In addition, changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market for LIBOR-based loans, including the value of the LIBOR-indexed, floating-rate loans in our portfolio, or the cost of our borrowings. There is no guarantee that a transition from LIBOR to an alternative will not result in financial market disruptions, significant increases in benchmark rates, or borrowing costs to borrowers, any of which could have a material adverse effect on our results of operations, financial condition and our cash flows.

New entrants in the market for commercial loan originations and acquisitions could adversely impact our ability to originate and acquire real estate-related loans at attractive risk-adjusted returns.

New entrants in the market for commercial loan originations and acquisitions could adversely impact our ability to execute our investment strategy on terms favorable to us. In originating and acquiring our targeted assets, we may compete with other REITs, numerous regional and community banks, specialty finance companies, savings and loan associations, mortgage bankers, insurance companies, mutual funds, institutional investors, investment banking firms, other lenders and other entities, and we expect that others may be organized in the future. The effect of the existence of additional REITs and other institutions may be increased competition for the available supply of assets suitable for investment by us, which may cause the price for such assets to rise, which may limit our ability to generate desired returns. Additionally, origination of our target loans by our competitors may increase the availability of such loans which may result in a reduction of interest rates on these loans. Some competitors may have a lower cost of funds and access to funding sources that may not be available to us. Many of our competitors are not subject to the operating constraints associated with REIT tax compliance or maintenance of an exclusion or exemption from the 1940 Act. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of real estate-related loans and establish more relationships than us.

We cannot assure you that the competitive pressures we may face will not have a material adverse effect on our results of operations, financial condition and cash flows. Also, as a result of this competition, desirable investments in our targeted assets may be limited in the future and we may not be able to take advantage of attractive investment opportunities from time to time, as we can provide no assurance that we will be able to identify and make investments that are consistent with our investment objectives.

Our loans are dependent on the ability of the commercial property owner to generate net income from operating the property, which may result in the inability of such property owner to repay a loan, as well as the risk of foreclosure.

Our loans may be secured by office, multifamily, student housing, hotel, commercial or warehouse properties and are subject to risks of delinquency, foreclosure and of loss that may be greater than similar risks associated with loans made on the security of single-family residential property. The ability of a borrower to repay a loan secured by an income-producing property typically is dependent primarily upon the successful operation of such property rather than upon the existence of independent income or assets of the borrower. If the net operating income of the property is reduced, the borrower’s ability to

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repay the loan may be impaired. Net operating income of an income-producing property can be adversely affected by, among other things:

•tenant mix;

•success of tenant businesses;

•property management decisions;

•property location, condition and design;

•competition from comparable types of properties;

•changes in national, regional or local economic conditions and/or specific industry segments;

•declines in regional or local real estate values;

•declines in regional or local rental or occupancy rates;

•increases in interest rates, real estate tax rates and other operating expenses;

•costs of remediation and liabilities associated with environmental conditions;

•the potential for uninsured or underinsured property losses;

•changes in governmental laws and regulations, including fiscal policies, zoning ordinances and environmental legislation and the related costs of compliance;

•pandemics or other calamities that may affect tenants’ ability to pay their rent; and

•acts of God, terrorism, social and political unrest, armed conflict, geopolitical events and civil disturbances.

In the event of any default under a mortgage loan held directly by us, we bear a risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the mortgage loan, which could have a material adverse effect on our results of operations, financial condition and cash flows. In the event of the bankruptcy of a mortgage loan borrower, the mortgage loan to such borrower will be deemed to be secured only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the mortgage loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law.

Foreclosure can be an expensive and lengthy process, and foreclosing on certain properties where we directly hold the mortgage loan and the borrower’s default under the mortgage loan is continuing could result in actions that could be costly to our operations, in addition to having a substantial negative effect on our anticipated return on the foreclosed mortgage loan. If property securing or underlying loans become real estate owned as a result of foreclosure, we bear the risk of not being able to sell the property and recovering our investment and of being exposed to the risks attendant to the ownership of real property.

Our loan portfolio may at times be concentrated in certain property types or secured by properties concentrated in a limited number of geographic areas, which increases our exposure to economic downturn with respect to those property types or geographic locations.

We are not required to observe specific diversification criteria. Therefore, our portfolio of assets may, at times, be concentrated in certain property types that are subject to higher risk of foreclosure, or secured by properties concentrated in a limited number of geographic locations.

Our loans are concentrated in California, New York, Georgia, North Carolina and Utah representing approximately 46.4%, 15.7%, 13.2%, 11.0% and 6.9% of our net loan portfolio as of December 31, 2021, respectively. Additionally, we own multi-tenant office building in California. If economic conditions in these or in any other state in which we have a significant concentration of borrowers were to deteriorate, such adverse conditions could have a material and adverse effect on our

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business by reducing demand for new financings, limiting the ability of customers to repay existing loans and impairing the value of our real estate collateral and real estate owned properties.

Further, our loans are concentrated in office, multifamily and hotel property types representing approximately 41.1%, 18.1% and 14.1% of our net loan portfolio as of December 31, 2021, respectively. As a result, a downturn in any particular industry in which we are heavily invested may significantly impact the aggregate returns we realize. If an industry in which we are heavily invested suffers from adverse business or economic conditions (as a result of the COVID-19 pandemic or otherwise), a material portion of our investment could be affected adversely, which, in turn, could adversely affect our results of operations, financial condition and cash flows.

In addition, from time to time, there have been proposals to base property taxes on commercial properties on their current market value, without any limit based on purchase price. In California, pursuant to an existing state law commonly referred to as Proposition 13, properties are reassessed to market value only at the time of change in ownership or completion of construction, and thereafter, annual property reassessments are limited to 2% of previously assessed values. As a result, Proposition 13 generally results in significant below-market assessed values over time. From time to time, including recently, lawmakers and political coalitions have initiated efforts to repeal or amend Proposition 13 to eliminate its application to commercial and industrial properties. If successful, a repeal of Proposition 13 could substantially increase the assessed values and property taxes for our customers in California which in turn could limit their ability to borrow funds.

To the extent that our portfolio is concentrated in any region, or by type of property, downturns relating generally to such region, type of borrower or security may result in defaults on a number of our assets within a short time period, which may reduce our net income, which in turn may have a material adverse effect on our results of operations, financial condition and cash flows.

We expect that a significant portion of the mortgage loans invested in by us may be development mortgage loans on infill land, which are speculative in nature.

We expect that a significant portion of our assets may be mortgage loans for the development of real estate, which will initially be secured by infill land. These types of loans are speculative, because:

•until improvement, the property may not generate separate income for the borrower to make loan payments;

•the completion of planned development may require additional development financing by the borrower, which may not be available; and

•there is no assurance that we will be able to sell unimproved infill land promptly if we are forced to foreclose upon it.

If in fact the land is not developed, the borrower may not be able to refinance the loan and, therefore, may not be able to make the balloon payment when due. If a borrower defaults and we foreclose on the collateral, we may not be able to sell the collateral for the amount owed to us by the borrower. In calculating our loan-to-value ratios for the purpose of determining maximum borrowing capacity, we use the estimated value of the property at the time of completion of the project, which increases the risk that, if we foreclose on the collateral before it is fully developed, we may not be able to sell the collateral for the amount owed to us by the borrower, which in turn may have an adverse effect on our results of operations, financial condition and cash flows.

Loans to small businesses involve a high degree of business and financial risk, which can result in substantial losses that would adversely affect our business, results of operation and financial condition.

Our operations and activities include loans to small, privately owned businesses to purchase real estate used in their operations or by investors seeking to acquire small office, multifamily, student housing, hotel, commercial or warehouse properties. Additionally, such loans are also often accompanied by personal guarantees. Often, there is little or no publicly available information about these businesses. Accordingly, we must rely on our own due diligence to obtain information in connection with our investment decisions. Our borrowers may not meet net income, cash flow and other coverage tests typically imposed by banks. A borrower’s ability to repay its loan may be adversely impacted by numerous factors, including a downturn in its industry or other negative local or more general economic conditions. Deterioration in a borrower’s financial condition and prospects may be accompanied by deterioration in the collateral for the loan. In addition, small businesses typically depend on the management talents and efforts of one person or a small group of people for their success. The loss of services of one or more of these persons could have a material and adverse impact on the operations of the small business. Small companies are typically more vulnerable to customer preferences, market conditions and economic downturns and often need additional

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capital to expand or compete. These factors may have an impact on loans involving such businesses. Loans to small businesses, therefore, involve a high degree of business and financial risk, which can result in substantial losses.

Our investments may include subordinated tranches of CMBS, which are subordinate in right of payment to more senior securities.

Our investments may include subordinated tranches of CMBS, which are subordinated classes of securities in a structure of securities collateralized by a pool of assets consisting primarily of commercial loans and, accordingly, are the first or among the first to bear the loss upon a restructuring or liquidation of the underlying collateral and the last to receive payment of interest and principal. Additionally, estimated fair values of these subordinated interests tend to be more sensitive to changes in economic conditions than more senior securities. As a result, such subordinated interests generally are not actively traded and may not provide holders thereof with liquid investments.

Any credit ratings assigned to our loans and CMBS assets will be subject to ongoing evaluations and revisions and we cannot assure you that those ratings will not be downgraded.

Some of our loan and CMBS assets may be rated by Moody’s Investors Service, Standard & Poor’s, or Fitch Ratings. Any credit ratings on our loans and CMBS assets are subject to ongoing evaluation by credit rating agencies, and we cannot assure you that any such ratings will not be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant. Rating agencies may assign a lower than expected rating or reduce or withdraw, or indicate that they may reduce or withdraw, their ratings of our loans and CMBS assets in the future. In addition, we may originate or acquire assets with no rating or with below investment grade ratings. If the rating agencies take adverse action with respect to the rating of our loans and CMBS assets or if our unrated assets are illiquid, the value of these loans and CMBS assets could significantly decline, which would adversely affect the value of our investment portfolio and could result in losses upon disposition or the failure of borrowers to satisfy their debt service obligations to us.

The mezzanine loans, preferred equity and other subordinated loans in which we invest involve greater risks of loss than senior loans secured by income-producing commercial properties.

We invest in mezzanine loans that take the form of subordinated loans secured by second mortgages on the underlying real property or loans secured by a pledge of the ownership interests of the entity owning the real property. These types of investments involve a higher degree of risk than long-term senior mortgage lending secured by income-producing real property because the investment may become unsecured as a result of foreclosure by the senior lender. In the event of a bankruptcy of the entity providing the pledge of its ownership interests as security, we may not have full recourse to the assets of such entity, or the assets of the entity may not be sufficient to satisfy our mezzanine loan. If a borrower defaults on our mezzanine loan or debt senior to such loan, or in the event of a borrower bankruptcy, our mezzanine loan will be satisfied only after the senior debt is fully satisfied. As a result, we may not recover some or all of our investment. In addition, mezzanine loans may have higher loan-to-value ratios than conventional mortgage loans, resulting in less equity in the real property and increasing the risk of loss of principal.

Our investments in B-notes are generally subject to losses. The B-notes in which we may invest may be subject to additional risks relating to the privately negotiated structure and terms of the transaction, which may result in losses to us.

As part of our whole loan origination platform, we may retain from whole loans we originate or acquire, subordinate interests referred to as B-notes. B-notes are commercial real estate loans secured by a first mortgage on a single large commercial property or group of related properties and subordinated to a senior interest, referred to as an A-note. As a result, if a borrower defaults, there may not be sufficient funds remaining for B-note owners after payment to the A-note owners. In addition, our rights to control the process following a borrower default may be subject to the rights of A-note owners whose interests may not be aligned with ours. B-notes reflect similar credit risks to comparably rated CMBS. However, since each transaction is privately negotiated, B-notes can vary in their structural characteristics and risks. For example, the rights of holders of B-notes to control the process following a borrower default may be limited in certain investments. We cannot predict the terms of each B-note investment. Significant losses related to our B-notes would result in operating losses for us, which in turn may have a material adverse effect on our results of operations, financial condition an cash flows.

Any disruption in the availability and/or functionality of our Manager’s technology infrastructure and systems and any failure or our security measures related to these systems could adversely impact our business.

Our ability to originate and acquire real estate-related loans and manage any related interest rate risks and credit risks is critical to our success and is highly dependent upon the efficient and uninterrupted operation of our computer and

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communications hardware and software systems. For example, we rely on our Manager’s proprietary database to track and maintain all loan performance and servicing activity data for loans in our portfolio. This data is used to manage the portfolio, track loan performance, and develop and execute asset disposition strategies. In addition, this data is used to evaluate and price new investment opportunities. If we lost access to our loan servicing activity data or other important business information due to a network or utility failure, our ability to effectively manage our business could be impaired.

Some of these systems are located at our facility and some are maintained by third-party vendors. Any significant interruption in the availability and functionality of these systems could harm our business. In the event of a systems failure or interruption by our third-party vendors, we will have limited ability to affect the timing and success of systems restoration. If such systems failures or interruptions continue for a prolonged period of time, there could be a material and adverse impact on results of operations, financial condition and cash flows.

In addition, some of our security measures may not effectively prohibit others from obtaining improper access to our information. If a person is able to circumvent our security measures, he or she could destroy or misappropriate valuable information or disrupt our operations. Any security breach could expose us to risks of data loss, litigation and liability and could seriously disrupt our operations and harm our reputation.

Cybersecurity risk and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and/or damage to our business relationships, all of which could have an adverse effect on our results of operations, financial condition and cash flows. results.

A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance cost, litigation and damage to our relationships. As our reliance on technology has increased, so have the risks posed to our information systems both internal and those provided by our Manager, Terra Capital Partners, its affiliates and third-party service providers. With respect to cybersecurity risk oversight, our board of directors and our audit committee receive periodic reports and updates from management on the primary cybersecurity risks facing us and our Manager and the measures our Manager is taking to mitigate such risks. In addition to such periodic reports, our board of directors and our audit committee receive updates from management as to changes to our and our Manager’s and its affiliates’ cybersecurity risk profile or certain newly identified risks. However, these measures, as well as our increased awareness of the nature and extent of a risk of a cyber incident, do not guarantee that our financial results, operations or confidential information will not be negatively impacted by such an incident.

Risks Related to Regulation

The increasing number of proposed U.S. federal, state and local laws may affect certain mortgage-related assets in which we invest and could materially increase our cost of doing business.

Various bankruptcy legislation has been proposed that, among other provisions, could allow judges to modify the terms of residential mortgages in bankruptcy proceedings, could hinder the ability of the servicer to foreclose promptly on defaulted mortgage loans or permit limited assignee liability for certain violations in the mortgage loan origination process, any or all of which could adversely affect our business or result in us being held responsible for violations in the mortgage loan origination process even where we were not the originator of the loan. We do not know what impact this type of legislation, which has been primarily, if not entirely, focused on residential mortgage originations, would have on the commercial loan market. We are unable to predict whether U.S. federal, state or local authorities, or other pertinent bodies, will enact legislation, laws, rules, regulations, handbooks, guidelines or similar provisions that will affect our business or require changes in our practices in the future, and any such changes could have a material adverse effect on our results of operations, financial condition and cash flows.

Failure to obtain or maintain required approvals and/or state licenses necessary to operate our mortgage-related activities may adversely impact our investment strategy.

We may be required to obtain and maintain various approvals and/or licenses from federal or state governmental authorities, government sponsored entities or similar bodies in connection with some or all of our activities. There is no assurance that we can obtain and maintain any or all of the approvals and licenses that we desire or that we will avoid experiencing significant delays in seeking such approvals and licenses. Furthermore, we may be subject to various disclosure

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and other requirements to obtain and maintain these approvals and licenses, and there is no assurance that we will satisfy those requirements. Our failure to obtain or maintain licenses will restrict our options and ability to engage in desired activities, and could subject us to fines, suspensions, terminations and various other adverse actions if it is determined that we have engaged without the requisite approvals or licenses in activities that required an approval or license, which could have a material adverse effect on our results of operations, financial condition and cash flows.

The impact of financial reform legislation and legislation promulgated thereunder on us is uncertain.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) enacted in 2010 instituted a wide range of reforms that will have an impact on all financial institutions. Many of the requirements called for in the Dodd-Frank Act will be implemented over time, most of which will be subject to implementing regulations over the course of several years. Many of these regulations have yet to be promulgated or are only recently promulgated. In February 2017, former President Trump signed an executive order for a broad review of federal regulation of the U.S. financial system by the Secretary of the Treasury, in consultation with the heads of the member agencies of the Financial Stability Oversight Council, a panel comprising top U.S. financial regulators. In May 2018, the Congress passed, and former President Trump signed, the Economic Growth, Regulatory Relief, and Consumer Protection Act (the “EGRRCPA”), which among other things, modified certain provisions of the Dodd-Frank Act related to mortgage lending, consumer protection, regulatory relief for large banks, regulatory relief for community banks and regulatory relief in securities markets. The EGRRCPA relaxed or eliminated so-called “enhanced regulation” of banks falling into certain ranges of asset value and impacts the application of the Volcker Rule and the Basel III guidelines as to certain banks. Specifically, the EGRRCPA relaxed (or eliminated) certain risk-based capital and leverage requirements for community banks with less than $10 billion in assets that maintain a certain “community bank leverage ratio” that bank regulators are directed to develop, but the impact and effect of the foregoing on market liquidity is uncertain. It is possible that Democratic majorities in the House and Senate, with the support of the Biden Administration, will roll back some of the changes made by EGRRCPA to the Dodd-Frank Act, although it is not possible at this time to predict the nature or extent of any amendments.

The Biden Administration, along with the Democratic Congress, is likely to focus in the short-term on additional stimulus measures to address the economic impact of the ongoing COVID-19 pandemic, rather than comprehensive financial services and banking reform. However, in the long-term the Biden Administration and Congress are likely to take a more active approach to banking and financial regulation than the prior Trump Administration, particularly to promote policy goals involving climate change, racial equity, environmental, social, and corporate governance (“ESG”) matters, consumer financial protection and infrastructure.

In addition, the substance of regulatory supervision may be influenced through the appointment of individuals to the Federal Reserve Board and other financial regulatory bodies. Measures focused on deregulation of the U.S. financial services industry may, among other things, decrease the restrictions on banks and other financial institutions and allow them to compete with us for investment opportunities that were previously not available to them. Measures focused on deregulation of the U.S. financial services industry may have the effect of increasing competition for our business. Increased competition from banks and other financial institutions in the credit markets could have the effect of reducing credit spreads, which may adversely affect our revenues.

Given the uncertainty associated with financial reform legislation, including the implementation of the Dodd-Frank Act and any legislative and/or regulatory actions under a Biden Administration and Democratic Congress, the full impact such requirements will have on our business, results of operations or financial condition is unclear. The changes resulting from the Dodd-Frank Act, the EGRRCPA, and other legislative actions may require us to invest significant management attention and resources to evaluate and make necessary changes in order to comply with new statutory and regulatory requirements or address resulting changes in the mortgage loan market. While we cannot predict what effect any changes in the laws or regulations or their interpretations would have on us, these changes could be materially adverse to our business. In addition, failure to comply with any such laws, regulations or principles, or changes thereto, or to adapt to any changes in the marketplace, may have a material adverse effect on our results of operations, financial condition and cash flows.

Accounting rules for certain of our transactions are highly complex and involve significant judgment and assumptions, and changes in such rules, accounting interpretations or our assumptions could adversely impact our ability to timely and accurately prepare our consolidated financial statements.

We are subject to Financial Accounting Standards Board (“FASB”) interpretations that can result in significant accounting changes that could have a material and adverse impact on our results of operations and financial condition. Accounting rules for financial instruments, including the origination, acquisition and sales or securitization of mortgage loans, derivatives, investment consolidations and other aspects of our anticipated operations are highly complex and involve significant judgment

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and assumptions. For example, our estimates and judgments are based on a number of factors, including projected cash flows from the collateral securing our loans, the likelihood of repayment in full at the maturity of a loan, potential for a loan refinancing opportunity in the future and expected market discount rates for varying property types. These complexities could lead to a delay in the preparation of financial information and the delivery of this information to our investors.

Changes in accounting rules, interpretations or our assumptions could also undermine our ability to prepare timely and accurate financial statements, which could result in a lack of investor confidence in our financial information.

We are an “emerging growth company,” and a “smaller reporting company” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies or smaller reporting companies will make an investment in us less attractive to investors. In particular, our independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.

We are an “emerging growth company” as defined in the JOBS Act. We will remain an “emerging growth company” until the earliest to occur of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.07 billion, (ii) the date on which we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the preceding three-year period, and (iv) the end of the year in which the five-year anniversary of the initial public offering of our common stock occurs in the future, if applicable. We may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

Section 404 of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting, and generally requires in the same report a report by our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. Under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until we are no longer an “emerging growth company.”

In addition, we are also a smaller reporting company, as defined in Rule 12b-2 under the Exchange Act. In the event that we are still considered a smaller reporting company at such time as we cease being an emerging growth company, the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an emerging growth company or a smaller reporting company.

Rule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:

(1)had a public float of less than $250 million; or

(2)had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available and either had no public float or a public float of less than $700 million.

Similar to emerging growth companies, smaller reporting companies are able to provide simplified executive compensation disclosures in their filings, and have certain other decreased disclosure obligations in their SEC filings, including, among other things, being required to provide only two years of audited financial statements in annual reports.

To the extent we take advantage of some or all of the reduced reporting requirements applicable to emerging growth companies or smaller reporting companies, an investment in our company may be less attractive to investors.

We may be exposed to environmental liabilities with respect to properties to which we take title, which may in turn decrease the value of the underlying properties.

In the course of our business, we may take title to real estate, and, as a result, we could be subject to environmental liabilities with respect to these properties. In such a circumstance, we may be held liable to a governmental entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination, or we may be required to investigate or clean up hazardous or toxic substances or chemical releases at a property. The costs associated with investigation or remediation activities could be substantial. If we ever become subject to significant environmental liabilities, our business, financial condition, liquidity, and results of operations could be materially and adversely affected. In addition, an owner or operator of real property may become liable under various federal, state and local laws, for the costs of removal of certain hazardous substances released on its property. Such laws often impose

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liability without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances. The presence of hazardous substances may adversely affect an owner’s ability to sell real estate or borrow using real estate as collateral. To the extent that an owner of an underlying property becomes liable for removal costs, the ability of the owner to make debt payments may be reduced, which in turn may adversely affect the value of the relevant mortgage-related assets held by us.

Insurance on the properties underlying our loans may not adequately cover all losses and uninsured losses could materially and adversely affect us.

Generally, our borrowers will be responsible for the costs of insurance coverage for the properties we lease, including for casualty, liability, fire, floods, earthquakes, extended coverage and rental or business interruption loss. However, there are certain risks, such as losses from terrorism, that are not generally insured against, or that are not generally fully insured against, because it is not deemed economically feasible or prudent to do so. In addition, changes in the cost or availability of insurance could expose us to uninsured casualty losses. Under certain circumstances insurance proceeds may not be sufficient to restore our economic position with respect to an affected property, and we could be materially and adversely affected. Furthermore, we do not have any insurance designated to limit any losses that we may incur as a result of known or unknown environmental conditions which are not caused by an insured event.

In addition, certain of the properties underlying our loans may be located in areas that are more susceptible to, and could be significantly affected by, natural disasters that could cause significant damage to the properties. If we or our borrowers experience a loss, due to such natural disasters or other relevant factors, that is uninsured or that exceeds policy limits, we could incur significant costs, which could have a material adverse effect on our results of operations, financial condition and cash flows.

Maintenance of our 1940 Act exclusion imposes limits on our operations.

We are not registered as an investment company under the 1940 Act. If we were obligated to register as an investment company, we would have to comply with a variety of substantive requirements under the 1940 Act that impose, among other things:

•limitations on our capital structure and the use of leverage;

•restrictions on specified investments;

•prohibitions on transactions with affiliates; and

•compliance with reporting, record keeping, and other rules and regulations that would significantly change our operations.

We conduct our operations so that neither we nor our subsidiaries are required to register as an investment company under the 1940 Act. Section 3(a) (1)(A) of the 1940 Act defines an investment company as any issuer that is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the 1940 Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Excluded from the term “investment securities,” among other things, are U.S. government securities and securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exclusion from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the 1940 Act. The value of the “investment securities” held by an issuer must be less than 40% of the value of such issuer’s total assets on an unconsolidated basis (exclusive of U.S. government securities and cash items). In addition, we conduct our operations so that neither we nor our subsidiaries will be considered an investment company under Section 3(a)(1)(A) of the 1940 Act, as neither we nor our subsidiaries are engaged primarily nor do we hold ourselves out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, we are primarily engaged in the non-investment company businesses of our subsidiaries.

We and certain of our subsidiaries may from time to time rely primarily on the exclusion from the definition of an investment company under Section 3(c)(5)(C) of the 1940 Act, or any other exclusions that may be available to us (other than the exclusions under Section 3(c)(1) or Section 3(c)(7)). Section 3(c)(5)(C) of the 1940 Act is available for entities primarily engaged in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate. This

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exclusion generally requires that at least 55% of our portfolio must be comprised of “qualifying real estate” assets and at least 80% of our portfolio must be comprised of “qualifying real estate” assets and “real estate-related” assets (and no more than 20% comprised of miscellaneous assets). For purposes of the Section 3(c)(5)(C) exclusion, we classify our investments based in large measure on no-action letters issued by the staff of the SEC, and other SEC interpretive guidance and, in the absence of SEC guidance, on our view of what constitutes a “qualifying real estate” asset and a “real estate-related” asset. These no-action positions were issued in accordance with factual situations that may be substantially different from the factual situations we may face, and a number of these no-action letters were issued more than 20 years ago. Pursuant to this guidance, and depending on the characteristics of the specific investments, certain mortgage loans, participations in mortgage loans, mortgage-backed securities, mezzanine loans, joint venture investments, preferred equity and the equity securities of other entities may not constitute qualifying real estate assets and therefore our investments in these types of assets may be limited. No assurance can be given that the SEC or its staff will concur with our classification of the assets we hold for purposes of the 3(c)(5)(C) exclusion or any other exclusion or exemption under the 1940 Act. Future revisions to the 1940 Act or further guidance from the SEC or its staff may cause us to lose our exclusion from registration or force us to re-evaluate our portfolio and investment strategy. Such changes may prevent us from operating our business successfully.

In order to maintain an exclusion from registration under the 1940 Act, we may be unable to sell assets that we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional income or loss generating assets that we might not otherwise have acquired or may have to forgo opportunities to acquire assets that we would otherwise want to acquire and would be important to our strategy.

Although we monitor our portfolio periodically and prior to each acquisition and disposition, we may not be able to maintain an exclusion from registration as an investment company. If we were required to register as an investment company, but failed to do so, we would be prohibited from engaging in our business, and legal proceedings could be instituted against us. In addition, our contracts may be unenforceable, and a court could appoint a receiver to take control of us and liquidate our business, all of which could have a material adverse effect on our results of operations, financial condition and cash flows.

Risks Related to Our Management and Our Relationship With Our Manager

We rely entirely on the management team and employees of our Manager for our day-to-day operations.

We have no employees and do not intend to have employees in the future. We rely entirely on the management team and employees of our Manager for our day-to-day operations, and our Manager has significant discretion as to the implementation of our operating policies and strategies. Our success depends substantially on the efforts and abilities of the management team of our Manager, including Messrs. Uppal, Pinkus and Cooperman, and our Manager’s debt finance professionals. The loss of any of such individuals could have a material adverse effect on our results of operations, financial condition and cash flows

We face certain conflicts of interest with respect to our operations and our relationship with our Manager and its affiliates.

We are subject to conflicts of interest arising out of our relationship with our Manager. We may enter into additional transactions with our Manager, its affiliates, or entities managed by our Manager or its affiliates. In particular, we may invest in, or acquire, certain of our investments through joint ventures or co-investments with other affiliates or purchase assets from, sell assets to or arrange financing from or provide financing to other affiliates, or engage in other transactions with entities managed by our Manger or its affiliates. Future joint venture investments could be adversely affected by our lack of sole decision-making

authority, our reliance on our Manager’s and its affiliates’ financial condition and liquidity, and disputes between us and our Manager or its affiliates. Certain of those transactions will be subject to certain regulatory restrictions as a result of the 1940 Act or the conditions of an order granting exemptive relief to our affiliate, Terra Fund 6. There can be no assurance that any procedural protections will be sufficient to assure that these transactions will be made on terms that will be at least as favorable to us as those that would have been obtained in an arm’s-length transaction.

In addition, we will rely on our Manager for our day-to-day operations. Under the Management Agreement, our Manager has and will have a contractual, as opposed to a fiduciary, relationship with us that limits its obligations to us to those specifically set forth in the Management Agreement. Our Manager may be subject to conflicts of interest in making investment decisions on assets on our behalf as opposed to other entities that have similar investment objectives. Our Manager may have different incentives in determining when to sell assets with respect to which it is entitled to fees and compensation and such determinations may not be in our best interest.

Our Manager and its affiliates serve as manager of certain other funds and investment vehicles, all of which have investment objectives that overlap with ours. In addition, future programs may be sponsored by our Manager and its affiliates. As a result, our Manager and its affiliates may face conflicts of interest arising from potential competition with other programs

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for investors and investment opportunities. There may be periods during which one or more programs managed by our Manager or its affiliates will be raising capital and which might compete with us for investment capital. Such conflicts may not be resolved in our favor and our investors will not have the opportunity to evaluate the manner in which these conflicts of interest are resolved before or after making their investment.

Our officers and the officers of our Manager are also officers of other affiliates of our Manager; therefore, our officers and the officers of our Manager will face competing demands based on the allocation of investment opportunities between us and our affiliates.

We rely on our officers and the officers of our Manager, including Messrs. Uppal, Pinkus and Cooperman, and the other debt finance professionals of our Manager to identify suitable investments. Certain other companies managed by our Manager or its affiliates also rely on many of these same professionals. These funds have similar investment objectives as we do. Many investment opportunities that are suitable for us may also be suitable for other affiliates advised by our Manager.

When our officers or the officers of our Manager identify an investment opportunity that may be suitable for us as well as an affiliated entity, they, in their sole discretion, will first evaluate the investment objectives of each program to determine if the opportunity is suitable for each program. If the proposed investment is appropriate for more than one program, our Manager will then evaluate the portfolio of each program, in terms of diversity of geography, underlying property type, tenant concentration and borrower, to determine if the investment is most suitable for one program in order to create portfolio diversification. If such analysis is not determinative, our Manager will allocate the investment to the program with uncommitted funds available for the longest period or, to the extent feasible, prorate the investment between the programs in accordance with uninvested funds. As a result, our officers or the officers of our Manager could direct attractive investment opportunities to other affiliated entities or investors. Such events could result in our acquiring investments that provide less attractive returns, which would have a material adverse effect on our results of operations, financial condition and cash flows.

Our Manager, our officers and the debt finance professionals assembled by our Manager will face competing demands relating to their time and this may cause our operations and our investors’ investments to suffer.

We will rely on our Manager, its officers and on the debt finance professionals that our Manager retains to provide services to us for the day-to-day operation of our business. Messrs. Uppal, Pinkus and Cooperman are executive officers of our Manager as well as certain other funds managed by our Manager or its affiliates. As a result of their interests in other programs, their obligations to other investors and the fact that they engage in and will continue to engage in other business activities on behalf of themselves and others, Messrs. Uppal, Pinkus and Cooperman face conflicts of interest in allocating their time between us and other Terra Capital Partners-sponsored programs and other business activities in which they are involved. Should our Manager devote insufficient time or resources to our business, our returns on our direct or indirect investments, may decline, which in turn could have a material adverse effect on our results of operations, financial condition and cash flows.

The compensation that our Manager receives was not determined on an arm’s-length basis and therefore may not be on the same terms as we could achieve from a third-party.

Our Manager’s compensation for services it provides to us was not determined on an arm’s-length basis. We cannot assure you that a third-party unaffiliated with us would not be able to provide such services to us at a lower price.

The base management fees we pay our Manager may reduce its incentive to devote its time and effort to seeking attractive assets for our portfolio because the fees are payable regardless of our performance.

We pay our Manager base management fees regardless of the performance of our portfolio. Our Manager’s entitlement to the base management fee, which is not based upon performance metrics or goals, might reduce its incentive to devote its time and effort to seeking assets that provide attractive risk-adjusted returns for our portfolio. We would be required to pay the Manager the base management fee in a particular period even if we experienced a net loss or a decline in the value of our portfolio during that period.

We cannot predict the amounts of compensation to be paid to the Manager.

Because the fees that we pay to the Manager are based in part on the level of our business activity, it is not possible to predict the amounts of compensation that we will be required to pay our Manager. In addition, because key employees of our Manager are given broad discretion to determine when to consummate a transaction, we will rely on these key persons to dictate the level of our business activity. Fees paid to our Manager reduce funds available for payment of distributions to our

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stockholders and principal and interest payments on our outstanding indebtedness. Because we cannot predict the amount of fees due our Manager, we cannot predict how precisely such fees will impact such payments.

If our Manager causes us to enter into a transaction with an affiliate, our Manager may face conflicts of interest that would not exist if such transaction had been negotiated at arm’s-length with an independent party.

Our Manager may face conflicts of interests if we enter into transactions with affiliates of our Manager, or entities managed by our Manager or its affiliates. In these circumstances, the persons who serve as our Manager’s management team may have a fiduciary responsibility to both us and the affiliate. Transactions between us and our Manager’s affiliates, including entities managed by our Manager or its affiliates, will not have the benefit of arm’s-length negotiation of the type normally conducted between unrelated parties. This conflict of interest may cause our Manager to sacrifice our best interests in favor of its affiliate or the entity it or its affiliates manages, thereby causing us to enter into a transaction that is not in our best interest and that may negatively impact our performance.

Our Manager and its affiliates have limited prior experience operating a REIT and therefore may have difficulty in successfully and profitably operating our business or complying with regulatory requirements, including REIT provisions of the Code, which may hinder their ability to achieve our objectives or result in loss of our qualification as a REIT.

Prior to the completion of the REIT formation transaction, our Manager and its affiliates had no experience operating a REIT or complying with regulatory requirements, including the REIT provisions of the Code. The REIT rules and regulations are highly technical and complex, and the failure to comply with the income, asset, and other limitations imposed by these rules and regulations could prevent us from qualifying as a REIT or could force us to pay unexpected taxes and penalties. Our Manager and its affiliates have limited experience operating a business in compliance with the numerous technical restrictions and limitations set forth in the Code applicable to REITs or the 1940 Act. We cannot assure you that our Manager or our management team will perform on our behalf as they have in their previous endeavors. The inexperience of our Manager and its affiliates described above may hinder our Manager’s ability to achieve our objectives or result in loss of our qualification as a REIT or payment of taxes and penalties. As a result, we cannot assure you that we have been able to or will continue to be able to successfully operate as a REIT, execute our business strategies or comply with regulatory requirements applicable to REITs.

Risks Related to Financing and Hedging

Our board of directors may change our leverage policy and or investment strategy and guidelines, asset allocation and financing strategy without stockholder consent.

We currently have outstanding indebtedness and expect to deploy moderate amounts of additional leverage as part of our operating strategy. Our governing documents contain no limit on the amount of debt we may incur, and, subject to compliance with financial covenants under our borrowings, including under the term loan, the unsecured notes, the repurchase agreement and the revolving line of credit, we may significantly increase the amount of leverage we utilize at any time without approval of our stockholders. Depending on market conditions, additional borrowings may include credit facilities, senior notes (including both a reopening of the unsecured notes or the issuance of a new series), repurchase agreements, additional first mortgage loans and securitizations. In addition, we may divide the loans we originate into senior and junior tranches and dispose of the more senior tranches as an additional means of providing financing to our business. To the extent that we use leverage to finance our assets, we would expect to have a larger portfolio of loan assets, but our financing costs relating to our borrowings will reduce our net income. We may not be able to meet our financing obligations and, to the extent that we cannot, we risk the loss of some or all of our assets to liquidation or sale to satisfy such obligations. Any reduction in our ability to make principal and interest payments on our debt obligations, including the term loan, the unsecured notes and the revolving line of credit, may have a material adverse effect on our results of operations, financial condition and cash flows.

Our Manager is authorized to follow broad investment guidelines that have been approved by our board of directors. Those investment guidelines, as well as our target assets, investment strategy, financing strategy and hedging policies with respect to investments, originations, acquisitions, growth, operations, indebtedness, capitalization and distributions, may be changed at any time without notice to, or the consent of, our investors. This could result in a loan portfolio with a different risk profile. A change in our investment strategy may increase our exposure to interest rate risk, default risk and real estate market fluctuations. Furthermore, a change in our asset allocation could result in our making investments in asset categories different from those described herein. These changes could have a material adverse effect on our results of operations, financial condition and cash flows.

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We may pursue and not be able to successfully complete securitization transactions, which could limit potential future sources of financing and could inhibit the growth of our business.

We may use additional credit facilities, senior notes (including both a reopening of the unsecured notes or the issuance of a new series), term loans, repurchase agreements, first mortgage loans or other borrowings to finance the origination and/or structuring of real estate-related loans until a sufficient quantity of eligible assets has been accumulated, at which time we may decide to refinance these short-term facilities or repurchase agreements through the securitization market which could include the creation of CMBS, collateralized debt obligations (“CDOs”), or the private placement of loan participations or other long-term financing. If we employ this strategy, we are subject to the risk that we would not be able to obtain, during the period that our short-term financing arrangements are available, a sufficient amount of eligible assets to maximize the efficiency of a CMBS, CDO or private placement issuance. We are also subject to the risk that we are not able to obtain short-term financing arrangements or are not able to renew any short-term financing arrangements after they expire should we find it necessary to extend such short-term financing arrangements to allow more time to obtain the necessary eligible assets for a long-term financing.

The inability to consummate securitizations of our portfolio to finance our real estate-related loans on a long-term basis could require us to seek other forms of potentially less attractive financing or to liquidate assets at an inopportune time or price, which could have a material adverse effect on our results of operations, financial condition and cash flows.

We may be required to repurchase loans or indemnify investors if we breach representations and warranties, which could harm our earnings.

We may, on occasion, consistent with our qualification as a REIT and our desire to avoid being subject to the “prohibited transaction” penalty tax, sell some of our loans in the secondary market or as a part of a securitization of a portfolio of our loans. If we sell loans, we would be required to make customary representations and warranties about such loans to the loan purchaser. Our loan sale agreements may require us to repurchase or substitute loans in the event we breach a representation or warranty given to the loan purchaser. In addition, we may be required to repurchase loans as a result of borrower fraud or in the event of early payment default on a loan. Likewise, we may be required to repurchase or substitute loans if we breach a representation or warranty in connection with our securitizations, if any.

The remedies available to a purchaser of loans are generally broader than those available to us against the originating broker or correspondent. Further, if a purchaser enforces its remedies against us, we may not be able to enforce the remedies we have against the sellers. The repurchased loans typically can only be financed at a steep discount to their repurchase price, if at all. They are also typically sold at a significant discount to the unpaid principal balance (“UPB”). Significant repurchase activity could have a material adverse effect on our results of operations, financial condition and cash flows.

Covenants in our debt agreements may restrict our operating activities and adversely affect our financial condition, operating results and cash flows.

Our debt agreements contain various financial and operating covenants, including, among other things, certain coverage ratios and limitations on our ability to incur secured and unsecured debt. These restrictive covenants and operating restrictions could have a material adverse effect on our operating results, cause us to lose our REIT status, restrict our ability to finance or securitize new originations and acquisitions, force us to liquidate collateral and negatively affect our financial condition and our ability to pay dividends. The breach of any of these covenants, if not cured within any applicable cure period, could result in a default, including a cross-default, and acceleration of certain of our indebtedness. Accelerating repayment and terminating the agreements will require immediate repayment by us of the borrowed funds, which may require us to liquidate assets at a disadvantageous time, causing us to incur further losses and adversely affecting our results of operations and financial condition, which may impair our ability to make principal and interest payments on our debt obligations. Any failure to make payments when due or upon acceleration could result in the foreclosure upon our assets by our lenders.

Our inability to access funding could have a material adverse effect on our results of operations, financial condition and cash flows. We may rely on short-term financing and thus are especially exposed to changes in the availability of financing.

We currently have outstanding indebtedness and expect to use additional borrowings, such as first mortgage financings, credit facilities, senior notes, term loans and repurchase agreements, and other financings, as part of our operating strategy. Our use of financings exposes us to the risk that our lenders may respond to market conditions by making it more difficult for us to renew or replace on a continuous basis our maturing short-term borrowings. If we are not able to renew our then existing short-

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term facilities or arrange for new financing on terms acceptable to us, or if we default on our covenants or are otherwise unable to access funds under these types of financing, we may have to curtail our asset origination activities and/or dispose of assets.

It is possible that the lenders that provide us with financing could experience changes in their ability to advance funds to us, independent of our performance or the performance of our portfolio of assets. Further, if many of our potential lenders are unwilling or unable to provide us with financing, we could be forced to sell our assets at an inopportune time when prices are depressed. In addition, if the regulatory capital requirements imposed on our lenders change, they may be required to significantly increase the cost of the financing that they provide to us. Our lenders also may revise their eligibility requirements for the types of assets they are willing to finance or the terms of such financings, based on, among other factors, the regulatory environment and their management of perceived risk, particularly with respect to assignee liability. Moreover, the amount of financing we receive under our short-term borrowing arrangements will be directly related to the lenders’ valuation of our targeted assets that cover the outstanding borrowings.

The dislocations in the mortgage sector in the financial crisis that began in 2007 have caused many lenders to tighten their lending standards, reduce their lending capacity or exit the market altogether. Further contraction among lenders, insolvency of lenders or other general market disruptions could adversely affect one or more of our potential lenders and could cause one or more of our potential lenders to be unwilling or unable to provide us with financing on attractive terms or at all. This could increase our financing costs and reduce our access to liquidity, which in turn may have a material adverse effect on our results of operations, financial condition and cash flows.

An increase in our borrowing costs relative to the interest we receive on our leveraged assets may have a material adverse effect on our results of operations, financial condition and cash flows.

As our financings mature, we will be required either to enter into new borrowings or to sell certain of our assets. An increase in short-term interest rates at the time that we seek to enter into new borrowings would reduce the spread between the returns on our assets and the cost of our borrowings. This would adversely affect the returns on our assets, which would reduce our net income and, in turn, have a material adverse effect on our results of operations, financial condition and cash flows.

We may enter into hedging transactions that could expose us to contingent liabilities in the future and adversely impact our financial condition.

Subject to maintaining our qualification as a REIT, part of our strategy may involve entering into hedging transactions that could require us to fund cash payments in certain circumstances (such as the early termination of a hedging instrument caused by an event of default or other early termination event). The amount due would be equal to the unrealized loss of the open swap positions with the respective counterparty and could also include other fees and charges, and these economic losses will be reflected in our results of operations. We may also be required to provide margin to our counterparties to collateralize our obligations under hedging agreements. Our ability to fund these obligations will depend on the liquidity of our assets and access to capital at the time. The need to fund these obligations could have a material adverse effect on our results of operations, financial condition and cash flows.

If we attempt to qualify for fair value hedge accounting treatment for any derivative instruments, but we fail to so qualify, we may suffer because losses on the derivatives that we enter into may not be offset by a change in the fair value of the related hedged transaction.

If we attempt to qualify for hedge accounting treatment for any derivative instruments, but we fail to so qualify for a number of reasons, including if we use instruments that do not meet the definition of a derivative (such as short sales), if we fail to satisfy hedge documentation and hedge effectiveness assessment requirements, or if our instruments are not highly effective, we may suffer because losses on any derivatives we hold which may not be offset by a change in the fair value of the related hedged transaction.

Risks Related to Our Organization and Structure

Our rights to take action against our directors and officers are limited.

Our charter limits the liability of our present and former directors and officers to us for money damages to the maximum extent permitted under Maryland law. Under Maryland law, our present and former directors and officers will not have any liability to us for money damages other than liability resulting from:

•actual receipt of an improper benefit or profit in money, property or services; or

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•active and deliberate dishonesty by the director or officer that was established by a final judgment and was material to the cause of action adjudicated.

Our charter authorizes us to indemnify our directors and officers for actions taken by them in those and other capacities to the maximum extent permitted by Maryland law. Our bylaws require us to indemnify each present and former director or officer, and each person who served any predecessor of our company, including the Terra Funds, in a similar capacity, to the maximum extent permitted by Maryland law, in connection with the defense of any proceeding to which he or she is made, or threatened to be made, a party or a witness by reason of his or her service to us or such predecessor. In addition, we may be obligated to pay or reimburse the expenses incurred by such persons in any such proceedings without requiring a preliminary determination of their ultimate entitlement to indemnification.

Rapid changes in the values of our assets may make it more difficult for us to maintain our qualification as a REIT or our exclusion from the 1940 Act.

If the fair market value or income potential of our assets declines as a result of increased interest rates, prepayment rates, general market conditions, government actions or other factors, we may need to increase our real estate assets and income or liquidate our non-qualifying assets to maintain our REIT qualification or our exclusion from the 1940 Act. If the decline in real estate asset values or income occurs quickly, this may be especially difficult to accomplish. We may have to make decisions that we otherwise would not make absent the REIT and 1940 Act considerations.

Our ownership limitations may restrict our change of control or business combination opportunities.

In order for us to qualify as a REIT under the Code, shares of our stock must be owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to be a REIT has been made) or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of the outstanding shares of our stock may be owned, directly or constructively, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year (other than the first year for which an election to be a REIT has been made). To assist us in preserving our REIT qualification, among other purposes, our charter generally prohibits any person from directly or indirectly owning more than 9.8% by value or number of shares, whichever is more restrictive, of the outstanding shares of our common stock, the outstanding shares of any class or series of our preferred stock or the aggregate outstanding shares of all classes and series of our capital stock. These ownership limits could have the effect of discouraging a takeover or other transaction.

Risks Related to Our Qualification as a REIT

Our failure to qualify or remain qualified as a REIT would subject us to U.S. federal income tax and applicable state and local taxes, which could have a material adverse effect on our results of operations, financial condition and cash flows.

We believe that we have been organized and operated in a manner that has enabled us to qualify as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2016, and we intend to continue to operate in a manner that will allow us to continue to so qualify. So long as we qualify as a REIT, we generally are not subject to U.S. federal income tax on our net taxable income to the extent that we annually distribute all of our net taxable income to our stockholders. We have not requested, and do not intend to request a ruling from the IRS that we qualify as a REIT. The U.S. federal income tax laws governing REITs are complex, and judicial and administrative interpretations of the U.S. federal income tax laws governing REIT qualification are limited.

To qualify as a REIT, we must meet, on an ongoing basis, various tests regarding the nature and diversification of our assets and our income, the ownership of our outstanding shares and the amount of our distributions. Our compliance with the REIT income and quarterly asset requirements also depends upon our ability to manage successfully the composition of our income and assets on an ongoing basis. Our ability to satisfy these asset tests depends upon our analysis of the characterization of our assets for U.S. federal income tax purposes and fair market values of our assets. The fair market values of certain of our assets are not susceptible to a precise determination, and we will generally not obtain independent appraisals of such assets. Furthermore, new tax legislation, administrative guidance or court decisions, in each instance potentially with retroactive effect, could make it difficult or impossible for us to qualify as a REIT. Thus, while we believe that we have been organized and operated and intend to continue to operate so that we will qualify as a REIT, given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations and the possibility of future changes in our circumstances, no assurance can be given that we have qualified or will qualify as a REIT for any particular year.

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If we fail to qualify as a REIT in any taxable year, and we do not qualify for certain statutory relief, we would be required to pay U.S. federal income tax, including applicable state and local taxes, on our taxable income at regular corporate rates, and distributions to our stockholders would not be deductible by us in determining our taxable income. In such a case, we might need to borrow money, sell assets, or reduce or even cease making principal and interest payments on our outstanding indebtedness in order to pay our taxes. Our payment of income tax would reduce significantly the amount of operating cash flow available for principal and interest payments on our indebtedness and distributions to our stockholders. In addition, unless we were eligible for certain statutory relief provisions, we could not re-elect to be taxed as a REIT until the fifth calendar year following the year in which we failed to qualify.

REIT distribution requirements could adversely affect our ability to execute our business plan and may require us to incur debt or sell assets to make such distributions.

In order to qualify as a REIT, we must distribute to our stockholders, each calendar year, at least 90% of our REIT taxable income (including certain items of non-cash income), determined without regard to the deduction for dividends paid and excluding net capital gain. To the extent that we satisfy the 90% distribution requirement, but distribute less than 100% of our taxable income, we will be subject to U.S. federal corporate income tax on our undistributed income. In addition, we will incur a 4% nondeductible excise tax on the amount, if any, by which our distributions in any calendar year are less than a minimum amount specified under U.S. federal income tax laws. We intend to distribute our taxable income to our stockholders in a manner intended to satisfy the 90% distribution requirement and to avoid both corporate income tax and the 4% nondeductible excise tax.

Differences in timing between our recognition of taxable income and the actual receipt of cash may occur. For example, we may be required to accrue income from mortgage loans before we receive any payments of interest or principal on such assets. We generally are required to recognize certain amounts in income no later than the time such amounts are reflected on our financial statements. The application of this rule may require the accrual of income with respect to our loans earlier than would be the case under the otherwise applicable tax rules. Also, in certain circumstances our ability to deduct interest expenses for U.S. federal income tax purposes may be limited. As a result of the foregoing, we may generate less cash flow than taxable income in a particular year and find it difficult or impossible to meet the REIT distribution requirements in certain circumstances. In particular, where we experience differences in timing between the recognition of taxable income and the actual receipt of cash, the requirement to distribute a substantial portion of our taxable income could cause us to: (i) sell assets in adverse market conditions, (ii) borrow on unfavorable terms, (iii) distribute amounts that would otherwise be invested in future acquisitions, capital expenditures or repayment of debt, (iv) make a taxable distribution of our shares as part of a distribution in which stockholders may elect to receive shares or (subject to a limit measured as a percentage of the total distribution) cash or (v) use cash reserves, in order to comply with the REIT distribution requirements and to avoid U.S. federal corporate income tax and the 4% nondeductible excise tax. Thus, compliance with the REIT distribution requirements may hinder our ability to grow, which could have a material adverse effect on our results of operations, financial condition and cash flows.

Even if we qualify as a REIT, we may face other tax liabilities that reduce our cash flow.

Even if we qualify for taxation as a REIT, we may be subject to certain U.S. federal, state and local taxes on our income and assets, including taxes on any undistributed income, tax on income from certain activities conducted as a result of a foreclosure, and state or local income, property and transfer taxes, such as mortgage recording taxes. In addition, we could, in certain circumstances, be required to pay an excise or penalty tax (which could be significant in amount) in order to utilize one or more relief provisions under the Code to maintain our qualification as a REIT. Any of these taxes would reduce cash available for principal and interest payments on our outstanding indebtedness or distributions to our stockholders. In addition, we will be subject to a 100% tax on gains derived from the disposition of dealer property or inventory. In order to meet the REIT qualification requirements, we may hold some of our assets or engage in certain activities that would otherwise be nonqualifying for REIT purposes through a TRS or other subsidiary corporation that will be subject to corporate-level income tax at regular rates. In addition, although the Merger was intended to be treated as a tax-free reorganization for U.S. federal income tax purposes, if the Merger is determined not to have qualified for such tax-free treatment, or if Terra Property Trust 2 is determined to have failed to qualify as a REIT, we could be subject to additional tax liabilities. In addition, we would inherit any liability with respect to unpaid taxes of Terra Property Trust 2 for any periods prior to the Merger for which Terra Property Trust 2 did not qualify as a REIT. Any resulting taxes would decrease the cash available for distributions to our stockholders.

Complying with the REIT requirements may force us to liquidate or forego otherwise attractive investments.

In order to qualify as a REIT, we annually must satisfy two gross income requirements. First, at least 75% of our gross income for each taxable year, excluding gross income from prohibited transactions and certain hedging and foreign currency

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transactions, must be derived from investments relating to real property or mortgages on real property, including interest income derived from mortgage loans secured by real property (including certain types of qualified mezzanine loans and mortgage-backed securities), “rents from real property,” dividends received from and gain from the disposition of shares of other REITs, and gains from the sale of real estate assets, as well as income from certain kinds of qualified temporary investments. Second, at least 95% of our gross income in each taxable year, excluding gross income from prohibited transactions and certain hedging and foreign currency transactions, must be derived from some combination of income that qualifies under the 75% income test described above, as well as other dividends, interest, and gain from the sale or disposition of stock or securities, which need not have any relation to real property. We may receive various fees in connection with our operations. The fees generally will be qualifying income for purposes of both the 75% and 95% gross income tests if they are received in consideration for entering into an agreement to make a loan secured by real property and the fees are not determined by income or profits. In addition, we also treat any origination fees we receive as a reduction in the principal balance of our loans, which we accrue over the life of the relevant loan under the original issue discount rules, discussed below. We treat any exit fees and other fees representing charges for the use or forbearance of money as additional interest. Other fees which are considered compensation for services are not qualifying income for purposes of either the 75% or 95% gross income test.

Further, at the end of each calendar quarter, at least 75% of the value of our total assets must consist of cash, cash items, government securities, shares in other REITs and other qualifying real estate assets, including certain mortgage loans, mezzanine loans and certain mortgage-backed securities. The remainder of our investment in securities (other than government securities, TRS securities and securities that are qualifying real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our total assets (other than government securities, TRS securities and securities that are qualifying real estate assets) can consist of the securities of any one issuer, no more than 20% of the value of our total assets can be represented by securities of one or more TRSs, and no more than 25% of the value of our assets can consist of debt instruments issued by publicly offered REITs that are not otherwise secured by real property. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences.

As a result, we may be required to liquidate from our portfolio, or contribute to a TRS, otherwise attractive investments, and may be unable to pursue investments that would be otherwise advantageous to us in order to satisfy the source of income or asset diversification requirements for qualifying as a REIT. Thus, compliance with the REIT requirements may hinder our ability to make, and, in certain cases, maintain ownership of certain attractive investments. These actions could have the effect of reducing our income, which could have a material adverse effect on our results of operations, financial condition and cash flows.

Our preferred equity and mezzanine loan investments may fail to qualify as real estate assets for purposes of the REIT gross income and asset tests, which could jeopardize our ability to qualify as a REIT.

The IRS has issued Revenue Procedure 2003-65, which provides a safe harbor pursuant to which a mezzanine loan that is secured by interests in a partnership or other pass-through entity will be treated by the IRS as a real estate asset for purposes of the REIT assets tests, and interest derived from such a loan will be treated as qualifying mortgage interest for purposes of the REIT 75% and 95% income tests. Although the Revenue Procedure provides a safe harbor on which taxpayers may rely, it does not prescribe rules of substantive tax law. We own, and may acquire in the future, certain mezzanine loans and preferred equity investments (which we treat as mezzanine loans for U.S. federal income tax purposes) that do not satisfy all of the requirements for reliance on the safe harbor set forth in the Revenue Procedure. Consequently, there can be no assurance that the IRS will not successfully challenge the tax treatment of such mezzanine loans or preferred equity investments as qualifying real estate assets. To the extent that such mezzanine loans or preferred equity investments do not qualify as real estate assets, the interest income from such mezzanine loans or preferred equity investments would be qualifying income for the REIT 95% gross income test, but not for the REIT 75% gross income test, and such mezzanine loans or preferred equity investments would not be qualifying assets for the REIT 75% asset test and would be subject to the REIT 5% and 10% asset tests, which could jeopardize our ability to qualify as a REIT.

The IRS may successfully challenge the treatment of our preferred equity and mezzanine loan investments as debt for U.S. federal income tax purposes.

We invest in certain real estate-related investments, including mezzanine loans, first mortgage loans, and preferred equity investments. There is limited case law and administrative guidance addressing whether certain preferred equity investments or mezzanine loans will be treated as equity or debt for U.S. federal income tax purposes. Our Manager received an opinion of prior tax counsel regarding the treatment of one of our fixed return preferred equity investments and future similarly structured

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investments as debt for U.S. federal income tax purposes. We treat preferred equity investments which we currently hold as debt for U.S. federal income tax purposes and as mezzanine loans that qualify as real estate assets, as discussed above. No private letter rulings have been obtained on the characterization of these investments for U.S. federal income tax purposes and an opinion of counsel is not binding on the IRS; therefore, no assurance can be given that the IRS will not successfully challenge the treatment of such preferred equity investments as debt and as qualifying real estate assets. If a preferred equity investment or mezzanine loan owned by us was treated as equity for U.S. federal income tax purposes, we would be treated as owning a proportionate share of the assets and earning a proportionate share of the gross income of the partnership or limited liability company that issued the preferred equity interest. Certain of these partnerships and limited liability companies are engaged in activities that could cause us to be considered as earning significant nonqualifying income, which would likely cause us to fail to qualify as a REIT or pay a significant penalty tax to maintain our REIT qualification.

The failure of assets subject to repurchase agreements to qualify as real estate assets could adversely affect our ability to qualify as a REIT.

We have entered into, and may in the future enter into additional, financing arrangements that are structured as sale and repurchase agreements pursuant to which we nominally sell certain of our assets to a counterparty and simultaneously enter into an agreement to repurchase such assets at a later date in exchange for a purchase price. Economically, these agreements are financings that are secured by the assets sold pursuant thereto. We believe that we will be treated for REIT asset and income test purposes as the owner of the assets that are the subject of such sale and repurchase agreements notwithstanding that such agreements may transfer record ownership of the assets to the counterparty during the term of the agreement. It is possible, however, that the IRS could assert that we are not the owner of the assets during the term of the sale and repurchase agreement, in which case we could fail to qualify as a REIT.

We may be required to report taxable income from certain investments in excess of the economic income we ultimately realize from them.

We may acquire or originate loans that will be treated as having “original issue discount” for U.S. federal income tax purposes because interest on such securities will not be payable currently, but rather will be added to the outstanding loan balance as it accrues. We will be required to accrue such interest income based on a constant yield method notwithstanding the fact that such interest income is not yet payable, and we will therefore be taxed based on the assumption that all future projected interest payments due on such securities will be made. If such securities turn out not to be fully collectible, an offsetting loss deduction will become available only in the later year that uncollectability is provable. While we would in general ultimately have an offsetting loss deduction available to us when such interest was determined to be uncollectible, the utility of that deduction could depend on our having taxable income in that later year or thereafter.

Complying with REIT requirements may limit our ability to hedge effectively.

The REIT provisions of the Code may limit our ability to hedge our assets and operations. Under these provisions, any income that we generate from transactions intended to hedge our interest rate and currency risks will generally be excluded from gross income for purposes of the 75% and 95% gross income tests if (i) the instrument (A) hedges interest rate risk or foreign currency exposure on liabilities used to carry or acquire real estate assets, (B) hedges risk of currency fluctuations with respect to any item of income or gain that would be qualifying income under the 75% or 95% gross income tests or (C) hedges an instrument described in clause (A) or (B) for a period following the extinguishment of the liability or the disposition of the asset that was previously hedged by the hedged instrument, and (ii) such instrument is properly identified under the applicable Treasury Regulations.

As a result of these rules, we may have to limit our use of hedging techniques that might otherwise be advantageous or implement those hedges through a TRS. This could increase the cost of our hedging activities because a TRS would be subject to corporate tax on its income. Moreover, the limits on our use of hedging techniques could expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in a TRS would generally not provide any tax benefit to us since such losses may not be used to offset our taxable income, although such losses may be carried forward to offset future taxable income of the TRS.

The tax on prohibited transactions will limit our ability to engage in transactions, including sales of participation interests in loans and securitizations, that would be treated as sales of dealer property for U.S. federal income tax purposes.

A REIT’s net income from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, but including loans, held as inventory or primarily for sale to customers in the ordinary course of business. We occasionally sell participation interests in loans which we have originated;

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however, we do not expect to engage in a significant number of such sales or that such sales will generate significant gains, if any. To the extent that we were to sell loans or participations therein in a manner that we believe could expose us to the prohibited transaction tax, we intend to conduct such activities through a TRS. In addition, we may decide to pursue securitization transactions to finance our real estate-related loans. To the extent that the securitization transactions were structured in a manner that we believe could expose us to the prohibited transactions tax, we intend to conduct such activities through a TRS.

A failure to comply with the limits on our ownership of and relationship with our TRSs, if any, would jeopardize our REIT qualification and may result in the application of a 100% excise tax.

Although our use of TRSs may be able to partially mitigate the impact of meeting the requirements necessary to maintain our qualification as a REIT, our ownership of and relationship with any TRSs is subject to limitations, and a failure to comply with the limits would jeopardize our REIT qualification and our transactions with such TRSs may result in the application of a 100% excise tax if such transactions are not conducted on arm’s-length terms.

A REIT may own up to 100% of the stock of one or more TRSs. Subject to certain exceptions, a TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT. Both the subsidiary corporation and the REIT must jointly elect to treat the subsidiary corporation as a TRS. Any TRS that we form will pay U.S. federal, state and local income tax on its taxable income, and its after-tax net income will be available for distribution to us but is not required to be distributed to us.

Overall, no more than 20% of the value of a REIT’s total assets may consist of stock or securities of one or more TRSs. We intend to limit the aggregate value of the stock and securities of our TRSs, if any, to less than 20% of the value of our total assets (including such TRS stock and securities). Furthermore, we will monitor the value of our respective investments in our TRSs for the purpose of ensuring compliance with TRS ownership limitations.

In addition, the TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. To the extent we form a TRS, we will scrutinize all of our transactions with such TRS to ensure that they are entered into on arm’s length terms to avoid incurring the 100% excise tax.

We may engage in transactions with a TRS, in which case we intend to conduct our affairs so that we will not be subject to the 100% excise tax with respect to transactions with such TRS and so that we will comply with all other requirements applicable to our ownership of TRSs. There can be no assurance, however, that we will be able to comply with the 20% limitation discussed above or to avoid application of the 100% excise tax discussed above.

Legislative, regulatory or administrative changes could adversely affect us.

The U.S. federal income tax laws and regulations governing REITs and their investors, as well as the administrative interpretations of those laws and regulations, are constantly under review and may be changed at any time, possibly with retroactive effect. No assurance can be given as to whether, when, or in what form, the U.S. federal income tax laws applicable to us and our investors may be enacted. Changes to the U.S. federal income tax laws and interpretations of U.S. federal tax laws could adversely affect an investment in us.

Prospective investors are urged to consult with their tax advisors regarding the potential effects of legislative, regulatory or administrative developments on an investment in our company.

Your investment has various U.S. federal tax risks.

An investment in us involves complex U.S. federal, state and local income tax considerations that will differ for each investor. Prospective investors should consult with their tax advisors regarding the U.S. federal, state, local and foreign income and other tax consequences applicable to an investment in us.

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General Risk Factors

The effects of the ongoing COVID-19 pandemic, as well as any future pandemics or similar events, and the actions taken in response thereto, may adversely affect our investments and operations.

In December 2019, a COVID-19 outbreak was reported in China, and, in March 2020, the World Health Organization declared it a global pandemic. The ongoing COVID-19 pandemic has severely disrupted global economic activity and financial markets, which could worsen. The global impact of the outbreak has continued to rapidly evolve and many countries, including the United States, have reacted by instituting quarantines, mandating business and school closures and restricting travel. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of the COVID-19 pandemic. Nevertheless, the COVID-19 pandemic presents material uncertainty and risk with respect to our performance and financial results.

As a result of a significant portion of our investments being in preferred equity of entities that own, mezzanine loans and first mortgages secured by office, multifamily and hospitality properties located in the United States, the ongoing COVID-19 pandemic will impact our investments and operating results to the extent that it reduces occupancy, increases the cost of operation or results in limited hours or necessitates the closure of such properties. The borrowers under the first mortgages, mezzanine loans or preferred equity in which we invest may fail to make timely and required payments under the terms of such instruments. In addition, quarantines, states of emergencies and other measures taken to curb the spread of the COVID-19 pandemic may negatively impact the ability of such properties to continue to obtain necessary goods and services or provide adequate staffing, which may also adversely affect our investments and operating results.

The world-wide economic downturn resulting from the COVID-19 pandemic could negatively impact our investments and operations, as well as our ability to make distributions to our stockholders and principal and interest payments on our indebtedness. The extent to which the COVID-19 pandemic impacts our investments and operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the future rate of occurrence or mutation of COVID-19, continuation of or changes in governmental responses to the ongoing COVID-19 pandemic, and the effectiveness of responsive actions taken in the United States and other countries to contain and manage the disease. Although the U.S. Food and Drug Administration has approved certain therapies and three vaccines for emergency use and distribution to certain groups of individuals as of the date of this report, the rollout of vaccine distribution has encountered significant delays, and there remain uncertainties as to the amount of vaccine available for distribution, the logistics of implementing a national vaccine program, and the overall efficacy of the vaccines once widely administered, especially as new strains of COVID-19 have been discovered. In addition, the level of resistance that new strains of COVID-19 have to the existing vaccines, if any, and the overall percentage of the population able and willing to receive the vaccination, remains unknown. Until such therapies and vaccines are widely available and effective, the pandemic and public and private responses to the pandemic may lead to deterioration of economic conditions, an economic downturn or a recession at a global scale, which could materially affect our performance, financial condition, results of operations and cash flows. Any other pandemics or similar events in the future could also similarly have a material adverse effect on our investments and operations, as well as our ability to make distributions to our stockholders and principal and interest payments on our indebtedness.

Future recessions, downturns, disruptions or instability could have a materially adverse effect on our results of operations, financial condition and cash flows.

From time to time, the global capital markets may experience periods of disruption and instability, which could cause disruptions in liquidity in the debt capital markets, significant write-offs in the financial services sector, the re-pricing of credit risk in the broadly syndicated credit market and the failure of major financial institutions. Despite actions of U.S. and foreign governments, these events could contribute to worsening general economic conditions that materially and adversely impact the broader financial and credit markets and reduce the availability of debt and equity capital for the market as a whole and financial services firms in particular.

Deterioration of economic and market conditions in the future could negatively impact credit spreads as well as our ability to obtain financing, particularly from the debt markets, which in turn may have a material adverse effect on our results of operations, financial condition and cash flows.

Returns on our real estate-related loans may be limited by regulations.

Our loan investments may be subject to regulation by federal, state and local authorities and subject to various laws and judicial and administrative decisions. We may determine not to make or invest in real estate-related loans in any jurisdiction in

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which we believe we have not complied in all material respects with applicable requirements, which reduce the amount of income we would otherwise receive.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our administrative and principal executive offices are located at 550 Fifth Avenue, 6th Floor, New York, New York 10036. We believe that our office facilities are suitable and adequate for our business as it is presently conducted.

Item 3. Legal Proceedings.

Neither we nor our Manager is currently subject to any material legal proceedings, nor, to our knowledge, are material legal proceedings threatened against us or our Manager. From time to time, we and individuals employed by our Manager or its affiliates may be a party to certain legal proceedings in the ordinary course of business. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

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

Market Information

    There is no established trading market for our shares of common stock. As of March 11, 2022, we had 19,487,460 shares of common stock outstanding held by two investors. As of March 11, 2022, there were no outstanding options, warrants to purchase our common stock or securities convertible into our shares of common stock.

Sales of Unregistered Equity Securities

There were no sales of unregistered equity securities during the year ended December 31, 2021.

Issuer Purchases of Equity Securities

There were no issuer purchases of equity securities during the year ended December 31, 2021.

Item 6. [Reserved].

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

The information contained in this section should be read in conjunction with our audited consolidated financial statements and related notes thereto and other financial information included elsewhere in this annual report on Form 10-K.

Overview

    We are a real estate credit focused company that originates, structures, funds and manages commercial real estate credit investments, including mezzanine loans, first mortgage loans, subordinated mortgage loans and preferred equity investments throughout the United States, which we collectively refer to as our targeted assets. Our loans finance the acquisition, construction, development or redevelopment of quality commercial real estate in the United States. We focus on the origination of middle market loans in the approximately $10 million to $50 million range, to finance properties primarily in primary and secondary markets. We believe loans in this size range are subject to less competition, offer higher risk adjusted returns than larger loans with similar risk metrics and facilitate portfolio diversification. Our investment objective is to provide attractive risk-adjusted returns to our stockholders, primarily through regular distributions. There can be no assurances that we will be successful in meeting our investment objective.

    As of December 31, 2021, we held a net loan portfolio (gross loans less obligations under participation agreements and secured borrowing) comprised of 21 loans in nine states with an aggregate net principal balance of $403.6 million, a weighted average coupon rate of 7.4%, a weighted average loan-to-value ratio of 74.1% and a weighted average remaining term to maturity of 1.7 years.

    Each of our loans was originated by Terra Capital Partners or its affiliates. Our portfolio is diversified based on location of the underlying properties, loan structure and property type. As of December 31, 2021, our portfolio included underlying properties located in 21 markets, across nine states and includes property types such as multifamily housing, hotels, student housing, commercial offices, medical offices, mixed-use and industrial properties. The profile of these properties ranges from stabilized and value-added properties to pre-development and construction. Our loans are structured across mezzanine debt, first mortgages, preferred equity investments and credit facilities.

    We were incorporated under the general corporation laws of the State of Maryland on December 31, 2015. Through December 31, 2015, our business was conducted through a series of predecessor private partnerships. At the beginning of 2016, we completed the merger of these private partnerships into a single entity as part of our plan to reorganize our business as a REIT for federal income tax purposes. Following the REIT formation transaction, Terra Fund 5 contributed the consolidated portfolio of net assets of the Terra Funds to our company in exchange for all of the shares of our common stock.

    On March 1, 2020, Terra Property Trust 2 merged with and into our company, and we continued as the surviving corporation. In connection with the Merger, we issued 2,116,785.76 shares of our common stock to Terra Fund 7, the sole stockholder of Terra Property Trust 2, in exchange for the settlement of $17.7 million of participation interests in loans held by us, cash of $16.9 million and other working capital. In addition, on March 2, 2020, we issued 2,457,684.59 shares of our common stock to Terra Offshore REIT in exchange for the settlement of $32.1 million of participation interests in loans also held by us, $8.6 million in cash and other net working capital. The shares of common stock were issued in private placements in reliance on Section 4(a)(2) under the Securities Act, and the rules and regulations promulgated thereunder. We consummated these transactions with the objective of increasing the size and scale of our loan portfolio, further strengthening our balance sheet and positioning us for future growth. On April 29, 2020, we repurchased the 212,691 shares of common stock we had previously sold to Terra Offshore REIT on September 30, 2019. As of December 31, 2021, Terra JV held 87.4% of the issued and outstanding shares of our common stock with the remainder held by Terra Offshore REIT, and Terra Fund 5 and Terra Fund 7 owned an 87.6% and 12.4% interest, respectively, in Terra JV.

As previously disclosed, we continue to explore alternative liquidity transactions on an opportunistic basis to maximize stockholder value. Examples of the alternative liquidity transactions that, depending on market conditions, may be available to us include a listing of our shares of common stock on a national securities exchange, adoption of a share repurchase plan, a liquidation of our assets, a sale of our company or a strategic business combination, in each case, which may include the in-kind distribution of our shares of common stock indirectly owned by certain Terra Funds to the ultimate investors in the Terra Funds. We may pursue such a liquidity transaction as early as 2022, but we cannot provide any assurance that any alternative liquidity transaction will be available to us or, if available, that we will pursue or be successful in completing any such alternative liquidity transaction.

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We have elected to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2016. So long as we qualify as a REIT, we generally are not subject to U.S. federal income tax on our net taxable income to the extent that we annually distribute all of our net taxable income to our stockholders.

Recent Developments

    The COVID-19 pandemic has evolved from its emergence in early 2020, so has its global impact. Many countries have re-instituted, or strongly encouraged, varying levels of quarantines and restrictions on travel and in some cases have at times limited operations of certain businesses and taken other restrictive measures designed to help slow the spread of COVID-19 and its variants. Governments and businesses have also instituted vaccine mandates and testing requirements for employees. While vaccine availability and uptake has increased, the longer-term macro-economic effects on global supply chains, inflation, labor shortages and wage increases continue to impact many industries, including the collateral underlying certain of our loans. Moreover, with the potential for new strains of COVID-19 to emerge, governments and businesses may re-impose aggressive measures to help slow its spread in the future. For this reason, among others, as the COVID-19 pandemic continues, the potential global impacts are uncertain and difficult to assess.

Portfolio Summary

The following tables provide a summary of our net loan portfolio as of December 31, 2021 and 2020:

	December 31, 2021
	Fixed Rate			Floating Rate (1)(2)(3)			Total Gross Loans			Obligations under Participation Agreements and Secured Borrowing			Total Net Loans
Number of loans	6			15			21			4			21
Principal balance	$	74,880,728		$	405,270,423		$	480,151,151		$	76,569,398		$	403,581,753
Amortized cost	75,520,212			394,153,102			469,673,314			76,818,156			392,855,158
Fair value	75,449,410			391,752,209			467,201,619			75,900,089			391,301,530
Weighted average coupon rate	12.39		%	7.01		%	7.85		%	10.40		%	7.37		%
Weighted-average remaining term (years)	1.93			1.45			1.53			0.82			1.66

	December 31, 2020
	Fixed Rate			Floating Rate (1)(2)(3)			Total Gross Loans			Obligations under Participation Agreements and Secured Borrowing			Total Net Loans
Number of loans	6			14			20			8			20
Principal balance	$	56,335,792		$	367,838,966		$	424,174,758		$	89,548,151		$	334,626,607
Amortized cost	56,464,310			365,816,205			422,280,515			89,769,560			332,510,955
Fair value	56,284,334			363,122,860			419,407,194			87,730,239			331,676,955
Weighted average coupon rate	12.17		%	7.95		%	8.51		%	10.16		%	8.07		%
Weighted-average remaining term (years)	1.78			1.44			1.48			1.08			1.59

_______________

(1)These loans pay a coupon rate of LIBOR plus a fixed spread. Coupon rate shown was determined using LIBOR of 0.10% and 0.14% as of December 31, 2021 and 2020.

(2)As of December 31, 2021 and 2020, amounts included $163.1 million and $184.2 million of senior mortgages used as collateral for $93.8 million and $107.6 million of borrowings under a term loan, respectively. As of December 31, 2021, amounts also included $60.1 million of senior mortgages used as collateral for $38.6 million of borrowings under a revolving line of credit and $67.4 million of senior mortgages used as collateral for $44.6 million of borrowings under a repurchase agreement. Borrowings under the term loan bear interest at an annual rate of LIBOR plus 4.25% with a LIBOR floor of 1.00%. Borrowings under the revolving line of credit bear interest at a minimum rate of 4.0%. Borrowings under the repurchase agreement bears interest at an annual rate of LIBOR plus an applicable spread which ranges from 1.60% to 1.85%.

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(3)As of December 31, 2021 and 2020, thirteen and twelve of these loans, respectively, are subject to a LIBOR floor.

    In addition to our net loan portfolio, as of December 31, 2021 and 2020, we owned 4.9 acres of adjacent land acquired pursuant to a deed in lieu of foreclosure and a multi-tenant office building acquired pursuant to a foreclosure. The land and building and related lease intangible assets and liabilities had a net carrying value of $56.1 million and $62.9 million as of December 31, 2021 and 2020, respectively. The mortgage loan payable encumbering the office building had an outstanding principal amount of $32.0 million and $44.0 million as of December 31, 2021 and 2020, respectively.

Additionally, as of December 31, 2021 and 2020, we owned 50.0% and 90.3%, respectively, of equity interest in a limited partnership that invests primarily in performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets. During 2021, we purchased equity interests in two joint ventures. As of December 31, 2021 and 2020, these equity interests had total carrying value of $69.7 million and $36.3 million, respectively.

Portfolio Investment Activity

For the years ended December 31, 2021 and 2020, we invested $117.3 million and $48.2 million in new and add-on investments and had $85.1 million and $31.3 million of repayments, resulting in net investments of $32.5 million and $16.9 million, respectively. Amounts are net of obligations under participation agreements, secured borrowing, borrowings under the master repurchase agreement, the term loan, the repurchase agreement and the revolving line of credit.

Net Loan Portfolio Information

    The tables below set forth the types of loans in our loan portfolio, as well as the property type and geographic location of the properties securing these loans, on a net loan basis, which represents our proportionate share of the loans, based on our economic ownership of these loans.

	December 31, 2021						December 31, 2020
Loan Structure	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
First mortgages	$	310,933,350	$	313,515,326	79.8	%	$	209,660,270	$	210,694,778	63.3	%
Preferred equity investments	63,441,546		63,515,633		16.2	%	101,019,788		101,267,732		30.5	%
Mezzanine loans	17,444,357		17,622,804		4.5	%	23,946,549		24,287,203		7.3	%
Credit facility	11,762,500		11,859,876		3.0	%	—		—		—	%
Allowance for loan losses	—		(13,658,481)		(3.5)	%	—		(3,738,758)		(1.1)	%
Total	$	403,581,753	$	392,855,158	100.0	%	$	334,626,607	$	332,510,955	100.0	%

	December 31, 2021						December 31, 2020
Property Type	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
Office	$	166,071,342	$	166,836,320	42.5	%	$	145,560,299	$	146,010,011	43.9	%
Multifamily	72,999,417		73,955,240		18.8	%	103,057,678		103,678,464		31.1	%
Hotel - full/select service	56,847,381		57,395,682		14.6	%	49,142,809		49,393,251		14.9	%
Student housing	31,000,000		31,565,670		8.0	%	3,000,000		3,204,375		1.0	%
Infill land	28,960,455		28,923,827		7.4	%	5,847,837		5,901,575		1.8	%
Mixed use	28,940,658		28,977,024		7.4	%	16,767,984		16,767,984		5.0	%
Industrial	18,762,500		18,859,876		4.8	%	7,000,000		7,000,000		2.1	%
Hotel - extended stay	—		—		—	%	4,250,000		4,294,053		1.3	%
Allowance for loan losses	—		(13,658,481)		(3.5)	%	—		(3,738,758)		(1.1)	%
Total	$	403,581,753	$	392,855,158	100.0	%	$	334,626,607	$	332,510,955	100.0	%

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	December 31, 2021						December 31, 2020
Geographic Location	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
United States
California	$	187,209,547	$	189,082,380	48.1	%	$	143,454,602	$	144,066,584	43.3	%
New York	63,441,546		63,515,633		16.2	%	56,058,669		56,139,234		16.9	%
Georgia	53,289,288		53,536,884		13.6	%	74,116,787		74,505,752		22.4	%
North Carolina	44,492,971		44,704,699		11.4	%	28,647,837		28,802,869		8.7	%
Utah	28,000,000		28,420,056		7.2	%	—		—		—	%
Texas	13,625,000		13,725,690		3.5	%	3,848,712		3,887,200		1.2	%
Massachusetts	7,000,000		7,000,000		1.8	%	7,000,000		7,000,000		2.1	%
Washington	3,523,401		3,382,683		0.9	%	18,500,000		18,643,699		5.5	%
South Carolina	3,000,000		3,145,614		0.8	%	3,000,000		3,204,375		1.0	%
Allowance for loan losses	—		(13,658,481)		(3.5)	%	—		(3,738,758)		(1.1)	%
Total	$	403,581,753	$	392,855,158	100.0	%	$	334,626,607	$	332,510,955	100.0	%

Factors Impacting Operating Results

    Our results of operations are affected by a number of factors and primarily depend on, among other things, the level of the interest income from targeted assets, the market value of our assets and the supply of, and demand for, real estate-related loans, including mezzanine loans, first mortgage loans, subordinated mortgage loans, preferred equity investments and other loans related to high quality commercial real estate in the United States, and the financing and other costs associated with our business. Interest income and borrowing costs may vary as a result of changes in interest rates, which could impact the net interest we receive on our assets. Our operating results may also be impacted by conditions in the financial markets and unanticipated credit events experienced by borrowers under our loan assets.

Credit Risk

    Credit risk represents the potential loss that we would incur if our borrowers failed to perform pursuant to the terms of their obligations to us. With respect to our loan portfolio, we seek to manage credit risk by limiting exposure to any one individual borrower and any one asset class.

    Additionally, our Manager employs an asset management approach and monitors the portfolio of investments through, at a minimum, quarterly financial review of property performance including net operating income, loan-to-value, debt service coverage ratio and the debt yield. Our Manager also requires certain borrowers to establish an interest reserve, as a form of additional collateral, for the purpose of providing for future interest or property-related operating payments.

    The performance and value of our loans depends upon the sponsors’ ability to operate or manage the development of the respective properties that serve as collateral so that each property’s value ultimately supports the repayment of the loan balance. Mezzanine loans and preferred equity investments are subordinate to senior mortgage loans and, therefore, involve a higher degree of risk. In the event of a default, mezzanine loans and preferred equity investments will be satisfied only after the senior lender’s investment is fully recovered. As a result, in the event of a default, we may not recover all of our investments.

    In addition, we are exposed to the risks generally associated with the commercial real estate market, including variances in occupancy rates, capitalization rates, absorption rates, and other macroeconomic factors beyond our control. We seek to manage these risks through our Manager's underwriting and asset management processes.

    The COVID-19 pandemic has significantly impacted the commercial real estate markets, causing reduced occupancy, requests from tenants for rent deferral or abatement, and delays in construction and development projects currently planned or underway. While the economy has improved significantly, macroeconomic trends associated with COVID-19 pandemic have persisted and could continue to persist and impair our borrowers’ ability to pay principal and interest due to us under our loan agreements.

    We maintain all of our cash at financial institutions which, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation.

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Concentration Risk

    We hold real estate-related loans. Thus, our loan portfolio may be subject to a more rapid change in value than would be the case if it were required to maintain a wide diversification among industries, companies and types of loans. The result of such concentration in real estate assets is that a loss in such loans could materially reduce our capital.

Interest Rate Risk

    Interest rate risk represents the effect from a change in interest rates, which could result in an adverse change in the fair value of our interest-bearing financial instruments. With respect to our business operations, increases in interest rates, in general, may over time cause: (i) the interest expense associated with variable rate borrowings to increase; (ii) the value of real estate-related loans to decline; (iii) coupons on variable rate loans to reset, although on a delayed basis, to higher interest rates; (iv) to the extent applicable under the terms of our investments, prepayments on real estate-related loans to slow; and (v) to the extent we enter into interest rate swap agreements as part of our hedging strategy, the value of these agreements to increase.

    Conversely, decreases in interest rates, in general, may over time cause: (i) the interest expense associated with variable rate borrowings to decrease; (ii) the value of real estate-related loans to increase; (iii) coupons on variable rate real estate-related loans to reset, although on a delayed basis, to lower interest rates; (iv) to the extent applicable under the terms of our investments, prepayments on real estate-related loans to increase; and (v) to the extent we enter into interest rate swap agreements as part of our hedging strategy, the value of these agreements to decrease.

Prepayment Risk

    Prepayments can either positively or adversely affect the yields on our loans. Prepayments on debt instruments, where permitted under the debt documents, are influenced by changes in current interest rates and a variety of economic, geographic and other factors beyond our control, and consequently, such prepayment rates cannot be predicted with certainty. If we do not collect a prepayment fee in connection with a prepayment or are unable to invest the proceeds of such prepayments received, the yield on the portfolio will decline. In addition, we may acquire assets at a discount or premium and if the asset does not repay when expected, the anticipated yield may be impacted. Under certain interest rate and prepayment scenarios we may fail to recoup fully our cost of acquisition of certain loans.

Extension Risk

    Extension risk is the risk that our assets will be repaid at a slower rate than anticipated and generally increases when interest rates rise. In which case, to the extent we have financed the acquisition of an asset, we may have to finance our asset at potentially higher costs without the ability to reinvest principal into higher yielding securities because borrowers prepay their mortgages at a slower pace than originally expected, adversely impacting our net interest spread, and thus our net interest income.

Real Estate Risk

    The market values of commercial and residential mortgage assets are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; retroactive changes to building or similar codes; pandemics; natural disasters; and other acts of god. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay the underlying loans, which could also cause us to suffer losses.

Use of Leverage

    We deploy moderate amounts of leverage as part of our operating strategy, which may consist of borrowings under first mortgage financings, warehouse facilities, term loans, repurchase agreements and other credit facilities. While borrowing and leverage present opportunities for increasing total return, they may have the effect of potentially creating or increasing losses.

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Market Risk

    Our loans are highly illiquid, and there is no assurance that we will achieve our investment objectives, including targeted returns. Due to the illiquidity of the loans, valuation of our loans may be difficult, as there generally will be no established markets for these loans.

Results of Operations

    The following table presents the comparative results of our operations for the years ended December 31, 2021 and 2020:

	Years Ended December 31,
	2021		2020		Change
Revenues
Interest income	$	36,743,470	$	39,392,209	$	(2,648,739)
Real estate operating revenue	8,894,991		10,423,563		(1,528,572)
Prepayment fee income	190,997		—		190,997
Other operating income	855,799		505,116		350,683
	46,685,257		50,320,888		(3,635,631)
Operating expenses
Operating expenses reimbursed to Manager	6,916,371		6,041,075		875,296
Asset management fee	5,134,149		4,480,706		653,443
Asset servicing fee	1,181,924		1,008,256		173,668
Provision for loan losses	10,904,163		3,738,758		7,165,405
Real estate operating expenses	5,003,893		4,505,119		498,774
Depreciation and amortization	3,989,114		4,635,980		(646,866)
Impairment charge	3,395,430		—		3,395,430
Professional fees	1,795,856		1,695,876		99,980
Directors fees	145,000		190,000		(45,000)
Other	448,503		371,444		77,059
	38,914,403		26,667,214		12,247,189
Operating income	7,770,854		23,653,674		(15,882,820)
Other income and expenses
Interest expense from obligations under participation agreements	(10,596,545)		(8,514,804)		(2,081,741)
Interest expense on repurchase agreement payable	(142,495)		(3,727,466)		3,584,971
Interest expense on mortgage loan payable	(2,449,239)		(2,976,913)		527,674
Interest expense on revolving line of credit	(911,811)		(1,398,103)		486,292
Interest expense on term loan payable	(6,835,877)		(2,137,651)		(4,698,226)
Interest expense on secured borrowing	(1,576,502)		(633,850)		(942,652)
Interest expense on unsecured notes payable	(3,173,673)		—		(3,173,673)
Net loss on extinguishment of obligations under participation    agreements	—		(319,453)		319,453
Net change in unrealized gains on marketable securities	22,500		111,494		(88,994)
Income from equity investment in a limited partnership	5,925,802		38,640		5,887,162
Realized loss on loan repayments	(517989)		—		(517,989)
Realized gains on marketable securities	129,248		1,160,162		(1,030,914)
	(20,126,581)		(18,397,944)		(1,728,637)
Net (loss) income	$	(12,355,727)	$	5,255,730	$	(17,611,457)

Net Loan Portfolio

    In assessing the performance of our loans, we believe it is appropriate to evaluate the loans on an economic basis, that is, gross loans net of obligations under participation agreements, term loan payable, revolving credit facility and repurchase agreement payable.

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    The following tables presents a reconciliation of our loan portfolio from a gross basis to net basis for the years ended December 31, 2021 and 2020:

	Year Ended December 31, 2021				Year Ended December 31, 2020
	Weighted Average Principal Amount (1)		Weighted Average Coupon Rate (2)		Weighted Average Principal Amount (1)		Weighted Average Coupon Rate (2)
Total portfolio
Gross loans	$	456,344,152	8.5	%	$	411,157,772	9.2	%
Obligations under participation agreements    and secured borrowing	(114,437,021)		11.0	%	(83,248,489)		10.9	%
Repurchase agreement payable	(6,349,642)		2.6	%	(64,382,360)		3.9	%
Term loan payable	(103,433,296)		5.3	%	(34,923,075)		5.3	%
Revolving line of credit	(16,721,744)		4.0	%	—		—	%
Net loans (3)	$	215,402,449	9.2	%	$	228,603,848	10.7	%
Senior loans
Gross loans	272,577,220		6.5	%	221,461,896		6.7	%
Obligations under participation agreements    and secured borrowing	(51,693,824)		8.9	%	(30,779,483)		9.1	%
Repurchase agreement payable	(6,349,642)		2.6	%	(64,382,360)		3.9	%
Term loan payable	(103,433,296)		5.3	%	(34,923,075)		5.3	%
Revolving line of credit	(16,721,744)		4.0	%	—		—	%
Net loans (3)	$	94,378,714	7.2	%	$	91,376,978	8.4	%
Subordinated loans (4)
Gross loans	183,766,932		11.4	%	189,695,876		12.1	%
Obligations under participation agreements	(62,743,197)		12.8	%	(52,469,006)		12.1	%
Net loans (3)	$	121,023,735	10.7	%	$	137,226,870	12.1	%

_______________

(1)Amount is calculated based on the number of days each loan is outstanding.

(2)Amount is calculated based on the underlying principal amount of each loan.

(3)The weighted average coupon rate represents net interest income over the period calculated using the weighted average coupon rate and weighted average principal amount shown on the table (interest income on the loans less interest expense) divided by the weighted average principal amount of the net loans during the period.

(4)Subordinated loans include mezzanine loans, preferred equity investments and credit facilities.

    For the year ended December 31, 2021 as compared to the same period in 2020, the decrease in weighted average coupon rate was primarily due to a higher volume of loan originations with lower coupon rates.

Interest Income

    For the year ended December 31, 2021 as compared to the same period in 2020, interest income decreased by $2.6 million, primarily due to the suspension of interest income accrual of $3.6 million on three loans, because recovery of such income was doubtful, partially offset by an increase in contractual interest income as a result an increase in the weighted average principal balance of gross loans.

Real Estate Operating Revenue

For the year ended December 31, 2021 as compared to the same period in 2020, real estate operating revenue decreased by $1.5 million, as a result of a lease termination in the third quarter of 2020.

Prepayment Fee Income

Prepayment fee income represents prepayment fees charged to borrowers for the early repayment of loans.

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For the year ended December 31, 2021, we received a prepayment fee income of $0.2 million on a loan that the borrower repaid one year before maturity. There was no prepayment fee income for the year ended December 31, 2020.

Other Operating Income

For the year ended December 31, 2021 as compared to the same period in 2020, other operating income increased by $0.4 million, as a result of dividend income earned on the marketable securities we invested in.

Operating Expenses Reimbursed to Manager

Under the terms of the Management Agreement, we reimburse the Manager for operating expenses incurred in connection with services provided to us, including our allowable share of the Manager’s overhead, such as rent, employee costs, utilities and technology costs.

For the year ended December 31, 2021 as compared to the same period in 2020, operating expenses reimbursed to the Manager increased by $0.9 million as a result of an increase in the Manager’s overhead costs.

Asset Management Fee

    Under the terms of the Management Agreement with the Manager, we paid the Manager a monthly asset management fee at an annual rate of 1% of the aggregate funds under management, which included the aggregate gross acquisition price, net of participation interest sold to affiliates, for each real estate-related investment and cash held by us.

    For the year ended December 31, 2021 as compared to the same period in 2020, asset management fees increased by $0.7 million, primarily due to an increase in total assets under management.

Asset Servicing Fee

    Under the terms of the Management Agreement with the Manager, we paid the Manager a monthly servicing fee at an annual rate of 0.25% of the aggregate gross origination price or acquisition price for each real estate-related loan held by us.

    For each of the year ended December 31, 2021 as compared to the same period in 2020, asset servicing fees increased by $0.2 million, primarily due to an increase in total assets under management.

Provision for Loan Losses

    The Manager performs a quarterly evaluation for possible impairment of our portfolio of loans. We record an allowance for loan losses equal to (i) 1.5% of the aggregate carrying amount of loans rated as a “4”, plus (ii) 5% of the aggregate carrying amount of loans rated as a “5”, plus (iii) impaired loan reserves, if any.

     As of December 31, 2021, we had one loan with a loan risk rating of “4” and no loans with a loan risk rating of “5” and recorded general allowance for loan losses of $0.6 million for the year ended December 31, 2021. As of December 31, 2020, we had three loans with a loan risk rating of “4” and one loan with a loan risk rating of “5” and recorded general allowance for loan losses of $1.3 million for the year ended December 31, 2020. Additionally, as of December 31, 2021 and 2020, we had three and one loans, respectively, deemed impaired and recorded specific allowance for loan losses of $10.3 million and $2.5 million, respectively, as a result of a decline in the value of the respective collateral.

Real Estate Operating Expenses

For the year ended December 31, 2021 as compared to the same period in 2020, real estate operating expenses increased by $0.5 million, primarily due to an increase in ground rent expense on the multi-tenant office building resulting from a recent rent reset.

Depreciation and Amortization

For each of the year ended December 31, 2021 as compared to the same period in 2020, depreciation and amortization decreased by $0.6 million, primarily due to a lease termination in the third quarter of 2020, at which time we wrote off the related intangible assets and liabilities.

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Impairment Charge

For the year ended December 31, 2021, we recorded an impairment charge of $3.4 million on the development land in order to reduce the carrying value of the land to its estimated fair value, which is the estimated selling price less the cost of sale. There was no such impairment charge recorded for the year ended December 31, 2020.

Professional Fees

    For the year ended December 31, 2021 as compared to the same period in 2020, professional fees increased by $0.1 million, primarily due to legal fees incurred in connection with a financing transaction that was terminated.

Interest Expense from Obligations under Participation Agreements

    For the year ended December 31, 2021 as compared to the same period in 2020, interest expense from obligations under participation agreements increased by $2.1 million, primarily due to an increase in weighted average principal amount outstanding on obligations under participation agreements.

Interest Expense on Repurchase Agreement Payable

    On December 12, 2018, we entered into a master repurchase agreement that provided for advances of up to $150.0 million in the aggregate, which we used to finance certain secured performing commercial real estate loans. On September 3, 2020, we terminated the master repurchase agreement and replaced it with the indenture and credit agreement. On November 8, 2021, we entered into a new master repurchase agreement that provides for advances of up to $195 million which we expect to use to finance certain secured performing commercial real estate loans, including senior mortgage loans.

    For the year ended December 31, 2021 as compared to the same period in 2020, interest expense on repurchase agreement payable decreased by $3.6 million as a result of a decrease in the weighted average principal amount outstanding on repurchase agreement payable.

Interest Expense on Mortgage Loan Payable

For the year ended December 31, 2021 as compared to the same period in 2020, interest expense on mortgage loan payable decreased by $0.5 million, as a result of a decrease in the weighted average principal amount outstanding on mortgage loan payable.

Interest Expense on Revolving Line of Credit

    On June 20, 2019, we entered into a credit agreement to provide for revolving credit loans of up to $35.0 million in the aggregate, which we used for short term financing needed to bridge the timing of anticipated loans repayments and funding obligations. On October 2, 2020, we amended the credit facility and reduced the commitment to $15.0 million. On March 16, 2021, the credit facility was terminated. On March 12, 2021, we entered into a Business Loan and Security Agreement (the “revolving line of credit”) to provide for advances up to the lesser of $75.0 million or the amount determined by the borrowing base, which is based on the eligible assets pledged to the lender.

    For the year ended December 31, 2021 as compared to the same period in 2020, interest expense on revolving line of credit decreased by $0.5 million, due to a decrease in weighted average principal amount outstanding on the revolving line of credit.

Interest Expense on Term Loan Payable

On September 3, 2020, we entered into an indenture and credit agreement that provides for a floating rate loan of $103.0 million, $3.6 million of additional future advances, and may provide up to $11.6 million of additional future discretionary advances, in connection with certain outstanding funding commitments under the mortgage assets owned by us and financed under the indenture and credit agreement. The loan currently bears interest at LIBOR plus 4.25% with a LIBOR floor of 1.0%.

For the year ended December 31, 2021 as compared to the same period in 2020, interest expense on term loan payable increased by $4.7 million, as a result of an increase in the weighted average principal amount outstanding on term loan payable.

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Interest Expense on Secured Borrowing

In March 2020, we entered into a financing transaction where a third-party purchased an A-note position. However, the sale of the A-note position did not qualify for sale accounting treatment and therefore, the gross amount of the loan remains in the consolidated balance sheets. The portion that was sold is reflected as secured borrowing in the consolidated balance sheet, and the associated interest is reflected as interest expense on secured borrowing in the consolidated statements of operations.

For the year ended December 31, 2021 as compared to the same period in 2020, interest expense on secured borrowing increased by $0.9 million, as a result of an increase in the weighted average principal amount outstanding.

Interest Expense on Unsecured Notes Payable

In June 2021, we issued $85.1 million in aggregate principal amount of 6.00% notes due 2026, for net proceeds of $82.5 million after deducting underwriting commissions of $2.7 million, but before offering expenses payable by us.

For the year ended December 31, 2021, interest expense on unsecured notes payable was $3.2 million. There was no such interest expense for the year ended December 31, 2020 because the notes were not yet issued.

Net Loss on Extinguishment of Obligations under Participation Agreements

    In March 2020, as a result of the Merger and Issuance of Common Stock to Terra Offshore REIT transactions, we settled an aggregate of $49.8 million of participation interests in loans that we owned with affiliates and recognized a net loss on extinguishment of obligations under participation agreements of $0.3 million, which was primarily related to transaction costs incurred in connection with both transactions. There was no such loss recognized for the year ended December 31, 2021.

Income from Equity Investment in Unconsolidated Investments

In August 2020, we entered into a subscription agreement whereby we committed to fund up to $50.0 million to purchase partnership interest in a limited partnership. In the fourth quarter of 2021, we purchased 80% equity interests in two joint ventures that own real estate properties. We account for our equity interests in these investments using the equity method of accounting.

For the year ended December 31, 2021, we recognized income from equity investment in unconsolidated investments of $5.9 million, which consisted of equity income from the limited partnership of $6.2 million, partially offset by equity loss from two joint ventures of $0.2 million. For the year ended December 31, 2020, we recognized income from equity investment in unconsolidated investments of $0.04 million due to operations of the limited partnership that began in December 2020.

Realized Loss on Repayment of Loans

For the year ended December 31, 2021, two previously defaulted loans were repaid at a discount and we recognized a net loss on loan repayment of $0.5 million, excluding previously accrued allowance for loan losses of $1.0 million. There was no such loss recognized during the same period in 2020.    

Realized Gains on Marketable Securities

For the year ended December 31, 2021, we sold marketable securities and recognized realized gains on marketable securities of $0.1 million. For the year ended December 31, 2020, we sold marketable securities and recognized realized gains on marketable securities of $1.2 million.

Net (Loss) Income

    For the year ended December 31, 2021, the resulting net loss was $12.4 million, compared to the resulting net income of $5.3 million for the same period in 2020.

Financial Condition, Liquidity and Capital Resources

    Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, funding and maintaining our assets and operations, making distributions to our stockholders and other general business needs. We use significant cash to purchase our target assets, repay principal and interest on our borrowings, make

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distributions to our investors and fund our operations. Our primary sources of cash generally consist of payments of principal and interest we receive on our portfolio of investments, cash generated from our operating results and unused borrowing capacity under our financing sources. We deploy moderate amounts of leverage as part of our operating strategy and use a number of sources to finance our target assets, including our senior notes, term loan, repurchase agreement and revolving line of credit. We may use other sources to finance our target assets, including bank financing and arranged financing facilities with domestic or international financing providers. In addition, we may divide the loans we originate into senior and junior tranches and dispose of the more senior tranches as an additional means of providing financing to our business.

    We may also issue additional equity, equity-related and debt securities to fund our investment strategies. We may issue these securities to unaffiliated third parties or to vehicles advised by affiliates of Terra Capital Partners or third parties. As part of our capital raising transactions, we may grant to one or more of these vehicles certain control rights over our activities including rights to approve major decisions we take as part of our business. In order to qualify as a REIT, we must distribute to our stockholders, each calendar year, at least 90% of our REIT taxable income (including certain items of non-cash income), determined without regard to the deduction for dividends paid and excluding net capital gain. These distribution requirements limit our ability to retain earnings and thereby replenish or increase capital for our business.

    Obligations under participation agreements totaling $7.8 million and secured borrowing of $34.5 million will mature in the next twelve months. We expect to use the proceeds from the repayment of the corresponding investments to repay the participation obligations. Additionally, we expect to fund approximately $53.0 million of the unfunded commitments to borrowers during the next twelve months. We expect to maintain sufficient cash on hand to fund such commitments through matching these commitments with principal repayments on outstanding loans. Additionally, we had $32.0 million of borrowings outstanding under a mortgage loan payable that bear interest at an annual rate of LIBOR plus 3.85% with a LIBOR floor of 2.23%, that is collateralized by an office building. The mortgage loan payable matures on September 27, 2022. We expect to refinance the mortgage loan payable before it matures.

On September 3, 2020, we entered into an indenture and credit agreement that provides for a floating rate term loan of $103.0 million, $3.6 million of additional future advances, and may provide up to $11.6 million of additional future discretionary advances, in connection with certain outstanding funding commitments under mortgage assets owned by us and financed under the indenture and credit agreement. The floating rate term loan bears interest at a rate equal to LIBOR plus 4.25% with a LIBOR floor of 1.0%, and was scheduled to mature on March 14, 2025. On February 18, 2022, we refinanced the term loan with a new repurchase agreement that provides for advances up to $200.0 million with an initial term of two years. As of December 31, 2021, the amount outstanding under the indenture and credit agreement was $93.8 million.

    On March 12, 2021, we entered into the revolving line of credit to provide for advances up to the lesser of $75.0 million or the amount determined by the borrowing base, which is based on the eligible assets pledged to the lender. Borrowings under the revolving line of credit bear interest at an annual rate of LIBOR + 3.25% with a combined floor of 4.0% per annum. The revolving line of credit was scheduled to mature on March 12, 2023. On January 4, 2022, we amended the revolving line of credit to increase the maximum amount available to $125.0 million and extended the maturity date of the facility to March 12, 2024 with an annual 12-month extension available at our option, which are subject to certain conditions. As of December 31, 2021, the revolving line of credit had an outstanding balance of $38.6 million.

In June 2021, we issued $85.1 million in aggregate principal amount of 6.00% notes due 2026, for net proceeds of $82.5 million after deducting underwriting commissions of $2.7 million, but before offering expenses payable by us. Net proceeds from the notes issuance were used to make new investments as well as for general corporate purposes.

On November 8, 2021, we entered into a master repurchase agreement that provides for advances of up to $195.0 million in the aggregate, which we expect to use to finance certain secured performing commercial real estate loans, including senior mortgage loans. Advances under the master repurchase agreement accrue interest at an annual rate equal to the sum of LIBOR plus an applicable spread, which ranges from 1.60% to 1.85%, and have a maturity date of November 7, 2024. As of December 31, 2021, the master repurchase agreement had an outstanding balance of $44.6 million.

Cash Flows From Operating Activities

    For the year ended December 31, 2021 as compared to the same period in 2020, cash flows from operating activities decreased by $3.8 million, primarily due to a decrease in contractual interest income, payment for real estate tax on our operating real estate as well as payment for additional ground rent as a result of the rent reset.

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Cash Flows Used In Investing Activities

    For the year ended December 31, 2021, cash flows used in investing activities were $87.7 million, primarily related to origination and purchase of loans of $252.4 million, purchase of equity interests in unconsolidated investments of $32.2 million and purchase of marketable securities of $6.5 million, partially offset by proceeds from repayments of loans of $196.8 million and proceeds from sale of marketable securities of $6.6 million.

    For the year ended December 31, 2020, cash flows used in investing activities were $78.2 million, primarily related to payments for investments of $150.4 million, partially offset by proceeds from sales and repayments of investments of $72.2 million.

Cash Flows From Financing Activities

    For the year ended December 31, 2021, cash flows from financing activities were $101.8 million, primarily due to proceeds from issuance of unsecured notes payable, net of discount, of $82.5 million, proceeds from obligations under participation agreements and secured borrowing of $87.9 million and proceeds from borrowings under the term loan, revolving line of credit and repurchase agreement of $85.9 million. These cash inflows were partially offset by repayments on obligations under participation agreements of $101.7 million, distributions paid of $17.1 million, payment of mortgage principal of $12.1 million, repayment on borrowings under the term loan of $16.6 million, a decrease in interest reserve and other deposits hold on investments of $4.7 million and payment for deferred financing costs of $2.3 million.

    For the year ended December 31, 2020, cash flows from financing activities were $52.7 million, primarily due to proceeds from obligations under participation agreements of $22.5 million, proceeds from borrowings under our repurchase agreement of $22.9 million, cash acquired from Terra Property Trust 2 of $16.9 million and cash contributed by Terra Offshore REIT of $8.6 million, partially offset by distributions paid of $21.2 million, a decrease in interest reserve and other deposits held on investments of $6.4 million, payment for repurchase of common stock of $3.6 million and repayments on obligations under participation agreements of $5.9 million. Additionally, we replaced the repurchase agreement with an indenture and credit agreement, and received proceeds from borrowings under the indenture and credit agreement of $107.6 million and made repayments for borrowings under the repurchase agreement of $104.0 million, and made payments for financing costs of $2.4 million. We also received proceeds of $35.0 million from borrowings under revolving credit facility which we repaid in the same period.

Critical Accounting Policies and Use of Estimates

    Our consolidated financial statements are prepared in conformity with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. In preparing the consolidated financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. In preparing the consolidated financial statements, management has utilized available information, including industry standards and the current economic environment, among other factors, in forming its estimates and judgments, giving due consideration to materiality. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our results of operations to those of companies in similar businesses. As we execute our expected operating plans, we will describe additional critical accounting policies in the notes to our future consolidated financial statements in addition to those discussed below.

Allowance for Loan Losses

    Our loans are typically collateralized by either the sponsors’ equity interest in the real estate properties or the underlying real estate properties. As a result, we regularly evaluate the extent and impact of any credit migration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan-by-loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations and/or reserve balances are sufficient to cover the debt service requirements currently and into the future; (ii) the ability of the borrower to refinance the loan; and/or (iii) the property’s liquidation value. We also evaluate the financial wherewithal of the sponsor as well as its competency in managing and operating the real estate property. In addition, we consider the overall economic environment, real estate sector, and geographic submarket in which the borrower operates. Such analyses are completed and reviewed by asset management and finance personnel, who utilize various data

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sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, the capitalization and discount rates; (ii) site inspections; and (iii) current credit spreads and discussions with market participants.

    Our Manager performs a quarterly evaluation for possible impairment of our portfolio of loans. A loan is impaired if it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan. Impairment is measured based on the present value of expected future cash flows or the fair value of the collateral if the loan is collateral dependent. Upon measurement of impairment, we record an allowance to reduce the carrying value of the loan with a corresponding charge to net income.

    In conjunction with the quarterly evaluation of loans not considered impaired, our Manager assesses the risk factors of each loan and assigns each loan a risk rating between 1 (very low risk) and 5 (highest risk), which is an average of the numerical ratings in the following categories: (i) sponsor capability and financial conditions; (ii) loan and collateral performance relative to underwriting; (iii) quality and stability of collateral cash flows and/or reserve balances; and (iv) loan to value. We record an allowance for loan losses equal to (i) 1.5% of the aggregate carrying amount of loans rated as a “4”, plus (ii) 5% of the aggregate carrying amount of loans rated as a “5”, plus (iii) impaired loan reserves, if any.

    There may be circumstances where we modify a loan by granting the borrower a concession that we might not otherwise consider when a borrower is experiencing financial difficulty or is expected to experience financial difficulty in the foreseeable future. Such concessionary modifications are classified as troubled debt restructurings (“TDRs”), unless the modification solely results in a delay in a payment that is insignificant. Loans classified as TDRs are considered impaired loans for reporting and measurement purposes.

Management Agreement with Terra REIT Advisors

    We currently pay the following fees to Terra REIT Advisors pursuant to the Management Agreement:

    Origination and Extension Fee. An origination fee in the amount of 1.0% of the amount used to originate, acquire, fund or structure real estate-related investments, including any third-party expenses related to such loan. In the event that the term of any real estate-related loan is extended, our Manager also receives an origination fee equal to the lesser of (i) 1.0% of the principal amount of the loan being extended or (ii) the amount of fee paid by the borrower in connection with such extension.

    Asset Management Fee. A monthly asset management fee at an annual rate equal to 1.0% of the aggregate funds under management, which includes the loan origination amount or aggregate gross acquisition cost, as applicable, for each real estate-related loan and cash held by us.

    Asset Servicing Fee. A monthly asset servicing fee at an annual rate equal to 0.25% of the aggregate gross origination price or aggregate gross acquisition price for each real estate related loan then held by us (inclusive of closing costs and expenses).

    Disposition Fee. A disposition fee in the amount of 1.0% of the gross sale price received by our company from the disposition of each loan, but not upon the maturity, prepayment, workout, modification or extension of a loan unless there is a corresponding fee paid by the borrower, in which case the disposition fee will be the lesser of (i) 1.0% of the principal amount of the loan and (ii) the amount of the fee paid by the borrower in connection with such transaction. If we take ownership of a property as a result of a workout or foreclosure of a loan, we will pay a disposition fee upon the sale of such property equal to 1.0% of the sales price.

    Transaction Breakup Fee. In the event that we receive any “breakup fees,” “busted-deal fees,” termination fees, or similar fees or liquidated damages from a third-party in connection with the termination or non-consummation of any loan or disposition transaction, our Manager will be entitled to receive one-half of such amounts, in addition to the reimbursement of all out-of-pocket fees and expenses incurred by our Manager with respect to its evaluation and pursuit of such transactions.

    In addition to the fees described above, we reimburse our Manager for operating expenses incurred in connection with services provided to the operations of our company, including our allocable share of our Manager’s overhead, such as rent, employee costs, utilities, and technology costs.

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The following table presents a summary of fees paid and costs reimbursed to our Manager in connection with providing services to us:

	Years Ended December 31,
	2021		2020
Origination and extension fee expense (1)(2)	$	2,729,598	$	1,383,960
Asset management fee	5,134,149		4,480,706
Asset servicing fee	1,181,924		1,008,256
Operating expenses reimbursed to Manager	6,916,371		6,041,075
Disposition fee (3)	1,006,302		504,611
Total	$	16,968,344	$	13,418,608

_______________

(1)Origination and extension fee expense is generally offset with origination and extension fee income. Any excess is deferred and amortized to interest income over the term of the loan.

(2)Amount for the years ended December 31, 2021 and 2020 excluded $0.3 million and $0.5 million of origination fee, respectively, paid to the Manager in connection with our equity investment in unconsolidated investments. These origination fees were capitalized to the carrying value of the unconsolidated investments as transaction costs.

(3)Disposition fee is generally offset with exit fee income and included in interest income on the consolidated statements of operations.

Participation Agreements and Secured Borrowing

    We have further diversified our exposure to loans and borrowers by entering into participation agreements whereby we transferred a portion of certain of our loans on a pari passu basis to related parties, primarily other affiliated funds managed by our Manager or its affiliates, and to a lesser extent, unrelated parties. We have also sold a portion of a loan to a third-party that did not qualify for sale accounting.

    In March 2020, we settled an aggregate of $49.8 million of participation interests in loans held by us with affiliates. In connection with the Merger and Issuance of Common Stock to Terra Offshore REIT, the related participation obligations were settled.

    As of December 31, 2021, the principal balance of our participation obligations totaled $42.0 million, all of which were participation obligations to Terra Fund 6. Additionally, as of December 31, 2021, the principal balance of our secured borrowing was $34.5 million.

    Terra Fund 6 is managed by Terra Income Advisors, LLC, an affiliate of our Manager. If we enter into participation agreements in the future, we generally expect to enter into such agreements only at the time of origination of the investment. Our Manager may experience conflicts in allocating investments as a result of differing compensation arrangements of the Manager and its affiliates and Terra Fund 6.

    The loans that are subject to participation agreements are held in our name, but each of the participant’s rights and obligations, including with respect to interest income and other income (e.g., exit fee, prepayment income) and related fees/expenses (e.g., disposition fees, asset management and asset servicing fees), are based upon their respective pro rata participation interest in such participated investments, as specified in the respective participation agreements. We do not have direct liability to a participant with respect to the underlying loan and the participants’ share of the investments is repayable only from the proceeds received from the related borrower/issuer of the investments and, therefore, the participants also are subject to credit risk (i.e., risk of default by the underlying borrower/issuer).

    Pursuant to the participation agreement with these entities, we receive and allocate the interest income and other related investment income to the participants based on their respective pro rata participation interest. The affiliated fund participant pays related expenses also based on their respective pro rata participation interest (i.e., asset management and asset servicing fees, disposition fees) directly to our Manager, as per the terms of each respective affiliate’s management agreement.

    Other than for U.S. federal income tax purposes, our loan participations do not qualify for sale treatment. As such, the investments remain on our combined consolidated balance sheets and the proceeds are recorded as obligations under participation agreements. Similarly, interest earned on the entire loan balance is recorded within “Interest income” and the

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interest related to the participation interest is recorded within “Interest expense from obligations under participation agreements” in the consolidated statements of operations.

    For the year ended December 31, 2021, the weighted average outstanding principal balance on obligations under participation agreements was approximately $114.4 million and the weighted average interest rate was approximately 11.0%, compared to weighted average outstanding principal balance of approximately $83.2 million and weighted average interest rate of approximately 10.9% for the year ended December 31, 2020.

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

    We may be subject to financial market risks, including changes in interest rates. To the extent that we borrow money to make investments, our net investment income will be dependent upon the difference between the rate at which we borrow funds and the rate at which we invest these funds. In periods of rising interest rates, our cost of funds would increase, which may reduce our net investment income. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

    As of December 31, 2021, we had 15 investments with an aggregate principal balance of $349.7 million, net of obligations under participation agreements and secured borrowing, that provide for interest income at an annual rate of LIBOR plus a spread, 13 of which are subject to a LIBOR floor. A decrease of 100 basis points in LIBOR would decrease our annual interest income, net of interest expense on participation agreements, by approximately $0.1 million, and an increase of 100 basis points in LIBOR would increase our annual interest income, net of interest expense on participation agreements, by approximately $1.8 million.

    Additionally, we had $32.0 million of borrowings outstanding under a mortgage loan payable that bear interest at an annual rate of LIBOR plus 3.85% with a LIBOR floor of 2.23%, that is collateralized by an office building, $93.8 million of borrowings outstanding under an indenture and credit facility that bear interest at an annual rate of LIBOR plus 4.25% with a LIBOR floor of 1.0% collateralized by $163.1 million of first mortgages, a revolving line of credit with an outstanding balance of $38.6 million that bears interest at an annual rate of LIBOR + 3.25% with a combined floor of 4.0% collateralized by $60.1 million of first mortgages and a repurchase agreement with an outstanding balance of $44.6 million that bears interest at an annual rate of LIBOR plus a spread ranging from 1.60% to 1.85% with a LIBOR floor of 0.10% collateralized by $67.4 million of first mortgages. A decrease of 100 basis points in LIBOR had no impact on our total annual interest expense because the debts are protected by LIBOR floors and an increase of 100 basis points in LIBOR would increase our annual interest expense by approximately $0.7 million.

     In July 2017, the U.K. Financial Conduct Authority, which regulates the LIBOR administrator, IBA, announced that it would cease to compel banks to participate in setting LIBOR as a benchmark by the end of 2021, which has subsequently been delayed to June 30, 2023. The Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions convened by the U.S. Federal Reserve, has recommended SOFR as a more robust reference rate alternative to U.S. dollar LIBOR. SOFR is calculated based on overnight transactions under repurchase agreements, backed by Treasury securities. SOFR is observed and backward looking, which stands in contrast with LIBOR under the current methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting panel members. Given that SOFR is a secured rate backed by government securities, it will be a rate that does not take into account bank credit risk (as is the case with LIBOR). SOFR is therefore likely to be lower than LIBOR and is less likely to correlate with the funding costs of financial institutions. Whether or not SOFR attains market traction as a LIBOR replacement tool remains in question. As such, the future of LIBOR at this time is uncertain.

    Potential changes, or uncertainty related to such potential changes, may adversely affect the market for LIBOR-based loans, including our portfolio of LIBOR-indexed, floating-rate loans, or the cost of our borrowings. In addition, changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market for LIBOR-based loans, including the value of the LIBOR-indexed, floating-rate loans in our portfolio, or the cost of our borrowings. In the event LIBOR is unavailable, our investment documents provide for a substitute index, on a basis generally consistent with market practice, intended to put us in substantially the same economic position as LIBOR.

    We may hedge against interest rate fluctuations by using standard hedging instruments, such as futures, options and forward contracts, subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates. For the years ended December 31, 2021 and 2020, we did not engage in interest rate hedging activities.

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Prepayment Risks

    Prepayments can either positively or adversely affect the yields on our loans. Prepayments on debt instruments, where permitted under the debt documents, are influenced by changes in current interest rates and a variety of economic, geographic and other factors beyond our control, and consequently, such prepayment rates cannot be predicted with certainty. If we do not collect a prepayment fee in connection with a prepayment or are unable to invest the proceeds of such prepayments received, the yield on the portfolio will decline. In addition, we may acquire assets at a discount or premium and if the asset does not repay when expected, the anticipated yield may be impacted. Under certain interest rate and prepayment scenarios we may fail to recoup fully our cost of acquisition of certain loans.

Extension Risk

    Extension risk is the risk that our assets will be repaid at a slower rate than anticipated and generally increases when interest rates rise. In which case, to the extent we have financed the acquisition of an asset, we may have to finance our asset at potentially higher costs without the ability to reinvest principal into higher yielding securities because borrowers prepay their mortgages at a slower pace than originally expected, adversely impacting our net interest spread, and thus our net interest income.

Real Estate Risk

    The market values of commercial and residential mortgage assets are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; retroactive changes to building or similar codes; pandemics; natural disasters; and other acts of god. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay the underlying loans, which could also cause us to suffer losses.

Credit Risk

    We are subject to varying degrees of credit risk in connection with holding a portfolio of our target assets. With respect to our loan portfolio, we seek to manage credit risk by limiting exposure to any one individual borrower and any one asset class.

    Additionally, our Manager employs an asset management approach and monitors the portfolio of investments through, at a minimum, quarterly financial review of property performance including net operating income, loan-to-value, debt service coverage ratio and the debt yield. Our Manager also requires certain borrowers to establish a cash reserve, as a form of additional collateral, for the purpose of providing for future interest or property-related operating payments.

    The COVID-19 pandemic has significantly impacted the commercial real estate markets, causing reduced occupancy, requests from tenants for rent deferral or abatement, and delays in construction and development projects currently planned or underway. While the economy has improved significantly, macroeconomic trends associated with COVID-19 pandemic have persisted and could continue to persist and impair our borrowers’ ability to pay principal and interest due to us under our loan agreements.

Item 8. Financial Statements and Supplementary Data.

    Our financial statements are annexed to this Annual Report on Form 10-K beginning on page F-1.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

    None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2021. Based on that evaluation, our chief

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executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that we would meet our disclosure obligations. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in our periodic reports.

Evaluation of Internal Controls 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. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Our 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 our assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our Manager, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements in our consolidated financial statements. 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.

Under the supervision and with the participation of our management, including the chief executive officer and chief financial officer of our Manager (performing functions equivalent to those a principal executive officer and principal financial officer of our company would perform if we had any officers), we conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on its evaluation, our management concluded that our internal control over financial reporting was effective as of the end of the fiscal year covered by this Annual Report on Form 10-K.

This Annual Report on Form 10-K does not include an attestation report of our independent registered accounting firm due to a transition period established by the rules of the SEC for “emerging growth companies.”

Changes in Internal Control Over Financial Reporting

    During the most recent fiscal quarter, there was no change in our internal controls over financial reporting, as defined under

Rule 13a-15(f) under the Exchange Act, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Item 9B. Other Information.

On February 18, 2022, Terra Mortgage Capital I, LLC (the “Seller”), a special-purpose indirect wholly-owned subsidiary of our company, entered into an Uncommitted Master Repurchase and Securities Contract Agreement (the “Repurchase Agreement”) with Goldman Sachs Bank USA ( the “Buyer”). The Repurchase Agreement provides for advances of up to $200.0 million in the aggregate, which we expect to use to finance the originations of certain secured performing commercial real estate loans and the acquisitions of certain secured non-performing commercial real estate loans. The Repurchase Agreement replaced the term loan, at which time all mortgage assets under the term loan were assigned as purchased assets under the Repurchase Agreement.

Advances under the Repurchase Agreement accrue interest at a per annum pricing rate equal to the sum of (i) Term SOFR (subject to underlying loan floors on a case-by-case basis) and (ii) the applicable spread, which ranges from 1.75% to 3.00%, and have a maturity date of February 18, 2024. The actual terms of financing for each asset will be determined at the time of financing in accordance with the Repurchase Agreement. Subject to satisfaction of certain conditions, the Seller may extend the maturity date of the Repurchase Agreement for another 12-month term.

The Repurchase Agreement contains margin call provisions that provide the Buyer with certain rights in the event of a decline in debt yield, loan-to-value ratio, and value of the underlying loans purchased under the Repurchase Agreement. Upon

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the occurrence of a margin deficit event, the Buyer may require the Seller to make a payment to reduce the purchase price to eliminate any margin deficit.

In connection with the Repurchase Agreement, we entered into a Guarantee Agreement in favor of the Buyer (the “Guarantee Agreement”), pursuant to which we will guarantee the obligations of the Seller under the Repurchase Agreement. Subject to certain exceptions, the maximum liability under the Repurchase Agreement will not exceed 25% of the then currently outstanding repurchase obligations for performing loans and 50% of the then currently outstanding repurchase obligations for non-performing loans under the Repurchase Agreement

The Repurchase Agreement and the Guarantee Agreement contain various representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of these types. In addition, the Guarantee Agreement contains financial covenants, which require us to maintain: (i) cash liquidity of at least the greater of $5 million or 5% of the then-current outstanding amount under the Repurchase Agreement; (ii) total liquidity in an amount equal to or greater than the lesser of $15 million of the then-current outstanding amount under the Repurchase Agreement (iii) tangible net worth at an amount no less than 75% of that at closing; (iv) an EBITDA to adjusted interest expense ratio of not less than 1.50 to 1.00; and (v) a total indebtedness to tangible net worth ratio of not more than 3.00 to 1.00.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

    Set forth below is the information concerning our directors and executive officers.

Board of Directors

    Our board of directors consists of three members. Our board of directors has determined that each of our directors satisfies the listing standards for independence of the New York Stock Exchange (“NYSE”), except for Vikram S. Uppal, our Chairman and our Chief Executive Officer. Our bylaws provide that a majority of the entire board of directors may at any time increase or decrease the number of directors. However, the number of directors may never be less than the minimum number required by the Maryland General Corporation Law (which is currently one) nor, unless our bylaws are amended, more than 15.

    The following sets forth certain information with respect to our directors:

Name	Age	Position held
Vikram S. Uppal*	38	Chairman of the Board of Directors, Chief Executive Officer, Chief Investment Officer
Roger H. Beless	60	Director
Michael L. Evans	69	Director

*On November 10, 2021, Andrew M. Axelrod, the then Chairman of the Board of Directors, resigned as our director effectively immediately. Following Mr. Axelrod’s resignation, our board of directors designated Vikram S. Uppal as our Chairman of the Board of Director and the size of our board of directors was reduced from four directors to three directors.

    Vikram S. Uppal has served as the Chairman of the Board of Directors since November 2021, one of our directors February 2018 to November 2021 and served as Chief Executive Officer for our company, our Manager, Terra Fund Advisors and Terra Capital Partners since December 2018 and as a director of RESOF since October 2020. Mr. Uppal has also served as Chief Investment Officer for our company, Terra Capital Partners and our Manager since February 2018. Mr. Uppal is also the Chief Executive Officer of Terra Income Advisors and Terra Fund 6 since April 2019. Prior to joining Terra Capital Partners, Mr. Uppal was a Partner and Head of Real Estate at Axar Capital Management since 2016. Prior to Axar Capital Management, Mr. Uppal was a Managing Director on the Investment Team at Fortress Investment Group's Credit and Real Estate Funds from 2015 to 2016. From 2012 to 2015, Mr. Uppal worked at Mount Kellett Capital Management, a private investment organization, and served as Co-Head of North American Real Estate Investments. Mr. Uppal holds a B.S. from the University of St. Thomas and a M.S. from Columbia University.

Roger H. Beless has served as one of our independent directors since February 2018. Since May 2016, Mr. Beless has served as Chief Operating Officer at StreetLights Residential, where he oversees capital markets, asset and portfolio

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management and acquisitions/dispositions, and company operations. From June 2012 until March 2016, Mr. Beless served as Managing Director for Mount Kellett Capital Management, where he oversaw global real estate asset management. Prior to joining Mount Kellett, Mr. Beless spent nearly 20 years with Goldman Sachs/Archon Group where he held a number of positions, including co-head of US Real Estate and Chief Operating Officer for Archon Residential, where he oversaw acquisitions, asset management, property management and dispositions. Mr. Beless also spent four years in Tokyo, Japan where he led the startup of Goldman Sachs Realty Japan, Ltd. He currently serves on the board of Waymaker Value and Real Estate and the advisory board of Apartment Life. Mr. Beless holds a Bachelor’s of B.A. in Economics and Finance from Baylor University and a M.B.A from Southern Methodist University.

Michael L. Evans has served as one of our independent directors since October 2017. Mr. Evans has served as a member of the board of directors of Terra Fund 6 from March 2015 to April 2019. Since December 2012, Mr. Evans has been the Managing Director and Chief Financial Officer of Newport LLC (formerly known as Newport Board Group), a CEO and board advisory firm. From June 2010 to September 2011, Mr. Evans served as the Interim Country Manager and Advisory Board Member for Concern Worldwide U.S. Inc., a non-profit humanitarian organization. From January 1977 until June 2010, Mr. Evans was with Ernst & Young, LLP (“Ernst & Young”), and served as a partner since 1984. During his nearly 34 years with Ernst & Young, he served as a tax, audit and consulting services partner, specializing in real estate companies and publicly-traded entities. Mr. Evans currently serves on the Advisory Board of Marcus & Millichap, Inc., the Independent Counsel Board of Prologis Targeted U.S. Logistics Fund and the board of directors of Newport LLC and Sen Plex, Inc. Mr. Evans is a licensed attorney and a C.P.A. (inactive) in California. He is currently a contributing business writer for Forbes.com and Allbusiness.com. Mr. Evans received a B.S.B. in accounting from the University of Minnesota, a J.D. from William Mitchell College of Law and an M.B.A. from Golden Gate University.     

Executive Officers

    The names, ages, positions and biographies of our officers are as follows:

Name	Age	Position(s) Held with the Company
Vikram S. Uppal	38	Chairman of the Board of Directors, Chief Executive Officer, Chief Investment    Officer
Gregory M. Pinkus	57	Chief Operating Officer and Chief Financial Officer
Daniel J. Cooperman	47	Chief Originations Officer

    For biographical information regarding Mr. Uppal, see “Item 10. — Board of Directors” above.

Gregory M. Pinkus has served as the Chief Financial Officer, Treasurer and Secretary of our company and the Chief Financial Officer and Chief Operating Officer of our Manager, Terra Fund Advisors, and Terra Income Advisors since January 2016, October 2017, October 2017, and May 2013, respectively. He has served as (i) the Chief Financial Officer of Terra Capital Advisors, Terra Capital Advisors 2 and Terra Income Advisors 2 since May 2012, September 2012 and October 2016; (ii) the Chief Operating Officer of Terra Capital Advisors, Terra Capital Advisors 2 and Terra Capital Partners since July 2014; (iii) the Chief Operating Officer of Terra Income Advisors 2 since October 2016; (iv) the Chief Financial Officer, Treasurer and Secretary of Terra Fund 6 since May 2013 and Chief Operating Officer of Terra Fund 6 since July 2014; (v) the Chief Financial Officer and Chief Operating Officer of Fund 5 International, Terra International and Terra Fund 7 since June 2014, October 2016 and October 2016, respectively; and (vi) a director of RESOF since October 2020. Prior to joining Terra Capital Partners in May 2012, he served as Assistant Controller for W.P. Carey & Co. from 2006 to August 2010 and as Controller from August 2010 to May 2012. Mr. Pinkus also served as Controller and Vice President of Finance for several early-stage technology companies during the period of 1999 to 2005. Additionally, he managed large-scale information technology budgets at New York Life Insurance Company from 2003 to 2004 and oversaw an international reporting group at Bank of America from 1992 to 1996. Mr. Pinkus is a Certified Public Accountant and member of the American Institute of Certified Public Accountants. He holds a B.S. in Accounting from the Leonard N. Stern School of Business at New York University.

    Daniel J. Cooperman has served as Chief Originations Officer of our company, our Manager, Terra Fund Advisors and Terra Income Advisors since January 2016, September 2017, September 2017 and February 2015, respectively. Mr. Cooperman has served as Chief Originations Officer of (i) each of Terra Capital Advisors and Terra Capital Advisors 2 since January 2015, having previously served as Managing Director of Originations until January 2015 of Terra Capital Advisors and Terra Capital Advisors 2 since April 2009 and September 2012, respectively; (ii) Fund 5 International since January 2015, having previously served as Managing Director of Originations from June 2014 to June 2014; (iii) Terra Fund 6 since February 2015, having previously served as Managing Director of Originations from May 2013 until February 2015; and (iv) each of Terra Income Advisors 2, Terra International, and Terra Fund 7 since October 2016. Mr. Cooperman has 18 years’ experience in the

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acquisition, financing, leasing and asset management of commercial real estate with an aggregate value of over $5 billion. Prior to the formation of Terra Capital Partners in 2001 and its commencement of operations in 2002, Mr. Cooperman handled mortgage and mezzanine placement activities for The Greenwich Group International, LLC. Prior to joining The Greenwich Group, Mr. Cooperman worked in Chase Manhattan Bank’s Global Properties Group, where he was responsible for financial analysis and due diligence for the bank’s strategic real estate acquisitions and divestitures. Prior to that time, he was responsible for acquisitions and asset management for JGS, a Japanese conglomerate with global real estate holdings. Mr. Cooperman holds a B.S. in Finance from the University of Colorado at Boulder.

Code of Ethics

    Our Manager has adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) pursuant to Rule 17j‑1 of the Advisers Act, which applies to, among others, the senior officers of our Manager, including the chief executive officer and the chief financial officer, as well as every officer, director, employee and “access person” (as defined within the Code of Ethics). We will also provide the Code of Ethics, free of charge, to stockholders who request it. Requests should be directed to Bernadette Murphy, at Terra Property Trust, Inc., 550 Fifth Avenue, 6th Floor, New York, New York 10036.

Audit Committee

    We have established an audit committee of the board of directors (the “Audit Committee”) that operates pursuant to a charter and consists of two members. The Audit Committee is responsible for selecting, engaging and supervising our independent accountants, reviewing the plans, scope and results of the audit engagement with our independent accountants, approving professional services provided by our independent accountants (including compensation therefor), reviewing the independence of our independent accountants and reviewing the adequacy of our internal controls over financial reporting. The members of the Audit Committee are Messrs. Beless and Evans. Mr. Evans serves as the chairman of the Audit Committee. Our board of directors has determined that Mr. Evans is an “audit committee financial expert” as defined under Item 407 of Regulation S-K promulgated under the Exchange Act. Our board of directors has determined that each of Messrs. Beless and Evans meets the current independence and experience requirements of Rule 10A-3 of the Exchange Act.

Delinquent Section 16(a) Reports

Pursuant to Section 16(a) of the Exchange Act, our directors and executive officers, and any persons holding more than 10% of its common stock, are required to report their beneficial ownership and any changes therein to us and the SEC. Specific due dates for those reports have been established, and we are required to report herein any failure to file such reports by those due dates. Based solely on a review of the copies of such reports and written representations delivered to us by such persons, we believe that there were no violations of Section 16(a) by such persons during the year ended December 31, 2021.

Item 11. Executive Compensation.

    We are externally managed and currently have no employees. Pursuant to the Management Agreement, our Manager provides certain services to our company, and we pay fees associated with such services. The officers of our Manager do not receive any compensation from us. Each of our officers is an employee of our Manager. Because our Management Agreement provides that our Manager is responsible for managing our affairs, our officers do not receive cash compensation from us for serving as our officers.

    Our Manager is responsible for managing our day-to-day operations and all matters affecting our business and affairs, including responsibility for determining when to buy and sell real estate-related assets. Our Manager is not obligated under the Management Agreement to dedicate any of its personnel exclusively to us, nor is it or its personnel obligated to dedicate any specific portion of its or their time to the business. Our officers, in their capacities as officers or personnel of our Manager or its affiliates, will devote such portion of their time to our affairs as is necessary to enable us to operate our business.

Compensation of the Directors

    In 2021, our independent directors earned $60,000 annual base director’s fee. In addition, in 2021, the chairperson of the Audit Committee earned an annual cash retainer of $15,000 and the other members of the Audit Committee earned an annual cash retainer of $10,000. We also reimburse all members of our board of directors for their travel related expenses incurred in connection with their attendance at board and committee meetings.

    We pay directors’ fees only to those directors who are independent under the NYSE listing standards.

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    The following table sets forth compensation of our directors for the year ended December 31, 2021:

Name	Fees Earned or Paid in Cash		All Other Compensation		Total
Roger H. Beless	$	70,000	$	—	$	70,000
Michael L. Evans	$	75,000	$	—	$	75,000

Compensation Committee Interlocks and Insider Participation

We currently do not have a compensation committee of our board of directors because we do not plan to pay any compensation to our officers. There are no interlocks or insider participation as to compensation decisions required to be disclosed pursuant to SEC regulations.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

    The following table sets forth, as of March 11, 2022, certain information regarding the ownership of shares of our common stock by:

(1)each of our directors;

(2)each of our executive officers;

(3)holders of more than 5% of our capital stock; and

(4)all of our directors and executive officers as a group.

    Each listed person’s beneficial ownership includes:

(1)all shares the investor actually owns beneficially or of record;

(2)all shares over which the investor has or shares voting or dispositive control (such as in the capacity as a general partner of an investment fund);

(3)all shares the investor has the right to acquire within 60 days; and

    Unless otherwise indicated, we believe that each beneficial owner set forth in the table below has sole voting and investment power. Unless otherwise indicated, all shares are owned directly, and the indicated person has sole voting and investment power. Except as indicated in the footnotes to the table below, the business address of the stockholders listed below is the address of our principal executive office, 550 Fifth Avenue, 6th Floor, New York, NY 10036.

	Shares Beneficially Owned as of  March 11, 2022
Name	Number of Shares	Percentage (3)
Vikram S. Uppal (1)	49,427.63	*
Gregory M. Pinkus	—	—
Daniel J. Cooperman	—	—
Roger H. Beless	—	—
Michael L. Evans	—	—
All directors and executive officers as a group (5 persons)	—	—
5% or Greater Beneficial Owners
Terra JV (2)	17,029,775.95	87.4%
Terra Offshore REIT (2)	2,457,684.59	12.6%

_______________

* Represents beneficial ownership of less than 1%.

(1)On April 6, 2020, Mr. Uppal purchased 22 units of limited liability company interest (the “Units”) of Terra Fund 5 in a secondary market transaction. The Units are held through Lakshmi 15 LLC, a family limited liability company over which Mr. Uppal exercises voting and investment control. The shares of our common stock indicated on this report as being held

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indirectly by Mr. Uppal are held indirectly by Terra Fund 5 through a controlled subsidiary. Mr. Uppal is the Chief Executive Officer and Chief Investment Officer of Terra Fund Advisors, the manager of Terra Fund 5. Accordingly, Mr. Uppal disclaims beneficial ownership of the shares of our common stock reported herein except to the extent of his pecuniary interest therein, and this report shall not be deemed an admission that he is the beneficial owner of such shares for purposes of Section 16 or for any other purpose.

(2)Terra Fund 5 is managed by Terra Fund Advisors, its managing member. The shares of common stock held by Terra Fund 5 are subject to the provisions of the Voting Agreement and certain related agreements described in greater detail under “Item 13. Certain Relationships and Related Transactions.” The inclusion of these shares of our common stock shall not be deemed an admission of beneficial ownership of the reported securities for purposes of Section 16 or for any other purposes.

(3)Based on a total of 19,487,460 shares of common stock issued and outstanding as of March 11, 2022.

Securities Authorized for Issuance under Equity Compensation Plans

None

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Director Independence

For information relating to our independent directors, see Item 10, “Directors, Executive Officers and Corporate Governance” of this Annual Report on Form 10-K.    

Certain Relations and Related Transactions

Terra International Fund 3, L.P.

    On September 30, 2019, we entered into a Contribution and Repurchase Agreement with Terra International Fund 3, L.P. (“Terra International 3”) and Terra Offshore REIT, a then wholly-owned subsidiary of Terra International 3, which we amended and restated on November 13, 2019.

    Pursuant to this agreement, Terra International 3, through Terra Offshore REIT, contributed cash in the amount of $3,620,000 to us in exchange for 212,690.95 shares of common stock, at a price of $17.02 per share. The shares were issued in a private placement in reliance on Section 4(a)(2) of the Securities Act, and the rules and regulations promulgated thereunder. On April 29, 2020, we repurchased, at a price of $17.02 per share, the 212,690.95 shares of common stock that we had previously sold to Terra Offshore REIT on September 30, 2019. At the same time, Terra International 3 redeemed all of its limited partnership interest and ceased operations.

    Our Manager also serves as adviser to Terra Offshore REIT.

Merger and Issuance of Common Stock to Terra Offshore REIT

    On February 28, 2020, we entered into a merger agreement pursuant to which Terra Property Trust 2 was merged with and into us, with us continuing as the surviving corporation, effective March 1, 2020. In connection with the Merger, each share of common stock, par value $0.01 per share, of Terra Property Trust 2 issued and outstanding immediately prior to the effective time of the Merger was converted into the right to receive from us a number of shares of our common stock, par value $0.01 per share, equal to an exchange ratio, which was 1.2031. As a result, Terra Fund 7, the sole stockholder of Terra Property Trust 2, received 2,116,785.76 shares of our common stock as consideration in the Merger. The shares of common stock were issued in a private placement in reliance on Section 4(a)(2) under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

    In addition, on March 2, 2020, we entered into two separate contribution agreements, one by and among us, Terra Offshore REIT and TIFI, and another by and among us, Terra Offshore REIT and Fund 5 International, pursuant to which we issued 2,457,684.59 shares of our common stock to Terra Offshore REIT in exchange for the settlement of $32.1 million of participation interests in loans also held by us, $8.6 million in cash and other net working capital. The shares of common stock were issued in a private placement in reliance on Section 4(a)(2) under the Securities Act and the rules and regulations promulgated thereunder.

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As of December 31, 2021, Terra JV owns 87.4% of the issued and outstanding shares of our common stock with the remainder held by Terra Offshore REIT, and Terra Fund 5 and Terra Fund 7 own an 87.6% and 12.4% interest, respectively, in Terra JV.

Voting Agreement

    On March 2, 2020, we, Terra Fund 5, Terra JV and Terra REIT Advisors also entered into the Amended and Restated Voting Agreement (the “Voting Agreement”), pursuant to which Terra Fund 5 assigned its rights and obligations under the Voting Agreement to Terra JV. Consistent with the original voting agreement dated February 8, 2018, for the period that Terra REIT Advisors remains our external manager, Terra REIT Advisors will have the right to nominate two individuals to serve as our directors and, until Terra JV no longer holds at least 10% of our outstanding shares of common stock, Terra JV will have the right to nominate one individual to serve as one of our directors.

    Except as otherwise required by law or the provisions of other agreements to which the parties are or may in the future become bound, the parties have agreed to vote all shares of our common stock directly or indirectly owned in favor (or against removal) of the directors properly nominated in accordance with the Voting Agreement. Other than with respect to the election of directors, the Voting Agreement requires that Terra Fund 5 vote all shares of our common stock directly or indirectly owned by Terra Fund 5 in accordance with the recommendations made by our board of directors.

Receipt of Fees and Other Compensation by Our Manager and its Affiliates

    We pay substantial fees to our Manager. Further, we must reimburse our Manager for costs incurred by it in managing us and our portfolio of real estate-related loans.

    Pursuant to the Management Agreement, our Manager provides certain management services to us, subject to oversight by our board of directors. Our Manager’s responsibilities to us include, among others, investing in, and disposing of, assets, borrowing money, entering into contracts and agreements in connection with our business and purpose, providing administrative support and performing such other services as are delegated to our Manager by our board of directors. In performing its duties, our Manager is subject to a fiduciary responsibility for the safekeeping and use of all of our funds and assets. In consideration for providing such services, our Manager is entitled to certain fees from as described below. The Management Agreement runs co-terminus with Terra Fund 5's amended and restated operating agreement, which terminates on December 31, 2023, unless sooner dissolved in accordance with its terms of our amended and restated operating agreement.

    During the years ended December 31, 2021 and 2020, we paid our Manager in the aggregate the following fees under the Management Agreement: $5.1 million and $4.5 million in asset management fee, respectively, $1.2 million and $1.0 million in asset servicing fees, respectively, $2.7 million and $1.4 million in origination and extension fees, respectively; $1.0 million and $0.5 million in disposition, respectively, and $6.9 million and $6.0 million of operating expense reimbursements, respectively.

    It is anticipated that our Manager will exercise its discretion through our Management Agreement. The agreements and arrangements, including those relating to compensation, between us and our Manager and its affiliates are not the result of arm’s-length negotiations and may create conflicts between our Manager and its affiliates, on the one hand, and us on the other.

Our Manager and its Affiliates May Compete With Us

    Our Manager and its affiliates may engage in real estate-related transactions on their own behalf or on behalf of other entities.

    Our Manager and its affiliates have, and in the future will have, legal and financial obligations with respect to its other programs that are similar to our Manager’s obligations to us. For example, our Manager and affiliates of our Manager are the external managers to Terra Fund 6 and RESOF, all of which follow investment strategies that are similar to our strategy. Competition for investments among the real estate-related investment programs sponsored by our Manager and its affiliates will create a conflict of interest. In determining which program should receive an investment opportunity, our Manager will first evaluate the objectives of each program to determine if the opportunity is suitable for each program. If the proposed investment is appropriate for more than one program, our Manager will then evaluate the portfolio of each program, in terms of diversity of geography, underlying property type, tenant concentration and borrower, to determine if the investment is most suitable for one program in order to create portfolio diversification. If such analysis is not determinative, our Manager will allocate the investment to the program with uncommitted funds available for the longest period or, to the extent feasible, prorate the investment between the programs in accordance with uninvested funds.

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Related Party Transactions

    Related party transactions are those where we or our Manager on our behalf, transact with affiliated companies, including companies managed by our Manager or its affiliates. Our Manager and its affiliates are permitted to enter into certain transactions and perform certain services for us. Such transactions, or the potential for such transactions, could cause conflicts for our Manager with respect to performing its duties. Related party transactions will not be the result of an arm’s-length negotiation.

Participation Agreements and Secured Borrowing

    We have diversified our exposure to loans and borrowers by entering into participation agreements in respect of certain of our loans whereby we transferred a portion of the loans on a pari passu basis to related parties, and to a lesser extent, unrelated parties, with the principal balance of participation obligations totaling $42.0 million as of December 31, 2021. Additionally, we sold a portion of a loan with a principal balance of $34.5 million to a third-party that didn’t qualify for sale accounting treatment. However, we do not have direct liability to a participant under our participation agreements with respect to the underlying loan and the participants’ share of the investments is repayable only from the proceeds received from the related borrower/issuer of the investments and, therefore, the participants also are subject to credit risk (i.e., risk of default by the underlying borrower/issuer). If we enter into participation agreements in the future, we generally expect to enter into such agreements only at the time of origination of the investment. For additional information concerning our participation agreements, see “Item 7— Management’s Discussion and Analysis of Financial Condition and Results of Operations — Participation Agreements and Secured Borrowing.”

Allocation of Our Manager’s Time

    We rely on our Manager to manage our day-to-day activities and to implement our investment strategy. Our Manager is presently, and plans to continue to be, involved with activities that are unrelated to us. As a result of these activities, our Manager, its employees and certain of its affiliates will have conflicts of interest in allocating their time between us and the other activities in which they are or may become involved, including the management of Terra Fund 6 and RESOF. The employees of our Manager will devote only as much of its or their time to our business as it and its employees, in their judgment, determine is reasonably required, which may be substantially less than their full time. Therefore, our Manager, its personnel and certain affiliates may experience conflicts of interest in allocating management time, services and functions among us and any other business ventures in which they or any of their key personnel, as applicable, are or may become involved. This could result in actions that are more favorable to other affiliated entities than to us.

    However, we believe that the members of our Manager’s senior management and the other key debt finance professionals performing services for us on behalf of our Manager have sufficient time to fully discharge their responsibilities to us and to the other businesses in which they are involved. We believe that our Manager’s executive officers will devote the time required to manage our business and expect that the amount of time a particular executive officer or affiliate devotes to us will vary during the course of the year and depend on business activities at the given time. We expect that these executive officers and affiliates will generally devote more time to programs raising and investing capital than to programs that have completed their offering stages, though from time to time each program will have its unique demands. Because many of the operational aspects of Terra Capital Partners-sponsored programs are very similar, there are significant efficiencies created by the same team of individuals at our Manager providing services to multiple programs. For example, our Manager has streamlined the structure for financial reporting, internal controls and investment approval processes for the programs.

Competition and Allocation of Investment Opportunities

    Employees of our Manager or its affiliates are simultaneously providing investment advisory or management services to other affiliated entities, including Terra Fund 6 and RESOF.

    Our Manager may determine it appropriate for us and one or more other investment programs managed by our Manager or any of its affiliates to participate in an investment opportunity. To the extent we are able to make co-investments with investment programs managed by our Manager or its affiliates, these co-investment opportunities may give rise to conflicts of interest or perceived conflicts of interest among us and the other participating programs. In addition, conflicts of interest or perceived conflicts of interest may also arise in determining which investment opportunities should be presented to us and other participating programs.

    To mitigate these conflicts, our Manager will seek to execute such transactions on a fair and equitable basis and in accordance with its allocation policies, taking into account various factors, which may include: the source of origination of the

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investment opportunity; objectives and strategies; tax considerations; risk, diversification or investment concentration parameters; characteristics of the security; size of available investment; available liquidity and liquidity requirements; regulatory restrictions; and/or such other factors as may be relevant to a particular transaction.

Receipt of Compensation by Affiliates

    The payments to our Manager and certain of its affiliates have not been determined through arm’s-length negotiations, and are payable regardless of our profitability. Our Manager receives fees for their services, including an origination fee, asset management fee, asset servicing fee, disposition fee and transaction break-up fee.

    To the extent the Management Agreement is amended in the future, including if we enter into a new management agreement with our Manager or its affiliates, the terms of any such arrangement will not have been determined through arm’s-length negotiations and may be payable, in whole or in part, regardless of profitability.

Other Conflicts of Interest

    We will be subject to conflicts of interest arising out of our relationship with our Manager and its affiliates. In the future, we may enter into additional transactions with our Manager, Terra Capital Partners or its affiliates. In particular, we may invest in, or acquire, certain of our investments through joint ventures with our Manager, Terra Capital Partners or its affiliates or purchase assets from, sell assets to or arrange financing from or provide financing to its other vehicles. Any such transactions will require approval of our Manager. Any such transactions will require approval of a majority of our independent directors.

    There can be no assurance that any procedural protections will be sufficient to assure that these transactions will be made on terms that will be at least as favorable to us as those that would have been obtained in an arm’s-length transaction.

Item 14. Principal Accounting Fees and Services.

During the years ended December 31, 2021 and 2020, KPMG LLP (“KPMG”) served as our independent auditor and provided certain tax and other services. Our board of directors currently anticipates that it will engage KPMG as our independent auditor to audit our financial statements for the year ending December 31, 2022, subject to agreeing on fee estimates for the audit work. Our board of directors reserves the right, however, to select a new auditor at any time in the future in its discretion if it deems such decision to be in the best interests of us and our stockholders. Any such decision would be disclosed to the stockholders in accordance with applicable securities laws.

The following table displays fees for professional services by KPMG for the years ended December 31, 2021 and 2020:

	Years Ended December 31,
	2021		2020
Audit Fees	$	732,700	$	463,000
Audit-Related Fees	—		—
Tax Fees	81,580		68,380
All Other Fees	—		—
Total	$	814,280	$	531,380

Audit Fees.  Audit fees include fees for services that normally would be provided by KPMG in connection with statutory and regulatory filings or engagements and that generally only an independent accountant can provide. In addition to fees for the audit of our annual financial statements and the review of our quarterly financial statements in accordance with standards of the Public Company Accounting Oversight Board, this category contains fees for comfort letters, statutory audits, consents, and assistance with and review of documents filed with the SEC.

Audit-Related Fees.  Audit-related services consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards.

Tax Services Fees.  Tax services fees consist of fees billed for professional tax services. These services also include assistance regarding federal, state, and local tax compliance.

All Other Fees.  Other fees would include fees for products and services other than the services reported above.

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The Audit Committee’s charter provides that the Audit Committee shall review and pre-approve the engagement fees and the terms of all auditing and non-auditing services to be provided by our external auditors and evaluate the effect thereof on the independence of the external auditors. All audit and tax services provided to us were reviewed and pre-approved by the Audit Committee, which concluded that the provision of such services by KPMG was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions.

PART IV

Item 15. Exhibits and Financial Statement Schedules.

The following exhibits are included, or incorporated by reference, in this Annual Report on Form 10-K:

(1) Financial Statements

The index to our financial statements is on page F-1 of this Annual Report on Form 10-K.

    (2) Financial Statement Schedule

The index to our financial schedules is on page F-1 of this Annual Report on Form 10-K.

(3) Exhibits

    The following exhibits are filed with this report. Documents other than those designated as being filed herewith are incorporated herein by reference.

Exhibit No.	Description and Method of Filing
2.1	Contribution Agreement by and among Terra Secured Income Fund, LLC, Terra Secured Income Fund 2, LLC, Terra Secured Income Fund 3, LLC, Terra Secured Income Fund 4, LLC, the registrant, and Terra Property Trust, Inc., dated January 1, 2016 (incorporated by reference to Exhibit 2.1 to the Registration Statement on Form 10 (File No. 000-56117) filed with the SEC on November 6, 2019).
2.2	Amendment No. 1 to the Contribution Agreement by and among Terra Secured Income Fund, LLC, Terra Secured Income Fund 2, LLC, Terra Secured Income Fund 3, LLC, Terra Secured Income Fund 4, LLC, the registrant, and Terra Property Trust, Inc., dated December 31, 2016 (incorporated by reference to Exhibit 2.2 to the Registration Statement on Form 10 (File No. 000-56117) filed with the SEC on November 6, 2019).
2.3	Agreement and Plan of Merger, dated February 28, 2020, by and among Terra Property Trust, Inc., Terra Property Trust 2, Inc. and Terra Secured Income Fund 7, LLC (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 000-56117) filed with the SEC on March 5, 2020).
3.1	Amended and Restated Bylaws of Terra Property Trust, Inc. (incorporated by reference to Exhibit 3.1 to the Registration Statement on Amendment No.1 to Form 10 (File No. 000-56117) filed with the SEC on December 16, 2019).
3.2	Articles of Amendment and Restatement of Terra Property Trust, Inc. (incorporated by reference to Exhibit 3.2 to the Registration Statement on Amendment No.1 to Form 10 (File No. 000-56117) filed with the SEC on December 16, 2019).
3.3	Articles of Supplementary of Terra Property Trust, Inc. Designating 12.5% Services A Redeemable Cumulative Preferred Stock (incorporated by reference to Exhibit 3.3 to the Registration Statement on Amendment No.1 to Form 10 (File No. 000-56117) filed with the SEC on December 16, 2019).
4.1 *	Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934.
4.2	Indenture, dated June 10, 2021, by and between Terra Property Trust, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 8-A (File No. 001-40496) filed with the SEC on June 14, 2021).

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Exhibit No.	Description and Method of Filing
4.3	First Supplemental Indenture, dated June 10, 2021, by and between Terra Property Trust, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form 8-A (File No. 001-40496) filed with the SEC on June 14, 2021).
4.4	Form of Global Note representing the notes (included in Exhibit 4.2).
10.1	Amended and Restated Management Agreement between Terra Property Trust, Inc., and Terra REIT Advisors, LLC, dated February 8, 2018 (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form 10 (File No. 000-56117) filed with the SEC on November 6, 2019).
10.2	Amended and Restated Voting Agreement by and among Terra Property Trust, Inc., Terra Secured Income Fund 5, LLC, Terra JV, LLC and Terra REIT Advisors, LLC, dated March 2, 2020 (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q filed with the SEC on May 15, 2020).
10.3	Stockholder Rights Agreement among Terra JV, LLC and Terra Property Trust, Inc., dated March 2, 2020 (incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q (File No. 000-56117) filed with the SEC on May 15, 2020).
10.4	Contribution Agreement by and among Terra Property Trust, Terra International Fund 3 REIT, LLC and Terra Income Fund International, dated March 2, 2020 (incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q (File No. 000-56117) filed with the SEC on May 15, 2020).
10.5	Contribution Agreement by and among Terra Property Trust, Terra International Fund 3 REIT, LLC and Terra Secured Income Fund 5 International, dated March 2, 2020 (incorporated by reference to Exhibit 10.4 to Quarterly Report on Form 10-Q (File No. 000-56117) filed with the SEC on May 15, 2020).
10.6	Indenture and Credit Agreement, dated as of September 3, 2020, by and among Terra Mortgage Capital I, LLC, as Issuer, Goldman Sachs Bank USA, as initial Class A lender, and Wells Fargo Bank, National Association, as trustee, custodian, collateral agent, loan agent and note administrator (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-56117) filed with the SEC on September 17, 2020).
10.7	Guaranty, dated as of September 3, 2020, by and among Terra Property Trust, Inc., as guarantor, for the benefit of Goldman Sachs Bank USA (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K (File No. 000-56117) filed with the SEC on September 17, 2020).
10.8	Business Loan and Security Agreement, dated as of March 12, 2021, by and among Terra Mortgage Portfolio II, LLC, as the Borrower, and Western Alliance Bank, as the Lender (incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K filed with the SEC on March 18, 2021).
10.9	Limited Guaranty, dated as of March 12, 2021, by and among Terra Property Trust, Inc., as Guarantor, for the benefit of Western Alliance Bank (incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K filed with the SEC on March 18, 2021).
10.10*	First Amendment to Loan Documents dated as of June 9, 2021, by and amount Terra Mortgage Portfolio II, LLC, as Borrower, Terra Property Trust, Inc., as Guarantor, and Western Alliance Bank, as Lender.
10.11*	Uncommitted Master Repurchase Agreement dated as of November 8, 2021, by and amount Terra Mortgage Capital III, LLC, as Seller, UBS AG, as Buyer.
10.12*	Guarantee Agreement dated as of November 8, 2021, by and amount Terra Property Trust, Inc., as Guarantor, in favor of UBS AG, as Buyer.
10.13*	Second Amendment to Loan Documents dated as of January 4, 2022, by and amount Terra Mortgage Portfolio II, LLC, as Borrower, Terra Property Trust, Inc., as Guarantor, and Western Alliance Bank, as Lender.
10.14*	Uncommitted Master Repurchase and Securities Contract Agreement dated as of February 18, 2022, by and amount Terra Mortgage Capital I, LLC, as Seller, Goldman Saches Bank USA, as Buyer.
10.15*	Guarantee Agreement dated as of February 18, 2022, by and amount Terra Property Trust, Inc., as Guarantor, in favor of Goldman Saches Bank USA, as Buyer.
21.1 *	Subsidiaries
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32**	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

60

Exhibit No.	Description and Method of Filing
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.LAB**	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF**	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	Cover Page Interactive Data File Included as Exhibit 101 (embedded within the Inline XBRL document)

______________

* Filed herewith.

** Furnished herewith.

Item 16. Form 10-K Summary.

    None.

61

Terra Property Trust, Inc.

Index to Consolidated Financial Statements

					Page
Report of Independent Registered Public Accounting Firm	KPMG LLP	New York, NY	PCAOB ID:	185	F-2
Consolidated Financial Statements:
Consolidated Balance Sheets as of December 31, 2021 and 2020					F-3
Consolidated Statements of Operations for the years ended December 31, 2021 and 2020					F-4
Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2021 and 2020					F-5
Consolidated Statements of Changes in Equity for the years ended December 31, 2021 and 2020					F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020					F-7
Notes to Consolidated Financial Statements					F-11
Schedule III — Real Estate and Accumulated Depreciation as of December 31, 2021					F-46
Schedule IV — Mortgage Loans on Real Estate as of December 31, 2021					F-47

Schedules other than those listed are omitted as they are not applicable for the required or equivalent information has been included in the consolidated financial statements or notes thereto.

F-1

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Terra Property Trust, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Terra Property Trust, Inc. and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive (loss) income, changes in equity, and cash flows for the years then ended, and the related notes and financial statement schedules III and IV (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (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 consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company’s auditor since 2016.

New York, New York

March 11, 2022

F-2

Terra Property Trust, Inc.

Consolidated Balance Sheets

	December 31,
	2021		2020
Assets
Cash and cash equivalents	$	35,783,956	$	18,607,952
Restricted cash	7,411,811		12,145,616
Cash held in escrow by lender	7,902,880		2,166,755
Marketable securities	1,310,000		1,287,500
Loans held for investment, net	457,329,582		417,986,462
Loans held for investment acquired through participation, net	12,343,732		4,294,053
Equity investment in unconsolidated investments	69,713,793		36,259,959
Real estate owned, net (Note 6)
Land, building and building improvements, net	58,325,068		63,385,339
Lease intangible assets, net	7,451,771		9,793,600
Operating lease right-of-use asset	27,394,936		16,105,888
Interest receivable	2,463,037		2,509,589
Due from related party	2,605,639		—
Other assets	3,505,953		3,934,468
Total assets	$	693,542,158	$	588,477,181
Liabilities and Equity
Liabilities:
Term loan payable, net of deferred financing fees	$	91,940,062	$	105,245,801
Unsecured notes payable, net of debt issuance cost	81,856,799		—
Repurchase agreement payable, net of deferred financing fees	43,974,608		—
Obligations under participation agreements (Note 8 )	42,232,027		71,581,897
Mortgage loan payable, net of deferred financing fees and other	32,134,295		44,117,293
Revolving line of credit payable, net of deferred financing fees	38,186,472		—
Secured borrowing	34,586,129		18,187,663
Interest reserve and other deposits held on investments	7,411,811		12,145,616
Operating lease liability	27,394,936		16,105,888
Lease intangible liabilities, net (Note 6)	9,709,710		10,249,776
Due to Manager (Note 8)	2,388,317		1,257,098
Interest payable	1,879,626		1,185,502
Accounts payable and accrued expenses	1,264,131		3,968,603
Unearned income	449,690		677,856
Other liabilities	4,289,967		429,123
Total liabilities	419,698,580		285,152,116
Commitments and contingencies (Note 10)
Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized and none issued	—		—
12.5% Series A Cumulative Non-Voting Preferred Stock at liquidation preference,    125 shares authorized and 125 shares issued and outstanding at both December    31, 2021 and 2020	125,000		125,000
Common stock, $0.01 par value, 450,000,000 shares authorized and 19,487,460    shares issued and outstanding at both December 31, 2021 and 2020, respectively	194,875		194,875
Additional paid-in capital	373,443,672		373,443,672
Accumulated deficit	(99,919,969)		(70,438,482)
Total equity	273,843,578		303,325,065
Total liabilities and equity	$	693,542,158	$	588,477,181

See notes to consolidated financial statements.

F-3

Terra Property Trust, Inc.

Consolidated Statements of Operations

	Years Ended December 31,
	2021		2020
Revenues
Interest income	$	36,743,470	$	39,392,209
Real estate operating revenue	8,894,991		10,423,563
Prepayment fee income	190,997		—
Other operating income	855,799		505,116
	46,685,257		50,320,888
Operating expenses
Operating expenses reimbursed to Manager	6,916,371		6,041,075
Asset management fee	5,134,149		4,480,706
Asset servicing fee	1,181,924		1,008,256
Provision for loan losses	10,904,163		3,738,758
Real estate operating expenses	5,003,893		4,505,119
Depreciation and amortization	3,989,114		4,635,980
Impairment charge	3,395,430		—
Professional fees	1,795,856		1,695,876
Directors fees	145,000		190,000
Other	448,503		371,444
	38,914,403		26,667,214
Operating income	7,770,854		23,653,674
Other income and expenses
Interest expense from obligations under participation agreements	(10,596,545)		(8,514,804)
Interest expense on repurchase agreement payable	(142,495)		(3,727,466)
Interest expense on mortgage loan payable	(2,449,239)		(2,976,913)
Interest expense on revolving line of credit	(911,811)		(1,398,103)
Interest expense on term loan payable	(6,835,877)		(2,137,651)
Interest expense on unsecured notes payable	(3,173,673)		—
Interest expense on secured borrowing	(1,576,502)		(633,850)
Net loss on extinguishment of obligations under participation agreements	—		(319,453)
Net unrealized gains on marketable securities	22,500		111,494
Income from equity investment in unconsolidated investments	5,925,802		38,640
Realized loss on loan repayments	(517,989)		—
Realized gains on marketable securities	129,248		1,160,162
	(20,126,581)		(18,397,944)
Net (loss) income	$	(12,355,727)	$	5,255,730
Series A preferred stock dividend declared	(15,624)		(15,624)
Net (loss) income allocable to common stock	$	(12,371,351)	$	5,240,106
(Loss) earnings per share — basic and diluted	$	(0.63)	$	0.28
Weighted-average shares — basic and diluted	19,487,460		18,813,066
Distributions declared per common share	$	0.88	$	1.16

See notes to consolidated financial statements.

F-4

Terra Property Trust, Inc.

Consolidated Statements of Comprehensive (Loss) Income

	Years Ended December 31,
	2021		2020
Comprehensive (loss) income, net of tax
Net (loss) income	$	(12,355,727)	$	5,255,730
Other comprehensive loss
Net unrealized gains on marketable securities	—		192,919
Reclassification of net realized gains on marketable securities into earnings	—		(192,919)
	—		—
Total comprehensive (loss) income	$	(12,355,727)	$	5,255,730
Series A preferred stock dividend declared	(15,624)		(15,624)
Comprehensive (loss) income attributable to common shares	$	(12,371,351)	$	5,240,106

See notes to consolidated financial statements.

F-5

Terra Property Trust, Inc.

Consolidated Statements of Changes in Equity

	Preferred Stock		12.5% Series A Cumulative Non-Voting Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income
						$0.01 Par Value
			Shares	Amount		Shares	Amount								Total equity
Balance at January 1, 2021	$	—	125	$	125,000	19,487,460	$	194,875	$	373,443,672	$	(70,438,482)	$	—	$	303,325,065
Distributions declared on common shares ($0.88 per share)	—		—	—		—	—		—		(17,110,136)		—		(17,110,136)
Distributions declared on preferred shares	—		—	—		—	—		—		(15,624)		—		(15,624)
Comprehensive loss:
Net loss	—		—	—		—	—		—		(12,355,727)		—		(12,355,727)
Balance at December 31, 2021	$	—	125	$	125,000	19,487,460	$	194,875	$	373,443,672	$	(99,919,969)	$	—	$	273,843,578

	Preferred Stock		12.5% Series A Cumulative Non-Voting Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income
						$0.01 Par Value
			Shares	Amount		Shares	Amount								Total equity
Balance at January 1, 2020	$	—	125	$	125,000	15,125,681	$	151,257	$	301,727,297	$	(54,459,821)	$	—	$	247,543,733
Issuance of common stock (Note 3)	—		—	—		4,574,470	45,745		75,334,248		—		—		75,379,993
Repurchase of common stock	—		—	—		(212,691)	(2,127)		(3,617,873)		—		—		(3,620,000)
Distributions declared on common shares ($1.16 per share)	—		—	—		—	—		—		(21,218,767)		—		(21,218,767)
Distributions declared on preferred shares	—		—	—		—	—		—		(15,624)		—		(15,624)
Comprehensive income:
Net income	—		—	—		—	—		—		5,255,730		—		5,255,730
Net unrealized gains on marketable securities	—		—	—		—	—		—		—		192,919		192,919
Reclassification of net realized gains on marketable securities    into earnings	—		—	—		—	—		—		—		(192,919)		(192,919)
Balance at December 31, 2020	$	—	125	$	125,000	19,487,460	$	194,875	$	373,443,672	$	(70,438,482)	$	—	$	303,325,065

See notes to consolidated financial statements.

F-6

Terra Property Trust, Inc.

Consolidated Statements of Cash Flows

	Years Ended December 31,
	2021		2020
Cash flows from operating activities:
Net (loss) income	$	(12,355,727)	$	5,255,730
Adjustments to reconcile net income to net cash provided by operating activities:
Paid-in-kind interest income, net	(1,000,028)		(2,937,909)
Depreciation and amortization	3,989,114		4,635,980
Provision for loan losses	10,904,163		3,738,758
Impairment charge	3,395,430		—
Lease termination fee income	—		(236,000)
Amortization of net purchase premiums on loans	61,390		57,155
Straight-line rent adjustments	(146,317)		(714,334)
Amortization of deferred financing costs	963,986		1,644,944
Amortization of discount on unsecured notes payable	248,108		—
Net loss on extinguishment of obligations under participation agreements	—		319,453
Amortization of above- and below-market rent intangibles	(392,161)		(1,027,129)
Amortization and accretion of investment-related fees, net	(264,697)		(4,140)
Amortization of above-market rent ground lease	(130,349)		(130,348)
Realized loss on loan repayments	517,989		—
Realized gains on marketable securities	(129,248)		(1,160,162)
Net unrealized gains on marketable securities	(22,500)		(111,494)
Income from equity investment in excess of distributions received	(1,276,726)		(38,640)
Changes in operating assets and liabilities:
Interest receivable	46,552		(632,790)
Due from related party	(2,605,639)		—
Other assets	574,832		(956,735)
Due to Manager	93,226		(409,927)
Unearned income	(215,075)		(490,233)
Interest payable	694,124		109,271
Accounts payable and accrued expenses	(2,704,472)		2,245,242
Other liabilities	3,860,844		(1,229,232)
Net cash provided by operating activities	4,106,819		7,927,460
Cash flows from investing activities:
Origination and purchase of loans	(252,437,733)		(108,488,411)
Proceeds from repayments of loans	196,780,456		66,144,729
Purchase of equity interests in unconsolidated investments	(32,177,108)		(35,862,692)
Purchase of marketable securities	(6,479,148)		(6,039,567)
Proceeds from sale of marketable securities	6,608,396		6,023,723
Net cash used in investing activities	(87,705,137)		(78,222,218)

F-7

Terra Property Trust, Inc.

Consolidated Statements of Cash Flows (Continued)

	Years Ended December 31,
	2021		2020
Cash flows from financing activities:
Repayments of obligations under participation agreements	(101,722,161)		(5,855,759)
Proceeds from issuance of unsecured notes payable, net of discount	82,464,844		—
Proceeds from obligations under participation agreements	71,682,634		22,498,765
Proceeds from borrowings under repurchase agreement	44,569,600		22,860,134
Proceeds from borrowings under revolving line of credit	38,575,895		35,000,000
Distributions paid	(17,125,760)		(21,234,391)
Repayment of borrowings under the term loan	(16,585,001)		—
Proceeds from secured borrowing	16,239,256		18,281,848
Repayment of mortgage principal	(12,057,533)		(594,255)
Proceeds from borrowings under the term loan	2,764,020		107,584,451
Change in interest reserve and other deposits held on investments	(4,733,805)		(6,396,547)
Payment of financing costs	(2,295,347)		(2,361,369)
Repayment of borrowings under repurchase agreement	—		(103,994,570)
Repayment of borrowings under revolving line of credit	—		(35,000,000)
Payment for repurchase of common stock	—		(3,620,000)
Proceeds from issuance of common stock in the Merger	—		16,897,074
Proceeds from issuance of common stock to Terra Offshore REIT	—		8,600,000
Net cash provided by financing activities	101,776,642		52,665,381
Net increase in cash, cash equivalents and restricted cash	18,178,324		(17,629,377)
Cash, cash equivalents and restricted cash at beginning of year	32,920,323		50,549,700
Cash, cash equivalents and restricted cash at end of year (Note 2)	$	51,098,647	$	32,920,323

	Years Ended December 31,
	2021		2020
Supplemental Disclosure of Cash Flows Information:
Cash paid for interest	$	22,219,386	$	16,317,378

See notes to consolidated financial statements.

F-8

Terra Property Trust, Inc.

Consolidated Statements of Cash Flows (Continued)

Supplemental Non-Cash Financing Activities:

Merger

    On February 28, 2020, Terra Property Trust, Inc. (the “Company”) entered into certain Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Terra Property Trust 2, Inc. (“TPT2”) and Terra Secured Income Fund 7, LLC (“Terra Fund 7”), the sole stockholder of TPT2, pursuant to which, effective March 1, 2020, TPT2 was merged with and into the Company, with the Company continuing as the surviving corporation (the “Merger”). In connection with the Merger, the Company issued 2,116,785.76 shares of common stock, par value $0.01 per share, to Terra Fund 7 (Note 3). The following table presents a summary of the consideration exchanged and settlement of the Company’s obligations under participation agreements as a result of the Merger:

Total Consideration
Equity issued in the Merger	$	34,630,615
Proceeds from equity issued in the Merger	16,897,074
	$	17,733,541
Net assets exchanged
Settlement of obligations under participation agreements	$	17,688,741
Interest receivable	134,543
Other assets	18,384
Accounts payable and accrued expenses	(57,433)
Due to Manager	(50,694)
	$	17,733,541

Non-cash Proceeds from Issuance of Common Stock to Terra Offshore REIT

    In addition, on March 2, 2020, the Company entered into two separate contribution agreements, (i) by and among the Company, Terra Offshore Funds REIT, LLC (the “Terra Offshore REIT”) and Terra Income Fund International (“TIFI”), and (ii) by and among the Company, Terra Offshore REIT and Terra Secured Income Fund 5 International (“Fund 5 International”), pursuant to which the Company issued an aggregate of 2,457,684.59 shares of common stock in exchange for the settlement of $32.1 million of participation interests in loans held by the Company, $8.6 million in cash, and other net working capital (“Issuance of Common Stock to Terra Offshore REIT”) (Note 3). The following table presents a summary of the consideration exchanged and settlement of the Company’s obligations under participation agreements as a result of the Issuance of Common Stock to Terra Offshore REIT:

Total Consideration
Equity issued to Terra Offshore REIT	$	40,749,378
Proceeds from equity issued to Terra Offshore REIT	8,600,000
	$	32,149,378
Net Assets exchanged
Settlement of obligations under participation agreements	$	32,112,257
Interest receivable	270,947
Due to Manager	(233,826)
Net assets acquired excluding cash and cash equivalents	$	32,149,378

F-9

Terra Property Trust, Inc.

Consolidated Statements of Cash Flows (Continued)

Supplemental Non-Cash Investing Activities:

Lease Termination

In June 2020, the Company received a notice from a tenant occupying a portion of the office building that the Company acquired in July 2018 via foreclosure of their intention to terminate the lease (Note 6). The following table presents a summary of assets received and written off in connection with the lease termination effective September 4, 2020:

Lease Termination Fees:
Cash	$	142,620
Furniture & Fixture	236,000
	$	378,620
Assets and Liabilities Write-offs:
In-place lease intangible assets	$	869,694
Below-market rent liabilities		(616,392)
Rent receivable	125,318
	$	378,620

        

See notes to consolidated financial statements.

F-10

Terra Property Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2021

Note 1. Business

    Terra Property Trust, Inc. (and, together with its consolidated subsidiaries, the “Company” or “Terra Property Trust”) was incorporated under the general corporation laws of the State of Maryland on December 31, 2015. Terra Property Trust is a real estate credit focused company that originates, structures, funds and manages commercial real estate investments, including mezzanine loans, first mortgage loans, subordinated mortgage loans and preferred equity investments. The Company’s loans finance the acquisition, construction, development or redevelopment of quality commercial real estate in the United States. The Company focuses on the origination of middle market loans in the approximately $10 million to $50 million range, to finance properties in primary and secondary markets.

    On January 1, 2016, Terra Secured Income Fund 5, LLC (“Terra Fund 5”), the Company’s then parent, contributed its consolidated portfolio of net assets to the Company pursuant to a contribution agreement in exchange for shares of the Company’s common stock. Upon receipt of the contribution of the consolidated portfolio of net assets from Terra Fund 5, the Company commenced its operations on January 1, 2016. On March 2, 2020, the Company engaged in a series of transactions pursuant to which the Company issued an aggregate of 4,574,470.35 shares of its common stock in exchange for the settlement of an aggregate of $49.8 million of participation interests in loans held by the Company, cash of $25.5 million and other working capital. As of December 31, 2021, Terra JV, LLC (“Terra JV”) held 87.4% of the issued and outstanding shares of the Company's common stock with the remainder held by Terra Offshore REIT (Note 3).

    The Company has elected to be taxed, and to qualify annually thereafter, as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), commencing with the taxable year ended December 31, 2016. As a REIT, the Company is not subject to federal income taxes on income and gains distributed to the stockholders as long as certain requirements are satisfied, principally relating to the nature of income and the level of distributions, as well as other factors. The Company also operates its business in a manner that permits it to maintain its exemption from registration as an “investment company” under the Investment Company Act of 1940, as amended.

    The Company’s investment activities are externally managed by Terra REIT Advisors, LLC (“Terra REIT Advisors” or the “Manager”), a subsidiary of the Company’s sponsor, Terra Capital Partners, LLC (“Terra Capital Partners”), pursuant to a management agreement (the “Management Agreement”), under the oversight of the Company’s board of directors (Note 8). The Company does not currently have any employees and does not expect to have any employees. Services necessary for the Company’s business are provided by individuals who are employees of the Manager or by individuals who were contracted by the Company or by the Manager to work on behalf of the Company pursuant to the terms of the Management Agreement. On April 1, 2021, Mavik Capital Management, LP (“Mavik”), an entity controlled by Vikram S. Uppal, the Chief Executive Officer of the Company, completed a series of related transactions that resulted in all of the outstanding interests in Terra Capital Partners, being acquired by Mavik for a combination of cash and interests in Mavik (the “Recapitalization”). No amendments or other modifications were made to the Management Agreement in connection with the Recapitalization, and the Manager and its personnel continue to serve as the external manager of the Company pursuant to the terms of the Management Agreement.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

    The consolidated financial statements include all of the Company’s accounts and those of its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation.

The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (“VIE”) or voting interest model. The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model. Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity.

The Company accounts for investments in which it has significant influence but not a controlling financial interest using the equity method of accounting (see Note 5).

F-11

Notes to Consolidated Financial Statements

VIE Model

An entity is considered to be a VIE if any of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) the holders of the equity investment at risk, as a group, lack either the direct or indirect ability through voting rights or similar rights to make decisions that have a significant effect on the success of the entity or the obligation to absorb the entity’s expected losses or right to receive the entity’s expected residual returns, or (c) the voting rights of some equity investors are disproportionate to their obligation to absorb losses of the entity, their rights to receive returns from an entity, or both and substantially all of the entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights.

Under the VIE model, limited partnerships are considered a VIE unless the limited partners hold substantive kick-out or participating rights over the general partner. The Company consolidates entities that are VIEs when the Company determines it is the primary beneficiary. Generally, the primary beneficiary of a VIE is a reporting entity that has (a) the power to direct the activities that most significantly affect the VIE’s economic performance, and (b) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE.

Loans Held for Investment

    The Company originates, acquires, and structures real estate-related loans generally to be held to maturity. Loans held for investment are carried at the principal amount outstanding, adjusted for the accretion of discounts on investments and exit fees, and the amortization of premiums on investments and origination fees. The Company’s preferred equity investments, which are economically similar to mezzanine loans and subordinate to any loans but senior to common equity, are accounted for as loans held for investment. Loans are carried at cost less allowance for loan losses.

Allowance for Loan Losses

    The Company’s loans are typically collateralized by either the sponsors’ equity interest in the real estate properties or the underlying real estate properties. As a result, the Company regularly evaluates the extent and impact of any credit migration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan-by-loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations and/or reserve balances are sufficient to cover the debt service requirements currently and into the future; (ii) the ability of the borrower to refinance the loan; and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of the sponsor as well as its competency in managing and operating the real estate property. In addition, the Company considers the overall economic environment, real estate sector, and geographic sub-market in which the borrower operates. Such analyses are completed and reviewed by asset management and finance personnel, who utilize various data sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, the capitalization and discount rates; (ii) site inspections; and (iii) current credit spreads and discussions with market participants.

    The Manager performs a quarterly evaluation for possible impairment of the Company’s portfolio of loans. A loan is impaired if it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan. Impairment is measured based on the present value of expected future cash flows or the fair value of the collateral if the loan is collateral dependent. Upon measurement of impairment, the Company records an allowance to reduce the carrying value of the loan with a corresponding charge to net income.

    In conjunction with the quarterly evaluation of loans not considered impaired, the Manager assesses the risk factors of each loan and assigns each loan a risk rating between 1 and 5, which is an average of the numerical ratings in the following categories: (i) sponsor capability and financial condition; (ii) loan and collateral performance relative to underwriting; (iii) quality and stability of collateral cash flows and/or reserve balances; and (iv) loan to value. Based on a 5-point scale, the Company’s loans are rated “1” through “5”, from less risk to greater risk, as follows:

Risk Rating	Description
1	Very low risk
2	Low risk
3	Moderate/average risk
4	Higher risk
5	Highest risk

F-12

Notes to Consolidated Financial Statements

    The Company records an allowance for loan losses equal to (i) 1.5% of the aggregate carrying amount of loans rated as a “4”, plus (ii) 5% of the aggregate carrying amount of loans rated as a “5”, plus (iii) impaired loan reserves, if any.

    There may be circumstances where the Company modifies a loan by granting the borrower a concession that it might not otherwise consider when a borrower is experiencing financial difficulty or is expected to experience financial difficulty in the foreseeable future. Such concessionary modifications are classified as troubled debt restructurings (“TDR”s) unless the modification solely results in a delay in a payment that is insignificant. Loans classified as TDRs are considered impaired loans for reporting and measurement purposes.

Equity Investment in Unconsolidated Investments

The Company accounts for its equity interests in unconsolidated investments under the equity method of accounting, i.e., at cost, increased or decreased by its share of earnings or losses, less distributions, plus contributions and other adjustments required by equity method accounting.

The Company evaluates its equity investment unconsolidated investments on a periodic basis to determine if there are any indicators that the value of its equity investments may be impaired and whether or not that impairment is other-than-temporary. To the extent an impairment has occurred and is determined to be other-than-temporary, the Company measures the charge as the excess of the carrying value of its investment over its estimated fair value, which is determined by calculating its share of the estimated fair market value of the underlying net assets based on the terms of the applicable partnership or joint venture agreements.

Marketable Securities

    The Company from time to time invests in short term debt and equity securities. These securities are classified as available-for-sale and are carried at fair value. Changes in the fair value of equity securities are recognized in earnings. Changes in the fair value of debt securities are reported in other comprehensive income until a gain or loss on the securities is realized.

Real Estate Owned, Net

    Real estate acquired is recorded at its estimated fair value at acquisition and is shown net of accumulated depreciation and impairment charges.

    Acquisition of properties generally are accounted for as asset acquisitions. Under asset acquisition accounting, the costs to acquire real estate, including transaction costs, are accumulated and then allocated to individual assets and liabilities acquired based upon their relative fair value. The Company allocates the purchase price of its real estate acquisitions to land, building, tenant improvements, acquired in-place leases, intangibles for the value of any above or below market leases at fair value and to any other identified intangible assets or liabilities. The Company amortizes the value allocated to in-place leases over the remaining lease term, which is reported in depreciation and amortization expense on its consolidated statements of operations. The value allocated to above or below market leases are amortized over the remaining lease term as an adjustment to rental income.

    Real estate assets are depreciated using the straight-line method over their estimated useful lives: buildings and improvements - not to exceed 40 years, and tenant improvements - shorter of the lease term or life of the asset. Ordinary repairs and maintenance which are not reimbursed by the tenants are expensed as incurred. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their estimated useful life.

    Management reviews the Company’s real estate for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The review of recoverability is based on estimated future cash flows and the estimated liquidation value of such real estate assets, and provide for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the real estate assets. If impaired, the real estate asset will be written down to its estimated fair value.

Leases

    The Company determines if an arrangement is a lease at inception. Operating leases in which the Company is the lessee are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets. 

F-13

Notes to Consolidated Financial Statements

    ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s lease typically does not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made in advance and excludes lease incentives if there were any. The Company’s lease term may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Revenue Recognition

    Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

    Interest Income: Interest income is accrued based upon the outstanding principal amount and contractual terms of the loans and preferred equity investments that the Company expects to collect and it is accrued and recorded on a daily basis. Discounts and premiums on investments purchased are accreted or amortized over the expected life of the respective loan using the effective yield method, and are included in interest income in the consolidated statements of operations. Loan origination fees and exit fees, net of portions attributable to obligations under participation agreements, are capitalized and amortized or accreted to interest income over the life of the investment using the effective yield method. Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in the opinion of the Manager, recovery of income and principal becomes doubtful. Outstanding interest receivable is assessed for recoverability. Interest is then recorded on the basis of cash received until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability.

    The Company holds loans in its portfolio that contain paid-in-kind (“PIK”) interest provisions. The PIK interest, which represents contractually deferred interest that is added to the principal balance that is due at maturity, is recorded on the accrual basis.

    Real Estate Operating Revenues: Real estate operating revenue is derived from leasing of space to various types of tenants. The leases are for fixed terms of varying length and generally provide for annual rent increases and expense reimbursements to be paid in monthly installments. Lease revenue, or rental income from leases, is recognized on a straight-line basis over the term of the respective leases. Additionally, the Company recorded above- and below-market lease intangibles, which are included in real estate owned, net, in connection with the acquisition of the real estate properties. These intangible assets and liabilities are amortized to lease revenue over the remaining contractual lease term.

    Other Revenues: Prepayment fee income is recognized as prepayments occur. All other income is recognized when earned.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments, with original maturities of ninety days or less when purchased, as cash equivalents. Cash and cash equivalents are exposed to concentrations of credit risk. The Company maintains all of its cash at financial institutions which, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation.

    Restricted cash represents cash held as additional collateral by the Company on behalf of the borrowers related to the investments in loans or preferred equity instruments for the purpose of such borrowers making interest and property-related operating payments. Restricted cash is not available for general corporate purposes. The related liability is recorded in “Interest reserve and other deposits held on investments” on the consolidated balance sheets.

    Cash held in escrow by lender represents amounts funded to an escrow account for debt services and tenant improvements.

F-14

Notes to Consolidated Financial Statements

    The following table provides a reconciliation of cash, cash equivalents and restricted cash in the Company’s consolidated balance sheets to the total amount shown in its consolidated statements of cash flows:

	December 31,
	2021		2020
Cash and cash equivalents	$	35,783,956	$	18,607,952
Restricted cash	7,411,811		12,145,616
Cash held in escrow by lender	7,902,880		2,166,755
Total cash, cash equivalents and restricted cash shown in the consolidated    statements of cash flows	$	51,098,647	$	32,920,323

 Participation Interests

Loan participations from the Company which do not qualify for sale treatment remain on the Company’s consolidated balance sheets and the proceeds are recorded as obligations under participation agreements. For the investments for which participation has been granted, the interest earned on the entire loan balance is recorded within “Interest income” and the interest related to the participation interest is recorded within “Interest expense from obligations under participation agreements” in the consolidated statements of operations. Interest expense from obligations under participation agreement is reversed when recovery of interest income on the related loan becomes doubtful. See “Obligations under Participation Agreements” in Note 9 for additional information.

Term Loan

    The Company finances certain of its senior loans through borrowings under an indenture and credit agreement. The Company accounts for the borrowings as a term loan, which is carried at the contractual amount (cost), net of unamortized deferred financing fees.

Repurchase Agreement

The Company financed certain of its senior loans through repurchase transactions under a master repurchase agreement. The Company accounted for the repurchase transactions as secured borrowing transactions, which are carried at their contractual amounts (cost), net of unamortized deferred financing fees.

Fair Value Measurements

    United States generally accepted accounting principles (“U.S. GAAP”) establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The Company has not elected the fair value option for its financial instruments, including loans held for investment, loans held for investment acquired through participation, obligations under participation agreements, secured borrowing, unsecured notes, mortgage loan payable, term loan payable, repurchase agreement payment and revolving line of credit. Such financial instruments are carried at cost, less impairment, where applicable. Marketable securities are financial instruments that are reported at fair value.

Deferred Financing Costs

    Deferred financing costs represent fees and expenses incurred in connection with obtaining financing for investments. These costs are presented in the consolidated balance sheets as a direct deduction of the debt liability to which the costs pertain. These costs are amortized using the effective interest method and are included in interest expense on the applicable borrowings in the consolidated statements of operations over the life of the borrowings.

Income Taxes

    The Company has elected to be taxed as a REIT under the Internal Revenue Code commencing with the taxable year ended December 31, 2016. In order to qualify as a REIT, the Company is required, among other things, to distribute at least 90% of its REIT net taxable income to the stockholders and meet certain tests regarding the nature of its income and assets. As a REIT, the Company is not subject to federal income taxes on income and gains distributed to the stockholders as long as certain requirements are satisfied, principally relating to the nature of income and the level of distributions, as well as other factors. If the Company fails to continue to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal and state income taxes at regular corporate rates (including any

F-15

Notes to Consolidated Financial Statements

applicable alternative minimum tax for taxable years before 2018) beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years. Any gains from the sale of foreclosed properties within two years are subject to U.S. federal and state income taxes at regular corporate rates. As of December 31, 2021, the Company has satisfied all the requirements for a REIT.

The Company did not have any uncertain tax positions that met the recognition or measurement criteria of Accounting Standards Codification (“ASC”) 740-10-25, Income Taxes, nor did the Company have any unrecognized tax benefits as of the periods presented herein. The Company recognizes interest and penalties, if any, related to unrecognized tax liabilities as income tax expense in its consolidated statements of operations. For the years ended December 31, 2021 and 2020, the Company did not incur any interest or penalties. Although the Company files federal and state tax returns, its major tax jurisdiction is federal. The Company’s 2018-2020 federal tax returns remain subject to examination by the Internal Revenue Service.

Earnings Per Share

    The Company has a simple equity capital structure with only common stock and preferred stock outstanding. As a result, earnings per share, as presented, represent both basic and dilutive per-share amounts for the periods presented in the consolidated financial statements. Income per basic share of common stock is calculated by dividing net income allocable to common stock by the weighted-average number of shares of common stock issued and outstanding during such period.

Use of Estimates

    The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates, and those differences could be material.

The coronavirus (“COVID-19”) pandemic has had a significant impact on local, national and global economies and has resulted in a world-wide economic slowdown. However, after two years into the COVID-19 pandemic, the real estate market has started to recover from the dislocation it experienced over the past year. A strong pace of vaccination along with aggressive fiscal stimulus, has improved the outlook for the real estate market. The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its investments and operations. The Company believes the estimates and assumptions underlying its financial statements are reasonable and supportable based on the information available as of December 31, 2021; however, the extent to which the COVID-19 pandemic may impact the Company’s investments and operations going forward will depend on future developments, which are highly uncertain and cannot be predicted with confidence. These developments include the duration of the outbreak, the impact of the global vaccination effort, any new strains of the virus that are resistant to available vaccines, the impact of government stimulus, new information that may emerge concerning the severity of the COVID-19 pandemic, and actions taken by federal, state and local agencies as well as the general public to contain the COVID-19 pandemic or treat its impact, among others. Accordingly, any estimates and assumptions as of December 31, 2021 are inherently less certain than they would be absent the current and potential impacts of the COVID-19 pandemic.

Segment Information

    The Company’s primary business is originating, acquiring and structuring real estate-related loans related to high quality commercial real estate. From time to time, the Company may acquire real estate encumbering the senior loans through foreclosure. However, management treats the operations of the real estate acquired through foreclosure as the continuation of the original senior loans. The Company operates in a single segment focused on mezzanine loans, other loans and preferred equity investments, and to a lesser extent, owning and managing real estate.

Recent Accounting Pronouncements

    In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. In April 2019, the FASB issued additional amendments to clarify the scope of ASU 2016-13 and address issues related to accrued interest receivable balances, recoveries, variable interest rates and prepayments, among other things. In May 2019, the FASB issued ASU 2019-05 — Targeted Transition Relief, which provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. In October 2019, the FASB decided that for smaller reporting companies, ASU 2016-13 and related amendments will be effective for fiscal years beginning

F-16

Notes to Consolidated Financial Statements

after December 15, 2022, including interim periods within those fiscal years. The Company meets the definition of a smaller reporting company under the regulation of the Securities and Exchange Commission. As such, the Company will adopt this ASU and related amendments on January 1, 2023. Management is currently evaluating the impact this change will have on the Company’s consolidated financial statements and disclosures.

    London Interbank Offered Rate (“LIBOR”) is a benchmark interest rate referenced in a variety of agreements that are used by all types of entities. In July 2017, the U.K. Financial Conduct Authority, which regulates the LIBOR administrator, ICE Benchmark Administration Limited (“IBA”), announced that it would cease to compel banks to participate in setting LIBOR as a benchmark by the end of 2021, which has subsequently been delay to June 30, 2023. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) — Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition (“ASU 2021-01”). ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. In the event LIBOR is unavailable, the Company’s investment documents provide for a substitute index, on a basis generally consistent with market practice, intended to put the Company in substantially the same economic position as LIBOR. As a result, the Company does not expect the reference rate reform and the adoption of ASU 2020-04 and ASU 2021-01 to have a material impact on its consolidated financial statements and disclosures.

Note 3. Merger and Issuance of Common Stock to Terra Offshore REIT

Merger

    On February 28, 2020, the Company entered into the Merger Agreement pursuant to which TPT2 was merged with and into the Company, with the Company continuing as the surviving corporation, effective March 1, 2020. In connection with the Merger, each share of common stock, par value $0.01 per share, of TPT2 issued and outstanding immediately prior to the effective time of the Merger was converted into the right to receive from the Company a number of shares of common stock, par value $0.01 per share, of the Company equal to an exchange ratio, which was 1.2031. The exchange ratio was based on the relative net asset values of the Company and TPT2 as of December 31, 2019 as adjusted to reflect changes in the net working capital of each of the Company and TPT2 during the period from January 1, 2020 through March 1, 2020, the effective time for the Merger. For purposes of determining the respective fair values of the Company and TPT2, the value of the loans (or participation interests therein) held by each of the Company and TPT2 was the value of such loans (or participation interests) as set forth in the audited financial statements of the Company as of and for the year ended December 31, 2019. As a result, Terra Fund 7, the sole stockholder of TPT2, received 2,116,785.76 shares of common stock of the Company as consideration in the Merger. The shares of common stock were issued in a private placement in reliance on Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations promulgated thereunder.

    The following table presents a summary of the consideration exchanged and settlement of the Company’s obligations under participation agreements as a result of the Merger:

Total Consideration
Equity issued in the Merger	$	34,630,615
	$	34,630,615
Net Assets of TPT2 Received in the Merger
Loans held for investment acquired through participation	$	17,688,741
Cash and cash equivalents	16,897,074
Interest receivable	134,543
Other assets	18,384
Accounts payable and accrued expenses	(57,433)
Due to Manager	(50,694)
Total identifiable net assets	$	34,630,615

    The fair value of the 2,116,785.76 shares of the Company’s stock issued in the Merger as consideration paid for TPT2 was derived from the fair value per share of the Company as of December 31, 2019 as adjusted to reflect the change in the net

F-17

Notes to Consolidated Financial Statements

working capital of the Company during the period from January 1, 2020 through March 1, 2020, the effective time of the Merger.

    In connection with the Merger, the size of the board of directors of the Company was reduced from eight directors to four directors, with Andrew M. Axelrod, Vikram S. Uppal, Roger H. Beless and Michael L. Evans continuing as directors of the Company. On November 10, 2021, Andrew M. Axelrod, resigned as the Company’s director effectively immediately. Following Mr. Axelrod’s resignation, the size of the board of directors of the Company was reduced from four directors to three directors.

Issuance of Common Stock to Terra Offshore REIT

    In addition, on March 2, 2020, the Company entered into two separate contribution agreements, one by and among the Company, Terra Offshore REIT and TIFI, and another by and among the Company, Terra Offshore REIT and Fund 5 International, pursuant to which the Company issued 2,457,684.59 shares of common stock of the Company to Terra Offshore REIT in exchange for the settlement of $32.1 million of participation interests in loans also held by the Company, $8.6 million in cash and other net working capital. The shares of common stock were issued in a private placement in reliance on Section 4(a)(2) under the Securities Act and the rules and regulations promulgated thereunder.

    The fair value of the 2,457,684.59 shares of the Company’s stock issued in the transaction as consideration paid for Terra Offshore REIT was derived from the fair value per share of the Company as of December 31, 2019, which was the most recently determined fair value per share of the Company.

    The following table presents a summary of the consideration exchanged and settlement of the Company’s obligations under participation agreements as a result of the Issuance of Common Stock to Terra Offshore REIT:

Total Consideration
Equity issued to Terra Offshore REIT	$	40,749,378
	$	40,749,378
Net Assets of Terra Offshore REIT Received
Investments through participation interest, at fair value	$	32,112,257
Cash and cash equivalents	8,600,000
Interest receivable	270,947
Due to Manager	(233,826)
Total identifiable net assets	$	40,749,378

On April 29, 2020, the Company repurchased 212,691 shares of common stock at a price of $17.02 per share that the Company had previously sold to Terra Offshore REIT on September 30, 2019 (Note 8).

Terra JV, LLC

    Prior to the completion of the Merger and the Issuance of Common Stock to Terra Offshore REIT transactions described above, Terra Fund 5 owned approximately 98.6% of the issued and outstanding shares of the Company’s common stock indirectly through its wholly owned subsidiary, Terra JV, of which Terra Fund 5 was the sole managing member, and the remaining issued and outstanding shares of the Company’s common stock were owned by Terra Offshore REIT.

    As described above, the Company acquired TPT2 in the Merger and, in connection with such transaction, Terra Fund 7 contributed the shares of the Company’s common stock received as consideration in the Merger to Terra JV and became a co-managing member of Terra JV pursuant to the amended and restated operating agreement of Terra JV, dated March 2, 2020 (the “JV Agreement”). The JV Agreement and related stockholders agreement between Terra JV and the Company, dated March 2, 2020, provide for the joint approval of Terra Fund 5 and Terra Fund 7 with respect to certain major decisions that are taken by Terra JV and the Company.

    On March 2, 2020, the Company, Terra Fund 5, Terra JV and Terra REIT Advisors also entered into the Amended and Restated Voting Agreement (the “Voting Agreement”), pursuant to which Terra Fund 5 assigned its rights and obligations under the Voting Agreement to Terra JV. Consistent with the original voting agreement dated February 8, 2018, for the period that Terra REIT Advisors remains the external manager of the Company, Terra REIT Advisors will have the right to nominate

F-18

Notes to Consolidated Financial Statements

two individuals to serve as directors of the Company and, until Terra JV no longer holds at least 10% of the outstanding shares of the Company’s common stock, Terra JV will have the right to nominate one individual to serve as a director of the Company.

    As of December 31, 2021, Terra JV owns 87.4% of the issued and outstanding shares of the Company’s common stock with the remainder held by Terra Offshore REIT, and Terra Fund 5 and Terra Fund 7 own an 87.6% and 12.4% interest, respectively, in Terra JV.

Net Loss on Extinguishment of Obligations Under Participation Agreements

    As discussed in Note 7, in the normal course of business, the Company may enter into participation agreements with related parties, primarily other affiliated funds managed by the Manager, and to a lesser extent, unrelated parties. The obligations under participation agreements were released as a result of the Merger and the Issuance of Common Stock to Terra Offshore REIT. In connection with these transactions, the Company recognized a net loss of $0.3 million for the three months ended March 31, 2020, which was primarily related to transaction costs incurred in connection with both transactions.

Note 4. Loans Held for Investment

Portfolio Summary

The following table provides a summary of the Company’s loan portfolio as of December 31, 2021 and 2020:

	December 31, 2021									December 31, 2020
	Fixed Rate			Floating Rate (1)(2)(3)			Total			Fixed Rate			Floating Rate (1)(2)(3)			Total
Number of loans	6			15			21			6			14			20
Principal balance	$	74,880,728		$	405,270,423		$	480,151,151		$	56,335,792		$	367,838,966		$	424,174,758
Carrying value	$	75,520,212		$	394,153,102		$	469,673,314		$	56,464,310		$	365,816,205		$	422,280,515
Fair value	$	75,449,410		$	391,752,209		$	467,201,619		$	56,284,334		$	363,122,860		$	419,407,194
Weighted-average coupon rate	12.39		%	7.01		%	7.85		%	12.17		%	7.95		%	8.51		%
Weighted-average remaining  term (years)	1.93			1.45			1.53			1.78			1.44			1.48

_______________

(1)These loans pay a coupon rate of LIBOR plus a fixed spread. Coupon rate shown was determined using LIBOR of 0.10% and 0.14% as of December 31, 2021 and 2020, respectively.

(2)As of December 31, 2021 and 2020, amounts included $163.1 million and $184.2 million of senior mortgages used as collateral for $93.8 million and $107.6 million of borrowings under a term loan, respectively (Note 9). As of December 31, 2021, amounts also included $60.1 million of senior mortgages used as collateral for $38.6 million of borrowings under a revolving line of credit and $67.4 million of senior mortgages used as collateral for $44.6 million of borrowings under a repurchase agreement. Borrowings under the term loan bear interest at an annual rate of LIBOR plus 4.25% with a LIBOR floor of 1.00%. Borrowings under the revolving line of credit bear interest at a minimum rate of 4.0%. Borrowings under the repurchase agreement bears interest at an annual rate of LIBOR plus an applicable spread which ranges from 1.60% to 1.85%.

(3)As of December 31, 2021 and 2020, thirteen and twelve of these loans, respectively, are subject to a LIBOR floor.

F-19

Notes to Consolidated Financial Statements

Lending Activities

The following table presents the activities of the Company’s loan portfolio for the years ended December 31, 2021 and 2020:

	Loans Held for Investment		Loans Held for Investment through Participation Interests		Total
Balance, January 1, 2021	$	417,986,462	$	4,294,053	$	422,280,515
New loans made	240,130,367		12,307,366		252,437,733
Principal repayments received	(192,530,456)		(4,250,000)		(196,780,456)
PIK interest (1)	1,955,109		—		1,955,109
Net amortization of premiums on loans	(61,390)		—		(61,390)
Accrual, payment and accretion of investment-related fees and other,    net	1,405,206		(7,687)		1,397,519
Realized loss on loan repayments (2)(3)	(651,553)		—		(651,553)
Provision for loan losses	(10,904,163)		—		(10,904,163)
Balance, December 31, 2021	$	457,329,582	$	12,343,732	$	469,673,314

	Loans Held for Investment		Loans Held for Investment through Participation Interests		Total
Balance, January 1, 2020	$	375,462,222	$	3,150,546	$	378,612,768
New loans made	107,359,299		1,129,112		108,488,411
Principal repayments received	(66,144,729)		—		(66,144,729)
PIK interest (1)	4,442,759		—		4,442,759
Net amortization of premiums on loans	(61,391)		—		(61,391)
Accrual, payment and accretion of investment-related fees, net	667,060		14,395		681,455
Provision for loan losses	(3,738,758)		—		(3,738,758)
Balance, December 31, 2020	$	417,986,462	$	4,294,053	$	422,280,515

_______________

(1)Certain loans in the Company’s portfolio contain PIK interest provisions. The PIK interest represents contractually deferred interest that is added to the principal balance. PIK interest related to obligations under participation agreements amounted to $1.0 million and $1.5 million for the years ended December 31, 2021 and 2020, respectively.

(2)On September 2, 2021, the Company foreclosed on a hotel property encumbered by a first mortgage and the related subordinated mezzanine loan, both of which were held by the Company, with an aggregate principal balance $14.6 million. On September 23, 2021, the hotel property was sold to a third party for $13.8 million. The net proceeds from the sale, together with a payment under a contractual guarantee of $0.8 million from the borrower, were used to pay off both loans in full. In connection with the loan repayment, the related obligation under participation agreement of $6.4 million was simultaneously satisfied. In connection with the loan repayment, the Company recorded a loss of $0.4 million related to the write-off of the interest accrued but uncollected in the third quarter of 2021, excluding the amount attributable to obligations under participation agreements of $0.1 million.

(3)Amount also included realized loss of $0.3 million related to the TDR transaction described below.

F-20

Notes to Consolidated Financial Statements

Portfolio Information

    The tables below detail the types of loans in the Company’s loan portfolio, as well as the property type and geographic location of the properties securing these loans as of December 31, 2021 and 2020:

	December 31, 2021						December 31, 2020
Loan Structure	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
First mortgages	$	345,454,454	$	348,101,455	74.0	%	$	254,042,847	$	255,093,989	60.5	%
Preferred equity investments	92,252,340		92,400,572		19.7	%	141,590,632		142,002,144		33.6	%
Mezzanine loans	17,444,357		17,622,804		3.8	%	28,541,279		28,923,140		6.8	%
Credit facility	25,000,000		25,206,964		5.4	%	—		—		—	%
Allowance for loan losses	—		(13,658,481)		(2.9)	%	—		(3,738,758)		(0.9)	%
Total	$	480,151,151	$	469,673,314	100.0	%	$	424,174,758	$	422,280,515	100.0	%

	December 31, 2021						December 31, 2020
Property Type	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
Office	$	221,596,870	$	222,426,872	47.3	%	$	182,698,225	$	183,053,751	43.3	%
Multifamily	80,805,787		81,835,756		17.4	%	150,873,173		151,768,347		35.9	%
Hotel - full/select service	56,847,381		57,395,682		12.2	%	49,142,809		49,393,251		11.7	%
Industrial	32,000,000		32,206,964		6.9	%	7,000,000		7,000,000		1.7	%
Student housing	31,000,000		31,565,670		6.7	%	3,000,000		3,204,375		0.8	%
Infill land	28,960,455		28,923,827		6.2	%	10,442,567		10,537,512		2.5	%
Mixed use	28,940,658		28,977,024		6.2	%	16,767,984		16,767,984		4.0	%
Hotel - extended stay	—		—		—	%	4,250,000		4,294,053		1.0	%
Allowance for loan losses	—		(13,658,481)		(2.9)	%	—		(3,738,758)		(0.9)	%
Total	$	480,151,151	$	469,673,314	100.0	%	$	424,174,758	$	422,280,515	100.0	%

During the first quarter of 2021, the Company reclassified the property types of collateral on certain loans to multifamily to better reflect the tenant mix of each property. Additionally, the Company categorized hotel properties further to hotel - full/selected service and hotel - extended stay. The prior period amounts have been reclassified to conform to the current period presentation.

	December 31, 2021						December 31, 2020
Geographic Location	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
United States
California	$	234,968,151	$	237,015,597	50.4	%	$	200,279,688	$	200,990,328	47.6	%
New York	92,252,340		92,400,572		19.7	%	79,187,004		79,310,276		18.8	%
Georgia	53,289,288		53,536,884		11.4	%	74,116,787		74,505,752		17.6	%
North Carolina	44,492,971		44,704,699		9.5	%	33,242,567		33,438,806		7.9	%
Utah	28,000,000		28,420,056		6.1	%	—		—		—	%
Texas	13,625,000		13,725,690		2.9	%	3,848,712		3,887,200		0.9	%
Massachusetts	7,000,000		7,000,000		1.5	%	7,000,000		7,000,000		1.7	%
Washington	3,523,401		3,382,683		0.7	%	23,500,000		23,682,536		5.6	%
South Carolina	3,000,000		3,145,614		0.7	%	3,000,000		3,204,375		0.8	%
Allowance for loan losses	—		(13,658,481)		(2.9)	%	—		(3,738,758)		(0.9)	%
Total	$	480,151,151	$	469,673,314	100.0	%	$	424,174,758	$	422,280,515	100.0	%

F-21

Notes to Consolidated Financial Statements

Loan Risk Rating

    As described in Note 2, the Manager evaluates the Company’s loan portfolio on a quarterly basis or more frequently as needed. In conjunction with the quarterly review of the Company’s loan portfolio, the Manager assesses the risk factors of each loan, and assigns a risk rating based on a five-point scale with “1” being the lowest risk and “5” being the greatest risk.

    The following table allocates the principal balance and the carrying value of the Company’s loans based on the loan risk rating as of December 31, 2021 and 2020:

	December 31, 2021							December 31, 2020
Loan Risk Rating	Number of Loans	Principal Balance		Carrying Value		% of Total		Number of Loans	Principal Balance		Carrying Value		% of Total
1	—	$	—	$	—	—	%	—	$	—	$	—	—	%
2	2	25,000,000		25,041,124		5.2	%	1	7,000,000		7,000,000		1.6	%
3	15	349,273,811		352,164,409		72.9	%	14	323,696,475		325,284,285		76.4	%
4	1	60,012,639		60,012,639		12.4	%	3	72,861,587		73,079,804		17.2	%
5	—	—		—		—	%	1	3,848,712		3,887,200		0.9	%
Other (1)	3	45,864,701		46,113,623		9.5	%	1	16,767,984		16,767,984		3.9	%
	21	$	480,151,151	483,331,795		100.0	%	20	$	424,174,758	426,019,273		100.0	%
Allowance for loan losses				(13,658,481)							(3,738,758)
Total, net of allowance for loan losses				$	469,673,314						$	422,280,515

_______________

(1)Because these loans have an event of default, they are removed from the pool of loans on which a general allowance is calculated and are evaluated for collectibility individually. As of December 31, 2021 and 2020, the specific allowance for loan losses on these loans were $12.8 million and $2.5 million, respectively, as a result of a decline in the fair value of the respective collateral.

    As of December 31, 2021, the Company had one loan with a loan risk rating of “4” and no loans with a loan risk rating of “5” and recorded general allowance for loan losses of $0.6 million for the year ended December 31, 2021. As of December 31, 2020, the Company had three loans with a loan risk rating of “4” and one loan with a loan risk rating of “5” and recorded general allowance for loan losses of $1.3 million for the year ended December 31, 2020. Additionally, as of December 31, 2021 and 2020, the Company had three and one loans, respectively, deemed impaired and recorded specific allowance for loan losses of $10.3 million and $2.5 million, respectively, as a result of a decline in the value of the underlying collateral.

The following table presents the activity in the Company’s allowance for loan losses for the years ended December 31, 2021 and 2020:

	Years Ended December 31,
	2021		2020
Allowance for loan losses, beginning of period	$	3,738,758	$	—
Provision for loan losses	10,904,163		3,738,758
Charge-offs (1)	(984,440)		—
Recoveries	—		—
Allowance for loan losses, end of period	$	13,658,481	$	3,738,758

_______________

(1)Amount related to the TDR described below.

As of both December 31, 2021 and 2020, the Company had one loan that was in maturity default. Additionally, for the year ended December 31, 2021, the Company suspended interest income accrual of $3.6 million on three loans, because recovery of such income was doubtful. There was no suspension of such interest income for the year ended December 31, 2020.

F-22

Notes to Consolidated Financial Statements

Troubled Debt Restructuring

As of December 31, 2021, the Company had a recorded investment in troubled debt restructuring of $13.7 million. There were no such loans as of December 31, 2020.

Due to financial difficulty resulting from the COVID-19 pandemic, a borrower defaulted on interest payments in May 2020 on a $3.5 million mezzanine loan and the Company subsequently suspended the interest accrual. The Company purchased the senior loan from a third-party lender on September 3, 2021 in order to facilitate a refinancing. Subsequently on September 23, 2021, the senior and mezzanine loans were refinanced and the Company issued a new senior loan with a committed amount of $14.7 million, of which $13.6 million was funded at closing. The concession granted in the refinancing was the forgiveness of principal and accrued interest of $1.3 million on the mezzanine loan, of which $1.0 million was previously recorded as an allowance for loan losses, in addition to $0.4 million of nonaccrual interest. The Company classified the refinancing as a TDR as it met all the conditions to be considered a TDR pursuant to ASC 310-40.

The following table summarizes the recorded investment of TDR as of the date of restructuring:

Number of loans modified	1
Pre-modified recorded carrying value	$	18,503,470
Post-modified recorded carrying value (1)	$	13,625,000

_______________

(1)As of December 31, 2021, the principal balance of this loan was $13.6 million and the carrying value of this loan, which includes the present value of the exit fee, was $13.7 million. There is no allowance for loan losses recorded for this new senior loan.

Once classified as a TDR, the new senior loan is classified as an impaired loan until it is extinguished and the carrying value is evaluated at each reporting date for collectability based on the fair value of the underlying collateral. Since the fair value of the collateral is greater than the carrying value of the new senior loan, no specific allowance was recorded as of December 31, 2021. For the period ended December 31, 2021, interest income from the new senior loan was $0.3 million.

Note 5. Equity Investment in Unconsolidated Investments

The Company owns interests in a limited partnership and two joint ventures. The Company accounts for its interests in these investments under the equity method of accounting (Note 2). The Company classifies distributions received from equity method investments using the cumulative earnings approach. Distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities.

Equity Investment in a Limited Partnership

On August 3, 2020, the Company entered into a subscription agreement with Mavik Real Estate Special Opportunities Fund, LP (“RESOF”) (formerly known as Terra Real Estate Credit Opportunities Fund, LP) whereby the Company committed to fund up to $50.0 million to purchase a limited partnership interest in RESOF. RESOF’s primary investment objective is to generate attractive risk-adjusted returns by purchasing performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets. RESOF may also opportunistically originate high-yield mortgages or loans in real estate special situations including rescue financings, bridge loans, restructurings and bankruptcies (including debtor-in-possession loans). The general partner of RESOF is Mavik Real Estate Special Opportunities Fund GP, LLC (formerly known as Terra Real Estate Credit Opportunities Fund GP, LLC), which is a subsidiary of the Company’s sponsor, Terra Capital Partners. As of December 31, 2021 and 2020, the unfunded commitment was $15.1 million and $14.1 million, respectively.

The Company evaluated its equity interest in RESOF and determined it does not have a controlling financial interest and is not the primary beneficiary. Accordingly, the equity interest in RESOF is accounted for as an equity method investment. As of December 31, 2021 and 2020, the Company owned 50.0% and 90.3% of equity interest in RESOF, respectively. As of December 31, 2021 and 2020, the carrying value of the Company’s investment in RESOF was $40.5 million and $36.3 million, respectively. For the year ended December 31, 2021, the Company recorded equity income from RESOF of $6.2 million and

F-23

Notes to Consolidated Financial Statements

received distributions of $3.5 million from RESOF. For the year ended December 31, 2020, the Company recorded equity income from RESOF of $0.04 million and did not received any distributions.

In connection with the equity investment in RESOF, the Company paid origination fees to the Manager totaling $0.5 million, to be amortized to equity income on a straight-line basis over the life of RESOF.

The following tables present summarized financial information of the Company’s equity investment in RESOF. Amounts provided are the total amounts attributable to the investment and do not represent the Company’s proportionate share:

	December 31,
	2021		2020
Investments at fair value (cost of $107,261,022 and $44,174,031, respectively)	$	108,359,898	$	44,715,979
Other assets	5,484,087		5,331,840
Total assets	113,843,985		50,047,819
Revolving line of credit, net of financing costs	14,909,717		—
Obligations under participation agreement (proceeds of $14,252,357 and $6,295,100,     respectively)	14,351,617		6,347,478
Other liabilities	5,296,603		4,204,147
Total liabilities	34,557,937		10,551,625
Partners’ capital	$	79,286,048	$	39,496,194

	Years Ended December 31,
	2021		2020
Total investment income	$	11,769,083	$	239,837
Total expenses	2,381,145		614,362
Net investment income (loss)	9,387,938		(374,525)
Unrealized appreciation on investments	524,113		417,300
Net increase in partners' capital resulting from operations	$	9,912,051	$	42,775

Equity Investment in Joint Ventures

In the fourth quarter of 2021, the Company purchased equity interests in two joint ventures that invest in real estate properties. The Company evaluated its equity interests in the joint ventures and determined it does not have a controlling financial interest and is not the primary beneficiary. Accordingly, the equity interests in the joint ventures are accounted for as equity method investments. The following table presents the Company’s ownership interests in its equity investments in the joint ventures and their respective carrying values:

		Ownership Interest at December 31, 2021	Carrying Value at December 31,
Entity	Co-owner		2021		2020
LEL Arlington JV LLC	Third party	80%	$	23,949,044	$	—
LEL NW 49th JV LLC	Third party	80%	5,306,467		—
			$	29,255,511	$	—

F-24

Notes to Consolidated Financial Statements

The following tables present estimated combined summarized financial information of the Company’s equity investment in the joint ventures. Amounts provided are the total amounts attributable to the joint ventures and do not represent the Company’s proportionate share:

	December 31,
	2021		2020
Net investments in real estate	$	115,636,424	$	—
Other assets	4,856,249		—
Total assets	120,492,673		—
Mortgage loan payable	83,445,235		—
Other liabilities	1,305,572		—
Total liabilities	84,750,807		—
Members’ capital	$	35,741,866	$	—

	Years Ended December 31,
	2021		2020
Revenues	$	1,448,431	$	—
Expenses	1,752,076		—
Net loss	$	(303,645)	$	—

For the year ended December 31, 2021, the Company recorded equity loss from the joint ventures of $0.2 million and did not receive any distributions. There was no such equity income or loss recorded or distributions received for the year ended December 31, 2020. In connection with these investments, the Company paid origination fee to the Manager totaling $0.3 million, to be amortize to equity income over the life of the respective joint venture.

Note 6. Real Estate Owned, Net

Real Estate Activities

2021 — In September 2021, the Company signed a new lease for the vacant space in the office building. The lease commences on December 1, 2021 and has term of 10 years with an option to extend the lease for 5 years. Additionally, the lease provides for a fixed rental payment plus a percentage rent that is based on 6% of the gross sales of the tenant’s business. The lease also provides a 3% increase in rental payment every year.

In November 2021, the Company received notice from a tenant of their intention to terminate its lease effective November 30, 2022. In connection with the lease termination, the Company received a termination fee of $3.1 million, to be amortized to income over the remaining life of the lease.

For the year ended December 31, 2021, the Company recorded an impairment charge on $3.4 million on the 4.9 acres of adjacent land in order to reduce the carrying value of the land to its estimated fair value, which is the estimated selling price less the cost of sale.

2020 — In June 2020, the Company received a notice from a tenant occupying a portion of the office building that the Company acquired in July 2018 pursuant to a foreclosure of their intention to terminate the lease. In connection with the lease termination effective September 4, 2020, the Company received from the tenant lease termination fee of $0.4 million, which included approximately $0.2 million of cash and $0.2 million of the furniture and fixtures in the office space. The furniture and fixtures have a remaining useful life of 2.5 years and are being depreciated on a straight-line basis over the remaining useful life. Additionally, the Company wrote off the related unamortized in-place lease intangible assets of $0.9 million, unamortized below-market rent intangible liabilities of $0.6 million and rent receivable of $0.1 million. There was no gain or loss recognized on the lease termination.

F-25

Notes to Consolidated Financial Statements

Real Estate Owned, Net

    Real estate owned is comprised of 4.9 acres of adjacent land located in Pennsylvania and a multi-tenant office building, with lease intangible assets and liabilities, located in California. The following table presents the components of real estate owned, net:

	December 31, 2021						December 31, 2020
	Cost		Accumulated Depreciation/Amortization		Net		Cost		Accumulated Depreciation/Amortization		Net
Real estate:
Land	$	10,000,000	$	—	$	10,000,000	$	13,395,430	$	—	$	13,395,430
Building and building    improvements	51,725,969		(4,418,305)		47,307,664		51,725,969		(3,125,143)		48,600,826
Tenant improvements	1,854,640		(947,369)		907,271		1,854,640		(670,090)		1,184,550
Furniture and fixtures	236,000		(125,867)		110,133		236,000		(31,467)		204,533
Total real estate	63,816,609		(5,491,541)		58,325,068		67,212,039		(3,826,700)		63,385,339
Lease intangible assets:
In-place lease	14,982,538		(7,627,326)		7,355,212		15,852,232		(6,172,747)		9,679,485
Above-market rent	156,542		(59,983)		96,559		156,542		(42,427)		114,115
Total intangible assets	15,139,080		(7,687,309)		7,451,771		16,008,774		(6,215,174)		9,793,600
Lease intangible liabilities:
Below-market rent	(2,754,922)		1,496,125		(1,258,797)		(3,371,314)		1,702,800		(1,668,514)
Above-market ground lease	(8,896,270)		445,357		(8,450,913)		(8,896,270)		315,008		(8,581,262)
Total intangible liabilities	(11,651,192)		1,941,482		(9,709,710)		(12,267,584)		2,017,808		(10,249,776)
Total real estate	$	67,304,497	$	(11,237,368)	$	56,067,129	$	70,953,229	$	(8,024,066)	$	62,929,163

Real Estate Operating Revenues and Expenses

    The following table presents the components of real estate operating revenues and expenses that are included in the consolidated statements of operations:

	Years Ended December 31,
	2021		2020
Real estate operating revenues:
Lease revenue	$	7,167,049	$	8,150,041
Other operating income	1,727,942		2,273,522
Total	$	8,894,991	$	10,423,563
Real estate operating expenses:
Utilities	$	208,098	$	166,003
Real estate taxes	1,401,279		1,925,999
Repairs and maintenances	645,316		659,934
Management fees	271,303		224,732
Lease expense, including amortization of above-market ground lease (1)	2,084,402		1,134,152
Other operating expenses	393,495		394,299
Total	$	5,003,893	$	4,505,119

_______________

(1)As discussed in “Leases” below, the multi-tenant office building is subject to a ground lease, for which the rent resets every five years. The last rent reset was on November 1, 2020. Based on information available to the Company as of November 1, 2020, including the fact that there was a global pandemic with a potentially significant negative impact on real estate values, the Company estimated the value of the land was no greater than the value on the date of foreclosure and continued

F-26

Notes to Consolidated Financial Statements

to accrue and pay rent at the then-existing rate. On June 2, 2021, the third-party appraisal process was completed, resulting in an increase of the annual base rent to $2.1 million from $1.3 million. The increase in base rent was retroactive back to November 1, 2020. The Company accounted for the change in base rent as a change in accounting estimate; as a result, the increase in rent from November 2020 through March 2021 was recorded in the period in which the change occurred, which is June 2021. Had the new base rent been recorded on November 1, 2020, lease expense including amortization of above-market ground lease would have been $1.7 million for the year ended December 31, 2021 and total real estate operating expenses would have been $4.7 million for the year ended December 31, 2021.

Leases

    On July 30, 2018, the Company foreclosed on a multi-tenant office building in full satisfaction of a first mortgage and related fees and expenses. In connection with the foreclosure, the Company assumed four leases whereby the Company is the lessor to the leases. These four tenant leases had remaining lease terms ranging from 6.3 years to 8.8 years as of July 30, 2018 and provide for annual fixed rent increases. Each of the three tenant leases provides two options to renew the lease for five years and the remaining tenant lease provides one option to renew the lease for five years.

    In addition, the Company assumed a ground lease whereby the Company is the lessee (or a tenant) to the ground lease. The ground lease had a remaining lease term of 68.3 years and provides for a new base rent every 5 years based on the greater of the annual base rent for the prior lease year or 9% of the fair market value of the land. The next rent reset on the ground lease is scheduled for November 1, 2025. The Company is currently litigating with the landlord with respect to the appropriate determination of the fair value of the land, on which the ground rent is based. Since future rent increases on the ground lease are unknown, the Company did not include any potential future rent increases in calculating the present value of future rent payments. The ground lease does not provide for renewal options.

    On the date of foreclosure, the Company performed lease classification test on the tenant leases as well as the ground lease in accordance with ASC 840. The result of the lease classification test indicated that the tenant leases and the ground lease shall be classified as operating leases on the date of foreclosure.

Scheduled Future Minimum Rent Income 

    Scheduled future minimum rents, exclusive of renewals and expenses paid by tenants, under non-cancelable operating leases at December 31, 2021 are as follows: 

Years Ending December 31,	Total
2022	$	7,214,814
2023	4,235,538
2024	4,380,043
2025	792,925
2026	816,724
Thereafter	2,414,440
Total	$	19,854,484

Scheduled Annual Net Amortization of Intangibles 

    Based on the intangible assets and liabilities recorded at December 31, 2021, scheduled annual net amortization of intangibles for each of the next five calendar years and thereafter is as follows:

Years Ending December 31,	Net Decrease in Real Estate Operating Revenue (1)		Increase in Depreciation and Amortization (1)		Decrease in Rent Expense (1)		Total
2022	$	(926,553)	$	4,956,914	$	(130,348)	$	3,900,013
2023	(139,056)		1,093,878		(130,348)		824,474
2024	(139,056)		1,093,878		(130,348)		824,474
2025	17,556		87,121		(130,348)		(25,671)
2026	17,556		87,121		(130,348)		(25,671)
Thereafter	7,315		36,300		(7,799,173)		(7,755,558)
Total	$	(1,162,238)	$	7,355,212	$	(8,450,913)	$	(2,257,939)

F-27

Notes to Consolidated Financial Statements

_______________

(1)Amortization of below-market rent and above-market rent intangibles is recorded as an adjustment to lease revenues; amortization of in-place lease intangibles is included in depreciation and amortization; and amortization of above-market ground lease is recorded as a reduction to rent expense.

Supplemental Ground Lease Disclosures

    Supplemental balance sheet information related to the ground lease was as follows:    

	December 31,
	2021			2020
Operating lease
Operating lease right-of-use asset (1)	$	27,394,936		$	16,105,888
Operating lease liability	$	27,394,936		$	16,105,888
Weighted average remaining lease term — operating lease (years)	64.8			65.8
Weighted average discount rate — operating lease	7.6		%	7.9		%

_______________

(1)The operating lease ROU asset and liability were remeasured at June 30, 2021 based on the new base rent resulting from the ground rent reset.

    The component of lease expense for the ground lease was as follows:

	Years Ended December 31,
	2021		2020
Operating lease cost (1)	$	2,214,750	$	1,264,500

_______________

(1)The increase in operating lease cost was a result of the ground rent reset described above.

    Supplemental non-cash information related to the ground lease was as follows:

	Years Ended December 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liability:
Operating cash flows from an operating lease	$	2,214,750	$	1,264,500
Right-of-use asset obtained in exchange for lease obligations:
Operating lease	$	2,214,750	$	1,264,500

    Maturities of operating lease liability are as follows:

Years Ending December 31,	Operating Lease
2022	$	2,079,000
2023	2,079,000
2024	2,079,000
2025	2,079,000
2026	2,079,000
Thereafter	124,306,875
Total lease payments	134,701,875
Less: Imputed interest	(107,306,939)
Total	$	27,394,936

F-28

Notes to Consolidated Financial Statements

Note 7. Fair Value Measurements

    The Company adopted the provisions of ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 established a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment, the characteristics specific to the investment, and the state of the marketplace (including the existence and transparency of transactions between market participants). Investments with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Investments measured and reported at fair value are classified and disclosed into one of the following categories based on the inputs as follows:

Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access.

Level 2 — Pricing inputs are other than quoted prices in active markets, including, but not limited to, quoted prices for similar assets and liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs.

      Level 3 — Significant unobservable inputs are based on the best information available in the circumstances, to the extent observable inputs are not available, including the Company’s own assumptions used in determining the fair value of investments. Fair value for these investments are determined using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance, and financing transactions subsequent to the acquisition of the investment. The inputs into the determination of fair value require significant management judgment.

     In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

As of December 31, 2021 and 2020, the Company has not elected the fair value option for its financial instruments, including loans held for investment, loans held for investment acquired through participation, obligations under participation agreements, secured borrowing, term loan payable, repurchase agreement payable, mortgage loan payable and revolving line of credit. Such financial instruments are carried at cost, less impairment or less net deferred costs, where applicable. Marketable securities are financial instruments that are reported at fair value.

Financial Instruments Carried at Fair Value on a Recurring Basis

    From time to time, the Company may invest in short-term debt and equity securities which are classified as available-for-sale securities, which are presented at fair value on the consolidated balance sheet. Changes in the fair value of equity securities are recognized in earnings. Changes in the fair value of debt securities are reported in other comprehensive income until the securities are realized.

The following tables present fair value measurements of marketable securities, by major class, as of December 31, 2021 and 2020, according to the fair value hierarchy:

	December 31, 2021
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Marketable Securities:
Equity securities	$	1,310,000	$	—	$	—	$	1,310,000
Total	$	1,310,000	$	—	$	—	$	1,310,000

F-29

Notes to Consolidated Financial Statements

	December 31, 2020
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Marketable Securities:
Equity securities	$	1,287,500	$	—	$	—	$	1,287,500
Total	$	1,287,500	$	—	$	—	$	1,287,500

    The following table presents the activities of the marketable securities for the periods presented.

	Years Ended December 31,
	2021		2020
Beginning balance	$	1,287,500	$	—
Purchases	6,479,148		6,039,567
Proceeds from sale	(6,608,396)		(6,023,723)
Reclassification of net realized gains on marketable securities into earnings	129,248		1,160,162
Unrealized gains on marketable securities	22,500		111,494
Ending balance	$	1,310,000	$	1,287,500

Financial Instruments Not Carried at Fair Value

The following table presents the carrying value, which represents the principal amount outstanding, adjusted for the accretion of purchase discounts on loans and exit fees, and the amortization of purchase premiums on loans and origination fees, and estimated fair value of the Company’s financial instruments that are not carried at fair value on the consolidated balance sheets:

		December 31, 2021						December 31, 2020
	Level	Principal Amount		Carrying Value		Fair Value		Principal Amount		Carrying Value		Fair Value
Loans:
Loans held for investment	3	$	467,843,785	$	470,988,063	$	454,840,551	$	419,924,758	$	421,725,220	$	415,113,225
Loans held for investment    acquired through    participation	3	12,307,366		12,343,732		12,361,068		4,250,000		4,294,053		4,293,969
Allowance for loan losses		—		(13,658,481)		—		—		(3,738,758)		—
Total loans		$	480,151,151	$	469,673,314	$	467,201,619	$	424,174,758	$	422,280,515	$	419,407,194
Liabilities:
Term loan payable	3	$	93,763,470	$	91,940,062	$	94,344,595	$	107,584,451	$	105,245,801	$	107,248,555
Unsecured notes payable	1	85,125,000		81,856,799		85,210,125		—		—		—
Repurchase agreement payable	3	44,569,600		43,974,608		44,569,600		—		—		—
Obligations under participation    agreements	3	42,048,294		42,232,027		41,475,060		71,266,303		71,581,897		70,693,207
Mortgage loan payable	3	31,962,692		32,134,295		32,192,785		44,020,225		44,117,293		44,348,689
Secured borrowing	3	34,521,104		34,586,129		34,425,029		18,281,848		18,187,663		17,037,032
Revolving line of credit    payable	3	38,575,895		38,186,472		38,575,895		—		—		—
Total liabilities		$	370,566,055	$	364,910,392	$	370,793,089	$	241,152,827	$	239,132,654	$	239,327,483

    The Company estimated that its other financial assets and liabilities, not included in the tables above, had fair values that approximated their carrying values at both December 31, 2021 and 2020 due to their short-term nature.

Valuation Process for Fair Value Measurement

    The fair value of the Company’s investment in equity securities and its unsecured notes payable is determined based on quoted prices in an active market and is classified as Level 1 of the fair value hierarchy.

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Notes to Consolidated Financial Statements

    Market quotations are not readily available for the Company’s real estate-related loan investments, all of which are included in Level 3 of the fair value hierarchy, and therefore these investments are valued utilizing a yield approach, i.e. a discounted cash flow methodology to arrive at an estimate of the fair value of each respective investment in the portfolio using an estimated market yield. In following this methodology, investments are evaluated individually, and management takes into account, in determining the risk-adjusted discount rate for each of the Company’s investments, relevant factors, which may include available current market data on applicable yields of comparable debt/preferred equity instruments; market credit spreads and yield curves; the investment’s yield; covenants of the investment, including prepayment provisions; the portfolio company’s ability to make payments, net operating income and debt-service coverage ratio; construction progress reports and construction budget analysis; the nature, quality and realizable value of any collateral (and loan-to-value ratio); the forces that influence the local markets in which the asset (the collateral) is purchased and sold, such as capitalization rates, occupancy rates, rental rates and replacement costs; and the anticipated duration of each real estate-related loan investment.

The Manager designates a valuation committee to oversee the entire valuation process of the Company’s Level 3 loans. The valuation committee is comprised of members of the Manager’s senior management, deal and portfolio management teams, who meet on a quarterly basis, or more frequently as needed, to review the Company investments being valued as well as the inputs used in the proprietary valuation model. Valuations determined by the valuation committee are supported by pertinent data and, in addition to a proprietary valuation model, are based on market data, industry accepted third-party valuation models and discount rates or other methods the valuation committee deems to be appropriate. Because there is no readily available market for these investments, the fair values of these investments are approved in good faith by the Manager pursuant to the Company’s valuation policy.

    The fair values of the Company’s mortgage loan payable, secured borrowing, term loan payable and revolving line of credit are determined by discounting the contractual cash flows at the interest rate the Company estimates such arrangements would bear if executed in the current market.

The following table summarizes the valuation techniques and significant unobservable inputs used by the Company to value the Level 3 loans as of December 31, 2021 and 2020. The tables are not intended to be all-inclusive, but instead identify the significant unobservable inputs relevant to the determination of fair values.

	Fair Value at December 31, 2021		Primary Valuation Technique	Unobservable Inputs	December 31, 2021
Asset Category					Minimum		Maximum		Weighted Average
Assets:
Loans held for investment, net	$	454,840,551	Discounted cash flow	Discount rate	3.89	%	15.00	%	8.11	%
Loans held for investment acquired through    participation, net	12,361,068		Discounted cash flow	Discount rate	8.25	%	15.00	%	12.33	%
Total Level 3 Assets	$	467,201,619
Liabilities:
Term loan payable	$	94,344,595	Discounted cash flow	Discount rate	4.00	%	4.00	%	4.00	%
Repurchase agreement payable	44,569,600		Discounted cash flow	Discount rate	2.45	%	2.74	%	2.57	%
Obligations under participation agreements	41,475,060		Discounted cash flow	Discount rate	12.37	%	15.00	%	14.31	%
Mortgage loan payable	32,192,785		Discounted cash flow	Discount rate	6.08	%	6.08	%	6.08	%
Secured borrowing	34,425,029		Discounted cash flow	Discount rate	6.64	%	6.64	%	6.64	%
Revolving line of credit	38,575,895		Discounted cash flow	Discount rate	4.00	%	4.00	%	4.00	%
Total Level 3 Liabilities	$	285,582,964

F-31

Notes to Consolidated Financial Statements

	Fair Value at December 31, 2020		Primary Valuation Technique	Unobservable Inputs	December 31, 2020
Asset Category					Minimum		Maximum		Weighted Average
Assets:
Loans held for investment, net	$	415,113,225	Discounted cash flow	Discount rate	5.29	%	20.05	%	10.38	%
Loans held for investment acquired through    participation, net	4,293,969		Discounted cash flow	Discount rate	12.89	%	12.89	%	12.89	%
Total Level 3 Assets	$	419,407,194
Liabilities:
Term loan payable	$	107,248,555	Discounted cash flow	Discount rate	5.25	%	5.25	%	5.25	%
Obligations under participation agreements	70,693,207		Discounted cash flow	Discount rate	9.75	%	20.05	%	12.58	%
Mortgage loan payable	44,348,689		Discounted cash flow	Discount rate	6.08	%	6.08	%	6.08	%
Secured borrowing	17,037,032		Discounted cash flow	Discount rate	11.25	%	11.25	%	11.25	%
Total Level 3 Liabilities	$	239,327,483

Note 8. Related Party Transactions

Management Agreement

The Company entered into a Management Agreement with the Manager whereby the Manager is responsible for its day-to-day operations. The Management Agreement runs co-terminus with the amended and restated operating agreement for Terra Fund 5, which is scheduled to terminate on December 31, 2023 unless Terra Fund 5 is dissolved earlier. The following table presents a summary of fees paid and costs reimbursed to the Manager in connection with providing services to the Company that are included on the consolidated statements of operations:

	Years Ended December 31,
	2021		2020
Origination and extension fee expense (1)(2)	$	2,729,598	$	1,383,960
Asset management fee	5,134,149		4,480,706
Asset servicing fee	1,181,924		1,008,256
Operating expenses reimbursed to Manager	6,916,371		6,041,075
Disposition fee (3)	1,006,302		504,611
Total	$	16,968,344	$	13,418,608

_______________

(1)Origination and extension fee expense is generally offset with origination and extension fee income. Any excess is deferred and amortized to interest income over the term of the loan.

(2)Amount for the years ended December 31, 2021 and 2020 excluded $0.3 million and $0.5 million of origination fee, respectively, paid to the Manager in connection with the Company’s equity investment in unconsolidated investments. These origination fees were capitalized to the carrying value of the unconsolidated investments as transaction costs.

(3)Disposition fee is generally offset with exit fee income and included in interest income on the consolidated statements of operations.

Origination and Extension Fee Expense

Pursuant to the Management Agreement, the Manager or its affiliates receives an origination fee in the amount of 1% of the amount used to originate, fund, acquire or structure real estate-related investments, including any third-party expenses related to such loans. In the event that the term of any real estate-related loan held by the Company is extended, the Manager also receives an extension fee equal to the lesser of (i) 1% of the principal amount of the loan being extended or (ii) the amount of fee paid to the Company by the borrower in connection with such extension.

Asset Management Fee

Under the terms of the Management Agreement, the Manager or its affiliates provides the Company with certain investment management services in return for a management fee. The Company pays a monthly asset management fee at an

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annual rate of 1% of the aggregate funds under management, which includes the loan origination price or aggregate gross acquisition price, as defined in the Management Agreement, for each real estate related loan and cash held by the Company.

Asset Servicing Fee

The Manager or its affiliates receives from the Company a monthly servicing fee at an annual rate of 0.25% of the aggregate gross origination price or acquisition price, as defined in the Management Agreement, for each real estate-related loan held by the Company.

Transaction Breakup Fee

    In the event that the Company receives any “breakup fees,” “busted-deal fees,” termination fees, or similar fees or liquidated damages from a third-party in connection with the termination or non-consummation of any loan or disposition transaction, the Manager will be entitled to receive one-half of such amounts, in addition to the reimbursement of all out-of-pocket fees and expenses incurred by the Manager with respect to its evaluation and pursuit of such transactions. As of December 31, 2021 and 2020, the Company has not received any breakup fees.

Operating Expenses

The Company reimburses the Manager for operating expenses incurred in connection with services provided to the operations of the Company, including the Company’s allocable share of the Manager’s overhead, such as rent, employee costs, utilities, and technology costs.

Disposition Fee

Pursuant to the Management Agreement, the Manager or its affiliates receives a disposition fee in the amount of 1% of the gross sale price received by the Company from the disposition of any real estate-related loan, or any portion of, or interest in, any real estate-related loan. The disposition fee is paid concurrently with the closing of any such disposition of all or any portion of any real estate-related loan or any interest therein, which is the lesser of (i) 1% of the principal amount of the loan or debt-related loan prior to such transaction or (ii) the amount of the fee paid by the borrower in connection with such transaction. If the Company takes ownership of a property as a result of a workout or foreclosure of a loan, the Company will pay a disposition fee upon the sale of such property equal to 1% of the sales price.

Distributions Paid

For the years ended December 31, 2021 and 2020, the Company made distributions to Terra 5, Terra JV and Terra Offshore REIT totaling $17.1 million and $21.2 million, respectively, of which $14.6 million and $16.0 million were returns of capital, respectively (Note 11).

Due to Manager

    As of December 31, 2021 and 2020, approximately $2.4 million and $1.3 million was due to the Manager, respectively, as reflected on the consolidated balance sheets, primarily related to the present value of the disposition fees on individual loans due to the Manager.

Due from Related Party

    As of December 31, 2021, amount due from a related party was $2.6 million, primarily related to the reserve funding on a loan that was held by an affiliate. The reserve funding was transferred to the Company in February 2022. There was no due from related party as of December 31, 2020.

Merger and Issuance of Common Stock to Terra Offshore REIT

    As discussed in Note 3, on March 1, 2020, TPT2 merged with and into the Company with the Company continuing as the surviving company. In connection with the Merger, the Company issued 2,116,785.76 shares of common stock of the Company to Terra Fund 7, the sole stockholder of TPT2, as consideration in the Merger. In addition, on March 2, 2020, Terra Offshore REIT contributed cash and released obligations under the participation agreements to the Company (Note 3) in exchange for the issuance of 2,457,684.59 shares of common stock of the Company. As described in Note 3, Terra Fund 7 contributed the shares of the Company’s common stock received as consideration in the Merger to Terra JV and became a co-managing member of

F-33

Terra JV pursuant to the JV Agreement. The JV Agreement and related stockholders agreement between Terra JV and the Company, dated March 2, 2020, provide for the joint approval of Terra Fund 5 and Terra Fund 7 with respect to certain major decisions that are taken by Terra JV and the Company. As of December 31, 2021, Terra JV owns 87.4% of the issued and outstanding shares of the Company’s common stock with the remainder held by Terra Offshore REIT, and Terra Fund 5 and Terra Fund 7 own an 87.6% and 12.4% interest, respectively, in Terra JV.

Mavik Real Estate Special Opportunities Fund, LP

On August 3, 2020, the Company entered into a subscription agreement with RESOF whereby the Company committed to fund up to $50.0 million to purchase limited partnership interests in RESOF. For more information on this investment, please see Note 5.

Terra International Fund 3, L.P.

    On September 30, 2019, Terra International Fund 3, L.P. (“Terra International 3”), through Terra Offshore REIT, a wholly-owned subsidiary of Terra International 3, contributed cash in the amount of $3.6 million to the Company in exchange for 212,691 shares of common stock, at a price of $17.02 per share. On April 29, 2020, the Company repurchased, at a price of $17.02 per share, the 212,691 shares of common stock that the Company had previously sold to Terra Offshore REIT on September 30, 2019.

Participation Agreements

In the normal course of business, the Company may enter into participation agreements with related parties, primarily other affiliated funds managed by the Manager, and to a lesser extent, unrelated parties (the “Participants”). The purpose of the participation agreements is to allow the Company and an affiliate to originate a specified loan when, individually, the Company does not have the liquidity to do so or to achieve a certain level of portfolio diversification. The Company may transfer portions of its investments to other Participants or it may be a Participant to a loan held by another entity.

ASC 860, Transfers and Servicing (“ASC 860”), establishes accounting and reporting standards for transfers of financial assets. ASC 860-10 provides consistent standards for distinguishing transfers of financial assets that are sales from transfers that are secured borrowings. The Company has determined that the participation agreements it enters into are accounted for as secured borrowings under ASC 860 (See “Participation interests” in Note 2 and “Obligations under Participation Agreements” in (Note 9).

Participation Interests Purchased by the Company

From time to time, the Company may purchase investments from affiliates pursuant to participation agreements. In accordance with the terms of each participation agreement, each Participant’s rights and obligations, as well as the proceeds received from the related borrower/issuer of the loan, are based upon their respective pro rata participation interest in the loan.

The table below lists the participation interests purchased by the Company pursuant to participation agreements as of December 31, 2021 and 2020.

	December 31, 2021
	Participating Interests	Principal Balance		Carrying Value
Hillsborough Owners LLC (1)	30.00%	$	4,863,009	$	4,866,542
UNJ Sole Member, LLC (2)	40.80%	7,444,357		7,477,190
		$	12,307,366	$	12,343,732

	December 31, 2020
	Participating Interests	Principal Balance		Carrying Value
LD Milpitas Mezz, LP (3)	25.00%	$	4,250,000	$	4,294,053

________________

(1)The loan is held in the name of Terra Income Fund 6, Inc. (“Terra Fund 6”), an affiliated fund advised by Terra Income Advisors, LLC, an affiliate of the Company’s sponsor and Manager.

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(2)The loan is held in the name of Mavik Real Estate Special Opportunities Fund REIT, LLC, a related-party REIT managed by the Manager.

(3)On June 27, 2018, the Company entered into a participation agreement with Terra Fund 6 to purchase a 25% participation interest, or $4.3 million, in a $17.0 million mezzanine loan. This loan was repaid in full in May 2021.

Transfers of Participation Interest by the Company

    The following tables summarize the loans that were subject to participation agreements with affiliated entities and third-parties as of December 31, 2021 and 2020:

					Transfers Treated as Obligations Under Participation Agreements as of December 31, 2021
	Principal Balance		Carrying Value		% Transferred		Principal Balance		Carrying Value
370 Lex Part Deux, LLC (1)	$	60,012,639	$	60,012,639	35.00	%	$	21,004,424	$	21,004,423
RS JZ Driggs, LLC (1)	15,606,409		15,754,641		50.00	%	7,806,370		7,880,516
William A. Shopoff & Cindy I. Shopoff (1)	25,000,000		25,206,964		52.95	%	13,237,500		13,347,088
	$	100,619,048	$	100,974,244			$	42,048,294	$	42,232,027

					Transfers Treated as Obligations Under Participation Agreements as of December 31, 2020
	Principal Balance		Carrying Value		% Transferred		Principal Balance		Carrying Value
14th & Alice Street Owner, LLC (2)(3)(4)	$	32,625,912	$	32,877,544	80.00	%	$	26,100,729	$	26,211,548
370 Lex Part Deux, LLC (1)	53,874,507		53,912,363		35.00	%	18,856,078		18,856,077
City Gardens 333 LLC (1)(4)	28,303,628		28,307,408		14.00	%	3,962,509		3,963,010
Orange Grove Property Investors, LLC (1)(4)	10,600,000		10,701,924		80.00	%	8,480,000		8,561,523
RS JZ Driggs, LLC (1)	8,544,513		8,629,929		50.00	%	4,272,257		4,314,965
Stonewall Station Mezz LLC (1)(4)	10,442,567		10,537,512		44.00	%	4,594,730		4,635,937
The Bristol at Southport, LLC (2)(4)	23,500,000		23,682,536		21.28	%	5,000,000		5,038,837
	$	167,891,127	$	168,649,216			$	71,266,303	$	71,581,897

________________

(1)Participant is Terra Fund 6.

(2)Participant is a third-party.

(3)The participation interest was transferred to an affiliate and/or a third-party pursuant to a participation agreement in the second quarter of 2021.

(4)The obligation under participation agreement was repaid in 2021.

These investments are held in the name of the Company, but each of the Participant’s rights and obligations, including interest income and other income (e.g., exit fee, prepayment income) and related fees/expenses (e.g., disposition fees, asset management and asset servicing fees), are based upon their respective pro rata participation interest in such participated investments, as specified in the respective participation agreement. The Participants’ share of the investments is repayable only from the proceeds received from the related borrower/issuer of the investments and, therefore, the Participants also are subject to credit risk (i.e., risk of default by the underlying borrower/issuer). Pursuant to the participation agreements with these entities, the Company receives and allocates the interest income and other related investment income to the Participants based on their respective pro rata participation interest. The Participants pay any expenses, including any fees to the Manager, only on their respective pro rata participation interest, subject to the terms of the respective governing fee arrangements.

Secured Borrowing

In March 2020, the Company entered into a financing transaction where a third-party purchased an A-note position. However, the sale of the A-note position did not qualify for sale accounting under ASC 860 and therefore, the gross amount of the loan remains in the consolidated balance sheets and the proceeds from the sale on the portion transferred are recorded as

F-35

secured borrowing. Interest earned on the entire loan balance is recorded within “Interest income” and the interest related to the transferred interest is recorded within “Interest expense on secured borrowing” in the consolidated statements of operations.

The following table summarizes the loan that was transferred to a third-party that was accounted for as secured borrowing as of December 31, 2021 and 2020:

					Transfers Treated as Secured Borrowing as of December 31, 2021
	Principal Balance		Carrying Value		% Transferred		Principal Balance		Carrying Value
Windy Hill PV Five CM, LLC	$	49,954,068	$	50,264,568	69.11	%	$	34,521,104	$	34,586,129
	$	49,954,068	$	50,264,568			$	34,521,104	$	34,586,129

					Transfers Treated as Secured Borrowing as of December 31, 2020
	Principal Balance		Carrying Value		% Transferred		Principal Balance		Carrying Value
Windy Hill PV Five CM, LLC	$	26,454,910	$	26,407,494	69.11	%	$	18,281,848	$	18,187,663
	$	26,454,910	$	26,407,494			$	18,281,848	$	18,187,663

Note 9. Debt

Unsecured Notes Payable

On June 10, 2021, the Company issued $78.5 million in aggregate principal amount of its 6.00% notes due 2026 (the “initial note”), for net proceeds of $76.0 million after deducting underwriting commissions of $2.5 million, but before offering expenses payable by the Company. On June 25, 2021, the underwriters partially exercised their option to purchase an additional $6.6 million of the notes for net proceeds of $6.4 million (the “additional notes” and, together with the initial notes, the “notes”), after deducting underwriting commissions of $0.2 million, but before offering expenses payable by us, which closed on June 29, 2021. Interest on the notes is paid quarterly in arrears every March 30, June 30, September 30 and December 30, at a fixed rate of 6.00% per year, beginning September 30, 2021. The notes mature on June 30, 2026, unless redeemed earlier by the Company. The notes may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after June 10, 2023.

In connection with the issuance of the notes, the Company entered into (i) an Indenture, dated June 10, 2021 (the “Base Indenture”), by and between the Company and U.S. Bank National Association, as trustee (the “Trustee”), and (ii) the First Supplemental Indenture thereto, dated June 10, 2021 (the “Supplemental Indenture” and, collectively with the Base Indenture, the “Indenture”), by and between the Company and the Trustee. The Indenture contains certain covenants that, among other things, limit the ability of the Company, subject to exceptions, to make distributions in excess of 90% of the Company’s taxable income, incur indebtedness (as defined in the Indenture) or purchase shares of the Company’s capital stock unless the Company has an asset coverage ratio (as defined in the Indenture) of at least 150% after giving effect to such transaction. The Indenture also provides for customary events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the notes to become or to be declared due and payable. As of December 31, 2021, the Company was in compliance with the covenants included in the Indenture.

The table below presents detailed information regarding the unsecured notes payable at December 31, 2021:

	December 31, 2021
	Principal Balance		Carrying Value (1)		Fair Value
Unsecured notes payable	$	85,125,000	$	81,856,799	$	85,210,125

_______________

(1)Amount is net of unamortized issue discount of $2.4 million and unamortized deferred financing costs of $0.9 million.

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Revolving Line of Credit

On March 12, 2021, Terra Mortgage Portfolio II, LLC, an indirect wholly-owned subsidiary of the Company, entered into a Business Loan and Security Agreement (the “Revolving Line of Credit”) with Western Alliance Bank (“WAB”) to provide for advances up to the lesser of $75.0 million or the amount determined by the borrowing base, which is based on the eligible assets pledged to the lender. Borrowings under the Revolving Line of Credit bear interest at an annual rate of LIBOR + 3.25% with a combined floor of 4.0% per annum. The Revolving Line of Credit was scheduled to mature on March 12, 2023. On January 4, 2022, the Company amended the Revolving Line of Credit and the Security Agreement to increase the maximum amount available to $125.0 million and extended the maturity date of the facility to March 12, 2024 with an annual 12-month extension available at the Company’s option, which are subject to certain conditions.

In connection with the Revolving Line of Credit, the Company entered into a limited guaranty (the “Guaranty”) in favor of WAB, pursuant to which the Company will guarantee the payment of up to 25% of the amount outstanding under the Revolving Line of Credit. Under the Revolving Line of Credit and the Guaranty, the Company will be required to maintain (i) a minimum total net worth of $250.0 million; (ii) a $2.0 million quarterly operating profit, as defined within the agreement; and (iii) a ratio of total debt to total net worth of no more than 2.50 to 1.00. As of December 31, 2021, the Company is in compliance with these covenants.

The Revolving Line of Credit contains terms, conditions, covenants, and representations and warranties that are customary and typical for a transaction of this nature. The Revolving Line of Credit contains various affirmative and negative covenants, including maintenance of a debt to total net worth ratio and limitations on the incurrence of liens and indebtedness, loans, distributions, change of management and ownership, changes in the nature of business and transactions with affiliates.

The Revolving Line of Credit also includes customary events of default, including a cross-default provision applicable to debt obligations of Terra Mortgage Portfolio II, LLC or the Company. The occurrence of an event of default may result in termination of the Revolving Line of Credit and acceleration of amounts due under the Revolving Line of Credit.

In connection with the closing of the Revolving Line of Credit, the Company also incurred financing fees of $0.6 million, to be amortized to interest expense over the life of the Revolving Line of Credit.

The following tables present detailed information with respect to each borrowing under the Revolving Line of Credit as of December 31, 2021:

	December 31, 2021
	Borrowing Base						Borrowings Under the Revolving Line of Credit
	Principal Amount		Carrying Value		Fair Value
870 Santa Cruz, LLC	$	17,540,875	$	17,669,303	$	17,781,285	$	12,278,613
606 Fayetteville LLC and 401 E. Lakewood LLC	16,829,962		16,935,803		16,974,601		10,312,187
Austin H. I. Borrower LLC	13,625,000		13,725,690		13,735,569		7,493,750
D-G Acquistion #6, LLC and D-G Quimisa, LLC	8,607,092		8,605,341		8,645,413		6,024,965
The Lux Washington, LLC	3,523,401		3,382,683		3,553,330		2,466,380
	$	60,126,330	$	60,318,820	$	60,690,198	$	38,575,895

For the year ended December 31, 2021, the Company received proceeds from the Revolving Line of Credit of $38.6 million and did not make any repayments.

Term Loan

On September 3, 2020, Terra Mortgage Capital I, LLC (the “Issuer” or the “Seller”), a special-purpose indirect wholly-owned subsidiary of the Company, entered into an Indenture and Credit Agreement (the “Indenture and Credit Agreement”) with Goldman Sachs Bank USA, as initial lender (“Goldman”) and Wells Fargo Bank, National Association, as the trustee, custodian, collateral agent, loan agent and note administrator (“Wells Fargo”). The Indenture and Credit Agreement provides for (A) the borrowing by the Issuer from Goldman of approximately $103.0 million under a floating rate loan (the “Term Loan”) and (B) the issuance by the Issuer to Terra Mortgage Portfolio I, LLC (the “Class B Holder”) of an aggregate of approximately $76.7 million principal amount of Class B Income Notes due 2025 (the “Class B Notes” and, together with the Term Loan, the “Debt”). The Class B Holder is the parent of the Issuer and a wholly-owned subsidiary of the Company, and the sole holder of the Class B Notes. The Class B Holder is consolidated by the Company and the Term Loan represents amount

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due to Goldman under the Indenture and Credit Agreement. In addition, pursuant to the terms and conditions of the Indenture and Credit Agreement, Goldman has agreed to provide $3.6 million of additional future advances (the “Committed Advances”), and may provide up to $11.6 million of additional future discretionary advances, in connection with certain outstanding funding commitments under mortgage assets owned by the Issuer and financed under the Indenture and Credit Agreement (the “Mortgage Assets”).

The stated maturity date of the Debt was March 14, 2025. On February 18, 2022, the Company refinanced the Term Loan with a new repurchase agreement (see Note 12). The Term Loan bore interest at a variable rate initially equal to LIBOR (the “Benchmark Rate”) (but not less than 1.0% per annum), plus a margin of 4.25% per annum (plus 0.50% on and after the payment date in October 2022, plus 0.25% on and after the payment date in October 2023), payable each month, on the day specified in the Indenture and Credit Agreement beginning in September 2020 (each a “Payment Date”).

The Indenture and Credit Agreement is a term loan and does not contain any mark-to-market or margin provisions. Within a specified period following a monetary or material non-monetary default under a Mortgage Asset, the Class B Holder is required to prepay the portion of the Term Loan that is allocable to such Mortgage Asset (such prepayment is without premium, yield maintenance or other penalty). In connection with entering into the Indenture and Credit Agreement, the Company incurred $2.4 million of deferred financing costs, including a $1.3 million upfront fee paid to Goldman, which are being amortized to interest expense over the term of the facility. The Issuer also pays, with respect to the Committed Advances, an annual fee, payable monthly, equal to the Benchmark Rate or Alternate Benchmark Rate, as applicable, subject to a floor of 1.0% per annum, plus 4.25%.

In connection with the Indenture and Credit Agreement, the Company entered into a non-recourse carveout Guaranty (the “Guaranty”) in favor of Goldman, pursuant to which the Company guarantees the payment of certain losses, damages, costs, expenses, and other obligations incurred by Goldman in connection with the occurrence of fraud, intentional misrepresentation, or willful misconduct by the Issuer, Class B Holder or the Company, and certain other occurrences including breaches of certain provisions under the Indenture and Credit Agreement. The Company also guarantees the payment of the aggregate outstanding amount of the Term Loan upon the occurrence of certain bankruptcy events. Under the Guaranty, the Company is required to maintain (a) a minimum tangible net worth in an amount not less than seventy-five percent (75%) of its tangible net worth as of September 3, 2020, (b) a minimum liquidity of $10 million, and (c) an EBITDA to interest expense ratio of not less than 1.5 to 1.0. Failure to satisfy such maintenance covenants would constitute an event of default under the Indenture and Credit Agreement. On February 18, 2022, the Company refinanced the Term Loan with a new repurchase agreement (see Note 12) and expects continued covenant compliance under the terms of the new repurchase agreement. As of December 31, 2020, the Company was in compliance with these covenants.

The Term Loan is secured by first-priority security interests in substantially all of the assets of the Issuer, including all of the Mortgage Assets (other than excluded property and subject to certain permitted liens), including specified cash accounts that include the accounts into which Mortgage Asset proceeds are or will be paid. The Mortgage Assets are serviced and administered by an independent third-party servicer.

The principal and interest on the Term Loan are repaid before repayment of the principal on the Class B Notes on each payment date of each month in accordance with the priority of payments as set forth in the Indenture and Credit Agreement, beginning in September 2020. Such payments are subject to certain fees for taxes, filings and administrative expenses. Upon the occurrence of a Term Loan Principal Trigger Event (as defined below), 100% of the payment of the principal proceeds are applied to the Term Loan principal after payment of certain fees and other amounts as described in the Indenture and Credit Agreement. A “Term Loan Principal Trigger Event” means as of any date of determination, an event that will be deemed to have occurred on the first date on which the aggregate principal balance of the Mortgage Assets is less than or equal to the product of (x) 75% multiplied by (y) the aggregate principal balance of the Mortgage Assets as of the closing date, plus any future advances made on such Mortgage Assets prior to such date of determination. As of December 31, 2021 and 2020, there was no Term Loan Principal Trigger Event. The Class B Notes and the Term Loan are redeemable by the Issuer upon the occurrence of certain tax events in accordance with the terms and provisions of the Indenture and Credit Agreement.

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The following tables present detailed information with respect to each borrowing under the Term Loan as of December 31, 2021 and 2020:

	December 31, 2021
	Mortgage Assets						Borrowings Under the Term Loan (1)(2)
	Principal Amount		Carrying Value		Fair Value
330 Tryon DE LLC	$	22,800,000	$	22,902,354	$	22,594,654	$	13,680,000
1389 Peachtree St, LP; 1401 Peachtree St, LP; and    1409 Peachtree St, LP	53,289,288		53,536,884		52,031,363		31,283,661
AGRE DCP Palm Springs, LLC	43,222,381		43,669,992		43,829,842		23,146,265
Patrick Henry Recovery Acquisition, LLC	18,000,000		18,041,124		18,055,377		10,800,000
University Park Berkeley, LLC	25,815,378		25,991,962		26,015,500		14,853,544
	$	163,127,047	$	164,142,316	$	162,526,736	$	93,763,470

	December 31, 2020
	Mortgage Assets						Borrowings Under the Term Loan (1)(2)
	Principal Amount		Carrying Value		Fair Value
330 Tryon DE LLC	$	22,800,000	$	22,901,294	$	22,869,879	$	13,680,000
1389 Peachtree St, LP; 1401 Peachtree St, LP; and    1409 Peachtree St, LP	50,808,453		51,068,554		50,982,247		29,897,848
AGRE DCP Palm Springs, LLC	45,294,097		45,506,051		45,519,030		24,894,939
MSC Fields Peachtree Retreat, LLC	23,308,334		23,437,198		23,428,860		13,985,001
Patrick Henry Recovery Acquisition, LLC	18,000,000		18,039,456		17,994,495		10,800,000
University Park Berkeley, LLC	23,990,786		24,131,808		24,162,710		14,326,663
	$	184,201,670	$	185,084,361	$	184,957,221	$	107,584,451

_______________

(1)Borrowings under the Term Loan bear interest at LIBOR plus 4.25% with a LIBOR floor of 1.00%, or 5.25% as of both December 31, 2021 and 2020, using LIBOR of 0.10% and 0.14%, respectively.

(2)The maturity of the Term Loan is March 14, 2025, however the maturity of each borrowing under the Term Loan matches the maturity of the respective Mortgage Asset.

For the year ended December 31, 2021, the Company received proceeds from borrowings under the Term Loan of $2.8 million and made repayment of $16.6 million. As of December 31, 2021, the remaining amount for Committed Advances and discretionary advances was $0.4 million and $6.6 million, respectively.

Repurchase Agreements

UBS Master Repurchase Agreement

On November 8, 2021, Terra Mortgage Capital III, LLC (the “Seller”), a special-purpose indirect wholly-owned subsidiary of the Company, entered into an Uncommitted Master Repurchase Agreement (the “UBS Master Repurchase Agreement”) with UBS AG ( the “Buyer”). The UBS Master Repurchase Agreement provides for advances of up to $195 million in the aggregate, which the Company expects to use to finance certain secured performing commercial real estate loans, including senior mortgage loans, where the underlying mortgaged properties consist of value-added assets with loan-to-value ratio between 65% and 80% that are typically yielding between 2.5% and 5.0%.

Advances under the UBS Master Repurchase Agreement accrue interest at a per annum pricing rate equal to the sum of (i) the 30-day LIBOR and (ii) the applicable spread, which ranges from 1.60% to 1.85%, and have a maturity date of November 7, 2024. The actual terms of financing for each asset will be determined at the time of financing in accordance with the UBS Master Repurchase Agreement. Subject to satisfaction of certain conditions, the Seller may extend the maturity date of the UBS Master Repurchase Agreement annually thereafter on mutually agreeable terms. In connection with the UBS Master Repurchase Agreement, the Company incurred deferred financing costs of $0.6 million, which are being amortized to interest expense over the term of the facility.

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The UBS Master Repurchase Agreement contains margin call provisions that provide the Buyer with certain rights in the event of a decline in the credit of the underlying assets purchased under the UBS Master Repurchase Agreement. Upon the occurrence of a margin deficit event, the Buyer may require the Seller to make a payment to reduce the purchase price to eliminate any margin deficit.

In connection with the UBS Master Repurchase Agreement, the Company entered into a Guarantee Agreement in favor of the Buyer (the “UBS Guarantee Agreement”). The UBS Master Repurchase Agreement and the UBS Guarantee Agreement contain various representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of these types. In addition, the UBS Guarantee Agreement contains financial covenants, which require the Company to maintain: (i) cash liquidity of at least the greater of $5 million or 5% of the then-current outstanding amount under the Master Repurchase Agreement; (ii) total liquidity of at least the greater of $15 million or 10% of the then-current outstanding amount under the Master Repurchase Agreement (iii) tangible net worth at an amount equal to or greater than $215.7 million plus 75% of new capital contributions thereafter; (iv) an EBITDA to interest expense ratio of not less than 1.50 to 1.00; and (v) a total indebtedness to tangible net worth ratio of not more than 3.50 to 1.00. In March 2022, the Company amended the UBS Guarantee Agreement to reduce the EBITDA to interest expense ratio of not less than 1.25 to 1.00, and as of December 31, 2021, the Company was in compliance with these covenants.

The following table presents detailed information with respect to each borrowing under the UBS Master Repurchase Agreement as of December 31, 2021:

	December 31, 2021
	Collateral						Borrowings Under Master Repurchase Agreement
	Principal Amount		Carrying Value		Fair Value		Borrowing Date	Principal Amount		Interest Rate
14th & Alice Street Owner, LLC	$	39,384,000	$	40,089,153	$	40,130,448	11/8/2021	$	25,599,600	LIBOR+1.45% (LIBOR floor of 0.1%)
NB Factory TIC 1, LLC	28,000,000		28,420,056		28,851,547		11/8/2021	18,970,000		LIBOR+1.74% (LIBOR floor of 0.1%)
	$	67,384,000	$	68,509,209	$	68,981,995		$	44,569,600

For the year ended December 31, 2021, the Company borrowed $44.6 million under the UBS Master Repurchase Agreement for the financing of new and follow-on investments, and did not make any repayments.

Goldman Master Repurchase Agreement     

On December 12, 2018, Terra Mortgage Capital I, LLC entered into an Uncommitted Master Repurchase Agreement (the “Goldman Master Repurchase Agreement”) with Goldman Sachs Bank USA. The Goldman Master Repurchase Agreement provided for advances of up to $150.0 million in the aggregate, which the Company used to finance certain secured performing commercial real estate loans.

    Advances under the Goldman Master Repurchase Agreement accrued interest at a per annum pricing rate equal to the sum of (i) the 30-day LIBOR and (ii) the applicable spread, and had a maturity date of December 12, 2020. The actual terms of financing for each asset was determined at the time of financing in accordance with the Goldman Master Repurchase Agreement.

The Goldman Master Repurchase Agreement contained margin call provisions that provide Goldman with certain rights in the event of a decline in the market value of the assets purchased under the Goldman Master Repurchase Agreement. Upon the occurrence of a margin deficit event, Goldman required the Seller to make a payment to reduce the outstanding obligation to eliminate any margin deficit. For the period from January 1, 2020 to the date of the termination of the Goldman Master Repurchase Agreement on September 3, 2020, the Company received a margin call on one of the borrowings and as a result, made a repayment of $3.4 million to reduce the outstanding obligation under the Goldman Master Repurchase Agreement.

    On September 3, 2020, the Company terminated the Goldman Master Repurchase Agreement and replaced it with the Term Loan as described above. In connection with the termination of the Goldman Master Repurchase Agreement, the Issuer repurchased all of its assets sold to Goldman pursuant to the Goldman Master Repurchase Agreement with the proceeds from the Term Loan, and Goldman released all security interests in such assets. In addition, Goldman unconditionally released the

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Company from, and terminated, the Guarantee Agreement in favor of Goldman, dated as of December 12, 2018, which provided for the guarantee by the Company of the obligations of the Issuer under the Goldman Master Repurchase Agreement, subject to certain exceptions and limitations.

For the year ended December 31, 2020, the Company received proceeds from borrowings under the Goldman Master Repurchase Agreement of $22.9 million and made repayments of $104.0 million.

Revolving Credit Facility

    On June 20, 2019, Terra LOC Portfolio I, LLC, a special-purpose indirect wholly-owned subsidiary of the Company, entered into a credit agreement with Israel Discount Bank of New York to provide for revolving credit loans of up to $35.0 million in the aggregate (“Revolving Credit Facility”), which the Company expects to use for short term financing needed to bridge the timing of anticipated loans repayments and funding obligations. Borrowings under the Revolving Credit Facility can be either prime rate loans or LIBOR rate loans and accrue interest at an annual rate of prime rate plus 1% or LIBOR plus 4% with a floor of 6%. The Revolving Credit Facility was scheduled to mature on June 20, 2020. The Revolving Credit Facility was amended to extend the maturity to October 2, 2020. On October 2, 2020, the Company amended the Revolving Credit Facility and reduced the commitment amount to $15.0 million. In connection with this amendment, the interest rate was changed to prime rate plus 1% or LIBOR plus 4% with a floor of 4.5% and the maturity was extended to September 2, 2021. On March 16, 2021, the Revolving Credit Facility was terminated. There were no amounts outstanding under the Revolving Credit Facility at December 31, 2020.

    For the year ended December 31, 2020, the Company received proceeds $35.0 million from borrowings under the Revolving Credit Facility, all of which were repaid in the same period.

Mortgage Loan Payable

    As of December 31, 2021, the Company had a $32.0 million mortgage loan payable collateralized by a multi-tenant office building that the Company acquired through foreclosure. The following table presents certain information about the mortgage loan payable as of December 31, 2021 and 2020:

			December 31, 2021						December 31, 2020
Lender	Current Interest Rate	Maturity Date	Principal Amount		Carrying Value		Carrying Value of Collateral		Principal Amount		Carrying Value		Carrying Value of Collateral
Centennial Bank	LIBOR + 3.85% (LIBOR Floor of 2.23%)	September 27, 2022	$	31,962,692	$	32,134,295	$	46,067,129	$	44,020,225	$	44,117,293	$	49,533,733

Scheduled Debt Principal Payments

    Scheduled debt principal payments for each of the five calendar years following December 31, 2021 are as follows:

Years Ending December 31,	Total
2022	$	31,962,692
2023	38,575,895
2024	100,333,261
2025	37,999,809
2026	85,125,000
Thereafter	—
	293,996,657
Unamortized deferred financing costs	(5,904,421)
Total	$	288,092,236

     At December 31, 2021 and 2020, the unamortized deferred debt issuance costs were $5.9 million and $2.2 million, respectively.

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Obligations Under Participation Agreements and Secured Borrowing

As discussed in Note 2, the Company follows the guidance in ASC 860 when accounting for loan participations and loans sold. Such guidance requires the transferred interests meet certain criteria in order for the transaction to be recorded as a sale. Loan participations and loans transferred from the Company which do not qualify for sale treatment remain on the Company’s consolidated balance sheets and the proceeds are recorded as obligations under participation agreements or secured borrowing, as applicable. As of December 31, 2021 and 2020, obligations under participation agreements had a carrying value of approximately $42.2 million and $71.6 million, respectively, and the carrying value of the loans that are associated with these obligations under participation agreements was approximately $101.0 million and $168.6 million, respectively, (see “Participation Agreements” in Note 8). Additionally, as of December 31, 2021 and 2020, secured borrowing had a carrying value of approximately $34.6 million and $18.2 million, and the carrying value of the loan that is associated with the secured borrowing was $50.3 million and $26.4 million, respectively. The weighted-average interest rate on the obligations under participation agreements and secured borrowing was approximately 10.4% and 10.2% as of December 31, 2021 and 2020, respectively.

Note 10. Commitments and Contingencies

Impact of COVID-19

    The full extent of the impact of the COVID-19 pandemic on the global economy generally, and the Company’s business in particular, will depend on future developments, which are highly uncertain and cannot be predicted with confidence. As of December 31, 2021, no contingencies have been recorded on the Company’s consolidated balance sheet as a result of the COVID-19 pandemic, however as the pandemic continues, it may have long-term impacts on the Company’s financial condition, results of operations, and cash flows. Refer to Note 2 for further discussion of COVID-19.

Unfunded Commitments on Loans Held for Investment

Certain of the Company’s loans contain provisions for future fundings, which are subject to the borrower meeting certain performance-related metrics that are monitored by the Company. These fundings amounted to approximately $71.8 million and $67.9 million as of December 31, 2021 and 2020, respectively. The Company expects to maintain sufficient cash on hand to fund such unfunded commitments, primarily through matching these commitments with principal repayments on outstanding loans.

Unfunded Investment Commitment

As discussed in Note 7, On August 3, 2020, the Company entered into a subscription agreement with RESOF whereby the Company committed to fund up to $50.0 million to purchase limited partnership interests in RESOF. As of December 31, 2021 and 2020, the unfunded investment commitment was $15.1 million and $14.1 million, respectively.

Other

The Company enters into contracts that contain a variety of indemnification provisions. The Company’s maximum exposure under these arrangements is unknown; however, the Company has not had prior claims or losses pursuant to these contracts. The Manager has reviewed the Company’s existing contracts and expects the risk of loss to the Company to be remote.

The Company is not currently subject to any material legal proceedings and, to the Company’s knowledge, no material legal proceedings are threatened against the Company. From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under contracts with its portfolio companies. While the outcome of any legal proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material adverse effect upon its financial condition or results of operations.

See Note 8 for a discussion of the Company’s commitments to the Manager.

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Note 11. Equity

Earnings Per Share

The following table presents earnings per share for the years ended December 31, 2021 and 2020:

	Years Ended December 31,
	2021		2020
Net (loss) income	$	(12,355,727)	$	5,255,730
Series A preferred stock dividend declared	(15,624)		(15,624)
Net (loss) income allocable to common stock	$	(12,371,351)	$	5,240,106
Weighted-average shares outstanding - basic and diluted	19,487,460		18,813,066
(Loss) earnings per share - basic and diluted	$	(0.63)	$	0.28

Preferred Stock Classes

Preferred Stock

    The Company’s charter gives it authority to issue 50,000,000 shares of preferred stock, $0.01 par value per share (“Preferred Stock”). The Company’s board of directors may classify any unissued shares of Preferred Stock and reclassify any previously classified but unissued shares of Preferred Stock of any series from time to time, into one or more classes or series of stock. As of December 31, 2021 and 2020, there were no Preferred Stock issued or outstanding.

Series A Preferred Stock

    On November 30, 2016, the Company’s board of directors classified and designated 125 shares of preferred stock as a separate class of preferred stock to be known as the 12.5% Series A Redeemable Cumulative Preferred Stock, $1,000 liquidation value per share (“Series A Preferred Stock”). In December 2016, the Company sold 125 shares of the Series A Preferred Stock for $125,000. The Series A Preferred Stock pays dividends at an annual rate of 12.5% of the liquidation preference. These dividends are cumulative and payable semi-annually in arrears on June 30 and December 31 of each year.

    The Series A Preferred Stock, with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Company, rank senior to common stock. The Company, at its option, may redeem the shares, with written notice, at a redemption price of $1,000 per share, plus any accrued unpaid distribution through the date of the redemption. The Series A Preferred Stock carries a redemption premium of $50 per share if redeemed prior to January 1, 2019. The Series A Preferred Stock generally has no voting rights. However, the Series A Preferred Stock holders’ voting is required if (i) authorization or issuance of any securities senior to the Series A Preferred Stock; (ii) an amendment to the Company’s charter that has a material adverse effect on the rights and preference of the Series A Preferred Stock; and (iii) any reclassification of the Series A Preferred Stock.

Common Stock

As discussed in Note 3, on March 1, 2020, TPT2 merged with and into the Company with the Company continuing as the surviving corporation. In connection with the Merger, the Company issued 2,116,785.76 shares of common stock of the Company to Terra Fund 7, the sole stockholder of TPT2, as consideration in the Merger. In addition, on March 2, 2020, the Company issued 2,457,684.59 shares of common stock of the Company in exchange for the settlement of certain participation interests in loans held by the Company and cash. As described in Note 3, Terra Fund 7 contributed the shares of the Company’s common stock received as consideration in the Merger to Terra JV and became a co-managing member of Terra JV pursuant to the JV Agreement. The JV Agreement and related stockholders agreement between Terra JV and the Company, dated March 2, 2020, provide for the joint approval of Terra Fund 5 and Terra Fund 7 with respect to certain major decisions that are taken by Terra JV and the Company. As of December 31, 2021, Terra JV owns 87.4% of the issued and outstanding shares of the Company’s common stock with the remainder held by Terra Offshore REIT, and Terra Fund 5 and Terra Fund 7 own an 87.6% and 12.4% interest, respectively, in Terra JV.    

    On September 30, 2019, the Company issued 212,691 shares of its common stock to Terra Offshore REIT at a price of $17.02 per share for total proceeds of $3.6 million. On April 29, 2020, the Company repurchased, at a price of $17.02 per share, the 212,691 shares it previously sold to Terra Offshore REIT (Note 8).

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Distributions

    The Company generally intends to distribute substantially all of its taxable income, which does not necessarily equal net income as calculated in accordance with U.S. GAAP, to its stockholders each year to comply with the REIT provisions of the Internal Revenue Code. All distributions will be made at the discretion of the Company’s board of directors and will depend upon its taxable income, financial condition, maintenance of REIT status, applicable law, and other factors as its board of directors deems relevant.

    For the years ended December 31, 2021 and 2020, the Company made distributions to Terra 5, Terra JV and Terra Offshore REIT totaling $17.1 million and $21.2 million, respectively, of which $14.6 million and $16.0 million were returns of capital, respectively. Additionally, for each of the years ended December 31, 2021 and 2020, the Company made distributions to preferred stockholders of $15,624.

Distributions paid to stockholders consist of ordinary income, capital gains, return of capital or a combination thereof for income tax purposes. The following table presents distributions per share, declared and paid during the years ended December 31, 2021 and 2020, reported for federal tax purposes and serves as a designation of capital gain distributions, if applicable, pursuant to Section 857(b)(3)(C) of the Internal Revenue Code and Treasury Regulation § 1.857-6(e):

	Years Ended December 31,
	2021		2020
Ordinary income	$	0.07	$	0.48
Capital gain	0.06		—
Return of capital	0.75		0.68
	$	0.88	$	1.16

Note 12. Subsequent Events

Management has evaluated subsequent events through the date the consolidated financial statements were available to be issued. Management has determined that there are no material events other than the one described below that would require adjustment to, or disclosure in, the Company’s consolidated financial statements.

On February 18, 2022, Terra Mortgage Capital I, LLC (the “Seller”), a special-purpose indirect wholly-owned subsidiary of the Company, entered into an Uncommitted Master Repurchase and Securities Contract Agreement (the “Repurchase Agreement”) with Goldman Sachs Bank USA ( the “Buyer”). The Repurchase Agreement provides for advances of up to $200.0 million in the aggregate, which the Company expects to use to finance the originations of certain secured performing commercial real estate loans and the acquisitions of certain secured non-performing commercial real estate loans. The Repurchase Agreement replaced the Term Loan, at which time all Mortgage Assets under the Term Loan were assigned as purchased assets under the Repurchase Agreement.

Advances under the Repurchase Agreement accrue interest at a per annum pricing rate equal to the sum of (i) Term SOFR (subject to underlying loan floors on a case-by-case basis) and (ii) the applicable spread, which ranges from 1.75% to 3.00%, and have a maturity date of February 18, 2024. The actual terms of financing for each asset will be determined at the time of financing in accordance with the Repurchase Agreement. Subject to satisfaction of certain conditions, the Seller may extend the maturity date of the Repurchase Agreement for another 12-month term.

The Repurchase Agreement contains margin call provisions that provide the Buyer with certain rights in the event of a decline in debt yield, loan-to-value ratio, and value of the underlying loans purchased under the Repurchase Agreement. Upon the occurrence of a margin deficit event, the Buyer may require the Seller to make a payment to reduce the purchase price to eliminate any margin deficit.

In connection with the Repurchase Agreement, the Company entered into a Guarantee Agreement in favor of the Buyer (the “Guarantee Agreement”), pursuant to which the Company will guarantee the obligations of the Seller under the Repurchase Agreement. Subject to certain exceptions, the maximum liability under the Repurchase Agreement will not exceed 25% of the then currently outstanding repurchase obligations for performing loans and 50% of the then currently outstanding repurchase obligations for non-performing loans under the Repurchase Agreement

The Repurchase Agreement and the Guarantee Agreement contain various representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of these types. In addition,

F-44

the Guarantee Agreement contains financial covenants, which require the Company to maintain: (i) cash liquidity of at least the greater of $5 million or 5% of the then-current outstanding amount under the Repurchase Agreement; (ii) total liquidity in an amount equal to or greater than the lesser of $15 million or 10% of the then-current outstanding amount under the Repurchase Agreement (iii) tangible net worth at an amount no less than 75% of that at closing; (iv) an EBITDA to adjusted interest expense ratio of not less than 1.50 to 1.00; and (v) a total indebtedness to tangible net worth ratio of not more than 3.00 to 1.00.

F-45

Terra Property Trust, Inc.

Schedule III – Real Estate and Accumulated Depreciation

As of December 31, 2021

			Initial Costs				Cost Capitalized Subsequent to Acquisition		Decrease in Net Investment (1)		Gross Amount at Period End
Description	Encumbrance		Land		Building and Building Improvements						Land		Building and Building Improvements		Total		Accumulated Depreciation		Date of Construction	Date Acquired	Life Used for Depreciation
Office building    in Santa    Monica, CA	$	31,962,692	$	—	$	51,308,076	$	2,508,533	$	—	$	—	$	53,816,609	$	53,816,609	$	5,491,541	2002-2004	July 30, 2018	40 years
Land in    Conshohocken, PA	—		14,703,359		—		242,071		(4,945,430)		10,000,000		—		10,000,000		—		N/A	January 9, 2019	N/A
	$	31,962,692	$	14,703,359	$	51,308,076	$	2,750,604	$	(4,945,430)	$	10,000,000	$	53,816,609	$	63,816,609	$	5,491,541

___________________________

(1)For the year ended December 31, 2019, the Company recorded an impairment charge of $1.5 million on the land in order to reduce the carrying value of the land to its estimated fair value, which was the then estimated selling price less the cost of sale. For the year ended December 31, 2021, the Company recorded another impairment charge of $3.4 million to reflect the current estimated selling price less the cost of sale.

At December 31, 2021, the aggregate cost of real estate for federal income tax purposes was $57.6 million.

    The changes in total real estate assets and accumulated depreciation for the year ended December 31, 2021 are as follows:

	Real Estate Asset			Accumulated Depreciation
	Year Ended December 31, 2021			Year Ended December 31, 2021
Balance, beginning of year	$	67,212,039	Balance, beginning of year	$	3,826,700
Acquisition through foreclosure	—		Depreciation for the year	1,664,841
Improvements	—		Balance, end of year	$	5,491,541
Impairment charge	(3,395,430)
Balance, end of year	$	63,816,609

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Terra Property Trust, Inc.

Schedule IV – Mortgage Loans on Real Estate

As of December 31, 2021

Portfolio Company (1)

Collateral Location

Property Type

Interest Payment Rates

Maximum Maturity Date (2)

Periodic Payment Terms

Prior Liens

Face Amount

Carrying Amount

Mezzanine Loans:

150 Blackstone River Road, LLC

US - MA

Industrial

8.5

%

9/6/2027

Interest Only

$

—

$

7,000,000

$

7,000,000

High Pointe Mezzanine Investments, LLC

US - SC

Student    housing

13.0

%

1/6/2024

Interest Only

—

3,000,000

3,145,614

UNIJ Sole Member, LLC (3)

US - CA

Mixed-use

15.0

%

6/1/2027

Interest Only

—

7,444,357

7,477,190

17,444,357

17,622,804

First Mortgages:

14th & Alice Street Owner, LLC

US - CA

Multifamily

LIBOR + 4.0% (0.25% Floor)

4/15/2024

Interest Only

—

39,384,000

40,089,153

1389 Peachtree St, LP; 1401 Peachtree St, LP;    1409 Peachtree St, LP

US - GA

Office

LIBOR + 4.5%

8/10/2024

Interest Only

—

53,289,288

53,536,884

330 Tryon DE LLC

US - NC

Office

LIBOR + 4.25% (0.1% Floor)

3/1/2024

Interest Only

—

22,800,000

22,902,354

606 Fayetteville LLC and 401 E. Lakewood LLC

US - NC

Land

9.0

%

8/1/2024

Interest Only

—

16,829,962

16,935,803

870 Santa Cruz, LLC

US - CA

Office

LIBOR + 6.75% (0.5% Floor)

12/15/2025

Interest Only

—

17,540,875

17,669,303

AGRE DCP Palm Springs, LLC

US - CA

Hotel - full/select service

LIBOR +5.0% (1.8% Floor)

1/1/2025

Interest Only

—

43,222,381

43,669,992

Austin H. I. Borrower LLC (4)

US - TX

Hotel - full/select service

LIBOR +7.5% (0.25% Floor)

10/1/2026

Interest Only

—

13,625,000

13,725,690

D-G Acquistion #6, LLC and D-G Quimisa, LLC

US - CA

Land

LIBOR +7.0% (0.25% Floor)

7/21/2025

Interest Only

—

8,607,092

8,605,341

Hillsborough Owners LLC (5)

US - NC

Mixed-use

LIBOR +8.0% (0.25% Floor)

11/1/2024

Interest Only

—

4,863,009

4,866,542

NB Factory TIC 1, LLC

US - UT

Student    housing

LIBOR +5.0% (0.25% Floor)

3/5/2024

Interest Only

—

28,000,000

28,420,056

Patrick Henry Recovery Acquisition, LLC

US - CA

Office

LIBOR + 2.95% (1.5% Floor)

12/1/2024

Interest Only

—

18,000,000

18,041,124

The Lux Washington, LLC

US - WA

Land

LIBOR + 7.0% (0.75% Floor)

1/22/2026

Interest Only

—

3,523,401

3,382,683

University Park Berkeley, LLC

US - CA

Multifamily

LIBOR + 4.2% (1.5% Floor)

3/1/2025

Interest Only

—

25,815,378

25,991,962

Windy Hill PV Five CM, LLC

US - CA

Office

LIBOR + 6.0% (2.05% Floor)

9/20/2023

Interest Only

—

49,954,068

50,264,568

345,454,454

348,101,455

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Terra Property Trust, Inc.

Schedule IV – Mortgage Loans on Real Estate (Continued)

As of December 31, 2021

Portfolio Company (1)	Collateral Location	Property Type	Interest Payment Rates		Maximum Maturity Date (2)	Periodic Payment Terms	Prior Liens		Face Amount		Carrying Amount
Preferred equity investments:
370 Lex Part Deux, LLC (6)(7)	US - NY	Office	LIBOR + 8.25% (2.44% Floor)		1/9/2025	Interest Only	$	—	$	60,012,639	$	60,012,639
REEC Harlem Holdings Company LLC (8)	US - NY	Mixed-use	LIBOR + 12.5%		3/9/2025	Interest Only	—		16,633,292		16,633,292
RS JZ Driggs, LLC (6)(7)(9)	US - NY	Multifamily	12.3	%	8/1/2021	Interest Only	—		15,606,409		15,754,641
									92,252,340		92,400,572
Credit facility:
William A. Shopoff & Cindy I. Shopoff (6)(7)	US-CA	Industrial	15.0	%	4/4/2023	Interest Only			25,000,000		25,206,964
									25,000,000		25,206,964
Allowance for loan losses									—		(13,658,481)
Total investments									$	480,151,151	$	469,673,314

___________________________

(1)All of the Company’s loans have a prepayment penalty provision.

(2)Maximum maturity date assumes all extension options are exercised.

(3)Participation interest is with Mavik Real Estate Special Opportunities Fund REIT, LLC, a related-party real estate investment trust managed by the Manager (Note 8).

(4)In September 2021, the Company refinanced a previously-defaulted mezzanine loan with a new first mortgage. This refinancing was accounted for as a troubled debt restructuring and the Company recognized a loss of $0.3 million on the restructuring.

(5)Participation interest is with Terra Fund 6, an affiliated fund advised by the Terra Income Advisors, an affiliate of the Company’s sponsor and Manager (Note 8).

(6)The loan participations from the Company do not qualify for sale accounting under ASC 860 and therefore, the gross amount of these loans remain in Schedule IV. See “Obligations under Participation Agreements” in Note 9 and “Transfers of Participation Interest by the Company” in Note 8 in the accompanying notes to the consolidated financial statements.

(7)The Company sold a portion of its interest in this loan through a participation agreement to Terra Fund 6 (Note 8).

(8)The Company recorded a specific allowance for loan loss of $12.8 million on this loan as a result of a decline in the value of the collateral (Note 4).

(9)This loan is in maturity default. The Company has exercised its rights and is facilitating the completion of construction of the asset in anticipation of lease up and disposition of the asset.

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Terra Property Trust, Inc.

Notes to Schedule IV - Mortgage Loans on Real Estate

December 31, 2021

	Reconciliation of Mortgage Loans on Real Estate
	Year Ended December 31, 2021
Balance, beginning of year	$	422,280,515
Additions during the period:
New mortgage loans	252,437,733
PIK interest	1,955,109
Accrual, payment and accretion of investment-related fees and other, net	1,397,519
Deductions during the period:
Collections of principal	(196,780,456)
Provision for loan losses	(10,904,163)
Amortization of premium	(61,390)
Realized loss on loan repayments	(651,553)
Balance, end of year	$	469,673,314

F-49

SIGNATURES

Pursuant to the requirements 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.

Date: March 11, 2022

TERRA PROPERTY TRUST, INC.
By:	/s/ Vikram S. Uppal
	Vikram S. Uppal
	Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ Gregory M. Pinkus
	Gregory M. Pinkus
	Chief Financial Officer and Chief Operating Officer,
	(Principal Financial and 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 on the dates indicated.

Signature	Title	Date
/s/ Vikram S. Uppal	Chairman of the Board and Chief Executive Officer	March 11, 2022
Vikram S. Uppal	(Principal Executive Officer)
/s/ Gregory M. Pinkus	Chief Financial Officer, Chief Operating Officer, Treasurer and Secretary (Principal Financial and Accounting Officer)	March 11, 2022
Gregory M. Pinkus
/s/ Roger H. Beless	Director	March 11, 2022
Roger H. Beless
/s/ Michael L. Evans	Director	March 11, 2022
Michael L. Evans

62

EX-4.1

Exhibit 4.1

DESCRIPTION OF SECURITIES

REGISTERED UNDER SECTION 12 OF

THE SECURITIES EXCHANGE ACT OF 1934

The following is a brief summary of the material terms of the securities of Terra Property Trust, Inc. (the “Company,” “we,” “us” and “our”) registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This summary description is not meant to be complete. The particular terms of any security are subject to and qualified in their entirety by reference to Maryland law and our charter and bylaws, copies of which has been filed by us with the Securities and Exchange Commission.

General

Our charter provides that we may issue up to 450,000,000 shares of common stock, $0.01 par value per share, and up to 50,000,000 shares of preferred stock, $0.01 par value per share. Our charter authorizes our board of directors to amend our charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we are authorized to issue with the approval of a majority of our entire board of directors and without stockholder approval. Under Maryland law, our stockholders are not generally liable for our debts or obligations.

Shares of Common Stock

Subject to the preferential rights, if any, of holders of any other class or series of our stock and to the provisions of our charter regarding the restrictions on ownership and transfer of our stock, holders of outstanding shares of common stock are entitled to receive dividends on such shares of common stock out of assets legally available therefor if, as and when authorized by our board of directors and declared by us, and the holders of outstanding shares of common stock are entitled to share ratably in our assets legally available for distribution to our stockholders in the event of our liquidation, dissolution or winding up after payment of or adequate provision for all our known debts and liabilities.

Subject to the provisions of our charter regarding the restrictions on ownership and transfer of our stock and except as may otherwise be specified in our charter, each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders, including the election of directors and the holders of shares of our common stock will possess the exclusive voting power. A plurality of the votes cast in the election of directors is sufficient to elect a director and there is no cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of stock entitled to vote in the election of directors can elect all of the directors then standing for election, and the holders of the remaining shares will not be able to elect any directors. The shares of common stock held by Terra Secured Income Fund 5, LLC (“Terra Fund 5”) are subject to the Voting Agreement described in greater detail under “Item 7. Certain Relationships and Related Transactions-Voting Agreement” of our Annual Report on Form 10-K for the year ended December 31, 2019.

Holders of shares of common stock have no preference, conversion, exchange, sinking fund, redemption or appraisal rights and have no pre-emptive rights to subscribe for any of our securities. Subject to the provisions of our charter regarding the restrictions on ownership and transfer of our stock, shares of common stock will have equal dividend, liquidation and other rights.

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Under the Maryland General Corporation Law (the “MGCL”), a Maryland corporation generally cannot dissolve, amend its charter, merge or consolidate with another entity, convert into another entity, sell all or substantially all of its assets or engage in a statutory share exchange unless the action is advised by our board of directors and approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter, unless a lesser percentage (but not less than a majority of all of the votes entitled to be cast on the matter) is specified in the corporation’s charter. Our charter provides that these actions may be approved by a majority of all of the votes entitled to be cast on the matter, except that certain amendments to the provisions of our charter related to the removal of directors and the restrictions on ownership and transfer of our stock, and the vote required to amend such provisions or to amend such vote requirement, must be approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the amendment. Maryland law also permits a Maryland corporation to transfer all or substantially all of its assets without the approval of the stockholders of the corporation to an entity if all of the equity interests of the entity are owned, directly or indirectly, by the corporation.

Preferred Stock

Our charter authorizes our Board to classify any unissued shares of our preferred stock and to reclassify any previously classified but unissued shares of preferred stock into other classes or series of stock. Before the issuance of shares of each class or series, our Board is required by Maryland law and by our charter to set, subject to our charter restrictions on ownership and transfer of stock, the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption for each class or series.

Series A Preferred Stock

As of December 31, 2021, we had outstanding 125 shares 12.5% Series A Cumulative Non-Voting Preferred Stock (“Series A Preferred Stock”). The holders of the Series A Preferred Stock are entitled to receive cumulative cash dividends at the rate of 12.5% per annum of the liquidation preference. At our election, the Series A Preferred Stock is redeemable, in whole or in part, for an amount equal to its liquidation preference, plus any accrued and unpaid dividends. The Series A Preferred Stock is not convertible into shares of any other class or series of stock. The Series A Preferred Stock is entitled to a liquidation preference of  $1,000 per share.

Power to Reclassify our Unissued Shares of Stock

Our charter authorizes our board of directors to classify and reclassify any unissued shares of common or preferred stock into other classes or series of stock, including one or more classes or series of stock that have priority with respect to voting rights, dividends or upon liquidation over our common stock, and authorize us to issue the newly-classified shares. Prior to the issuance of shares of each new class or series, our board of directors is required by Maryland law and by our charter to set, subject to the provisions of our charter regarding the restrictions on ownership and transfer of our stock, the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption for each class or series. Our board of directors may take these actions without stockholder approval unless stockholder approval is required by

LEGAL02/41470547v2

the terms of any other class or series of our stock or the rules of any stock exchange or automatic quotation system on which our securities may be listed or traded. Therefore, our board could authorize the issuance of shares of common or preferred stock with terms and conditions that could have the effect of delaying, deferring or preventing a change in control or other transaction that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders. No shares of preferred stock are presently outstanding other than the Series A Preferred Stock, and we have no present plans to issue any additional shares of preferred stock.

Power to Increase or Decrease Authorized Shares of Stock and Issue Additional Shares of Common and Preferred Stock

We believe that the power of our board of directors to amend our charter from time to time to increase or decrease the number of authorized shares of our stock, to authorize us to issue additional authorized but unissued shares of common or preferred stock and to classify or reclassify unissued shares of common or preferred stock and thereafter to authorize us to issue such classified or reclassified shares of stock will provide us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs that might arise. The additional classes or series, as well as the additional shares of common stock, will be available for issuance without further action by our stockholders, unless such approval is required by the terms of any other class or series of our stock or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded. Although our board of directors does not intend to do so, it could authorize us to issue a class or series of stock that could, depending upon the terms of the particular class or series, delay, defer or prevent a change in control or other transaction that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders.

Restrictions on Ownership and Transfer

In order for us to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), shares of our stock must be owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to be a REIT has been made) or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of the outstanding shares of our stock may be owned, directly or constructively, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year (other than the first year for which an election to be a REIT has been made). To qualify as a REIT, we must satisfy other requirements as well.

Our charter contains restrictions on the ownership and transfer of our stock. The relevant sections of our charter provide that, subject to the exceptions described below, no person or entity may own, or be deemed to own, by virtue of the applicable constructive ownership provisions of the Code, more than 9.8% by value or number of shares, whichever is more restrictive, of the outstanding shares of our common stock, the outstanding shares of any class or series of our preferred stock or the aggregate outstanding shares of all classes and series of our capital stock. We refer to this limit as the “ownership limit.” A person or entity that becomes subject to the ownership limit by virtue of a violative transfer that results in a transfer to a trust, as described below, is referred to as a “prohibited owner” if, had the violative transfer been effective, the person would beneficially own or constructively own shares of our

LEGAL02/41470547v2

stock and, if appropriate in the context, shall also mean any person who would have been the record owner of the shares that the prohibited owner would have so owned.

The constructive ownership rules under the Code are complex and may cause shares of stock owned beneficially or constructively by a group of related individuals and/or entities to be owned beneficially or constructively by one individual or entity. As a result, the acquisition of less than 9.8% by value or number of shares, whichever is more restrictive, of the outstanding shares of our common stock, any class or series of our preferred stock or the aggregate outstanding shares of all classes and series of our capital stock (or the acquisition of an interest in an entity that owns, beneficially or constructively, shares of our stock) by an individual or entity, could, nevertheless, cause that individual or entity, or another individual or entity, to own beneficially or constructively in excess of the ownership limit.

Our board of directors may, in its sole discretion, subject to such conditions as it may determine and the receipt of certain representations and undertakings, prospectively or retroactively, waive all or any component of the ownership limit or establish a different limit on ownership, or excepted holder limit, for a particular stockholder if the stockholder’s ownership in excess of the ownership limit would not result in our being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise would not result in our failing to qualify as a REIT. As a condition of its waiver or grant of an excepted holder limit, our board of directors may, but is not required to, require an opinion of counsel or the Internal Revenue Service ruling satisfactory to our board of directors with respect to our qualification as a REIT.

In connection with granting a waiver of the ownership limit, creating an excepted holder limit or at any other time, our board of directors may from time to time increase or decrease the ownership limit or any component thereof for all other persons and entities unless, after giving effect to such increase we would be, “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or we would otherwise fail to qualify as a REIT. Prior to the modification of the ownership limit, our board of directors may require such opinions of counsel, affidavits, undertakings or agreements as it may deem necessary or advisable in order to determine or ensure our qualification as a REIT. A reduced ownership limit will not apply to any person or entity whose percentage ownership of our common stock, preferred stock of any class or series or stock of all classes and series, as applicable, is in excess of such decreased ownership limit until such time as such person’s or entity’s percentage ownership of our common stock or preferred stock of such class or series or stock of all classes and series, as applicable, equals or falls below the decreased ownership limit, but any further acquisition of shares of our common stock, preferred stock of such class or series or stock of all classes and series, as applicable, in excess of such percentage ownership of our common stock, preferred stock or stock of all classes and series will be in violation of the ownership limit.

Our charter further prohibits:

•any person from beneficially or constructively owning, applying certain attribution rules of the Code, shares of our capital stock (i) that would result in our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or (ii) that would otherwise cause us to fail to qualify as a REIT; and

LEGAL02/41470547v2

•any person from transferring shares of our stock if such transfer would result in shares of our stock being beneficially owned by fewer than 100 persons (determined without reference to any rules of attribution).

Any person who acquires or attempts or intends to acquire beneficial or constructive ownership of shares of our stock that will or may violate the ownership limit or any of the other foregoing restrictions on ownership and transfer of our stock, or who would have owned shares of our stock transferred to the trust as described below, must immediately give written notice to us of such event or, in the case of an attempted or proposed transaction, must give at least 15 days prior written notice to us and provide us with such other information as we may request in order to determine the effect of such transfer on our qualification as a REIT. The foregoing restrictions on ownership and transfer of our stock will not apply if our board of directors determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT or that compliance with the restrictions and limitations on ownership and transfer of our stock described above is no longer required in order for us to qualify as a REIT.

If any transfer of shares of our stock would result in shares of our stock being beneficially owned by fewer than 100 persons, such transfer will be null and void and the intended transferee will acquire no rights in such shares. In addition, if any purported transfer of shares of our stock or any other event would otherwise result in any person violating the ownership limit or an excepted holder limit established by our board of directors, or result in us being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise failing to qualify as a REIT, then that number of shares (rounded up to the nearest whole share) that would cause us to violate such restrictions will be automatically transferred to, and held by, a trust for the exclusive benefit of one or more charitable organizations selected by us and the intended transferee will acquire no rights in such shares. The automatic transfer will be effective as of the close of business on the business day prior to the date of the violative transfer or other event that results in a transfer to the trust. If the transfer to the trust as described above is not automatically effective, for any reason, to prevent violation of the applicable ownership limit or our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise failing to qualify as a REIT, then our charter provides that the transfer of the shares will be null and void and the intended transferee will acquire no rights in such shares.

Shares of stock transferred to the trustee are deemed offered for sale to us, or our designee, at a price per share equal to the lesser of  (1) the price paid by the prohibited owner for the shares (or, if the event that resulted in the transfer to the trust did not involve a purchase of such shares of stock at market price, the market price on the day of the event which resulted in the transfer of such shares of stock to the trust) and (2) the market price on the date we accept, or our designee accepts, such offer. We may reduce the amount payable by the amount of any dividend or other distribution that we have paid to the prohibited owner before we discovered that the shares had been automatically transferred to the trust and that is then owed to the trustee as described above, and we may pay the amount of any such reduction to the trustee for the benefit of the charitable beneficiary. We have the right to accept such offer until the trustee has sold the shares of our stock held in the trust as discussed below. Upon a sale to us, the interest of the charitable beneficiary in the shares sold terminates, the trustee must distribute the net proceeds of the sale to the prohibited owner and any dividends, other distributions or other amounts held by the trustee with respect to such shares of stock must be paid to the charitable beneficiary.

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If we do not buy the shares, the trustee must, within 20 days of receiving notice from us of the transfer of shares to the trust, sell the shares to a person or entity designated by the trustee who could own the shares without violating the ownership limit or the other restrictions on ownership and transfer of our stock. After the sale of the shares, the interest of the charitable beneficiary in the shares transferred to the trust will terminate and the trustee must distribute to the prohibited owner an amount equal to the lesser of (1) the price paid by the prohibited owner for the shares (or, if the event which resulted in the transfer to the trust did not involve a purchase of such shares at market price, the market price on the day of the event which resulted in the transfer of such shares of stock to the trust) and (2) the sales proceeds (net of commissions and other expenses of sale) received by the trust for the shares. The trustee may reduce the amount payable to the prohibited owner by the amount of any dividend or other distribution that we paid to the prohibited owner before we discovered that the shares had been automatically transferred to the trust and that are then owed to the trustee as described above. Any net sales proceeds in excess of the amount payable to the prohibited owner must be immediately paid to the charitable beneficiary of the trust, together with any other amounts held by the trustee for the beneficiary of the trust with respect to such shares. In addition, if, prior to discovery by us that shares of stock have been transferred to a trust, such shares of stock are sold by a prohibited owner, then such shares will be deemed to have been sold on behalf of the trust and to the extent that the prohibited owner received an amount for or in respect of such shares that exceeds the amount that such prohibited owner was entitled to receive, such excess amount must be paid to the trustee upon demand. The prohibited owner has no rights in the shares held by the trustee.

 The trustee will be designated by us and must be unaffiliated with us and with any prohibited owner. Prior to the sale of any shares by the trust, the trustee will receive, in trust for the charitable beneficiary of the trust, all dividends and other distributions paid by us with respect to the shares held in trust and may also exercise all voting rights with respect to the shares held in trust. These rights will be exercised for the exclusive benefit of the charitable beneficiary of the trust. Any dividend or other distribution paid prior to our discovery that shares of stock have been transferred to the trust must be paid by the recipient to the trustee upon demand.

Subject to Maryland law, effective as of the date that the shares have been transferred to the trust, the trustee will have the authority, at the trustee’s sole discretion:

•to rescind as void any vote cast by a prohibited owner prior to our discovery that the shares have been transferred to the trust; and

•to recast the vote in accordance with the desires of the trustee acting for the benefit of the beneficiary of the trust.

However, if we have already taken irreversible corporate action, then the trustee may not rescind and recast the vote. In addition, if our board of directors determines that a proposed transfer would violate the restrictions on ownership and transfer of our stock, our board of directors may take such action as it deems advisable to refuse to give effect to or to prevent such transfer, including, but not limited to, causing us to redeem the shares of stock, refusing to give effect to the transfer on our books or instituting proceedings to enjoin the transfer.

Every owner of 5% or more (or such lower percentage as required by the Code or the regulations promulgated thereunder) of our stock, within 30 days after the end of each taxable year, must give us written notice, stating the stockholder’s name and address, the number of shares of each class and series

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of our stock that the stockholder beneficially owns and a description of the manner in which the shares are held. Each such owner must provide us in writing with such additional information as we may request in order to determine the effect, if any, of the stockholder’s beneficial ownership on our qualification as a REIT and to ensure compliance with the ownership limit. In addition, each stockholder must provide us in writing with such information as we may request in good faith in order to determine our qualification as a REIT and to comply with the requirements of any taxing authority or governmental authority or to determine such compliance.

Any certificates representing shares of our stock will bear a legend referring to the restrictions described above.

These restrictions on ownership and transfer could delay, defer or prevent a transaction or a change in control that might involve a premium price for our common stock or otherwise be in the best interest of the stockholders.

Certain Provisions of the Maryland General Corporation Law and our Charter and Bylaws

The following description of certain provisions of Maryland law and our charter and bylaws is only a summary. For a complete description, we refer you to the MGCL and to our charter and our bylaws, the forms of which are filed as exhibits to this registration statement.

Our Board of Directors

Our charter and bylaws provide that the number of directors we have may be established only by our board of directors but may not be fewer than the minimum number required under the MGCL, which is one, and our bylaws provide that the number of our directors may not be more than 15. Because our board of directors has the power to amend our bylaws, it could amend the bylaws to change that range. Subject to the terms of any class or series of preferred stock, vacancies on our board of directors may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum, and, if our board of directors is classified, any director elected to fill a vacancy will hold office for the remainder of the full term of the directorship in which the vacancy occurred and until his or her successor is duly elected and qualifies. Pursuant to the Voting Agreement, for so long as the Voting Agreement remains in effect, in the case of any vacancy on the board of directors created by the death, disability, retirement, resignation, refusal to stand for reelection, unwillingness to nominate or removal of a director previously nominated by a party to the Voting Agreement, so long as such party is entitled under the Voting Agreement to nominate an individual to fill such vacancy, the board of directors will fill such vacancy with the individual nominated by such party.

Except as may be provided with respect to any class or series of our stock, at each annual meeting of our stockholders, each of our directors will be elected by our stockholders to serve until the next annual meeting of our stockholders and until his or her successor is duly elected and qualifies. Our directors are elected by a plurality of the votes cast in the election of directors. There is no cumulative voting in the election of directors or otherwise, which means that the holders of a majority of the outstanding shares entitled to vote in the election of directors can elect all of the directors then standing for election.

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Removal of Directors

Our charter provides that, subject to the rights of holders of any class or series of our preferred stock to elect or remove one or more directors, a director may be removed only with cause and only by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast generally in the election of directors. This provision, when coupled with the exclusive power of our board of directors to fill vacancies on our board of directors, precludes stockholders from (i) removing incumbent directors except upon a substantial affirmative vote and with cause and (ii) filling the vacancies created by such removal with their own nominees.

Business Combinations

Under the MGCL, certain “business combinations” (including a merger, consolidation, statutory share exchange or, in certain circumstances, an asset transfer or issuance or reclassification of equity securities) between a Maryland corporation and an interested stockholder (defined generally as any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation’s outstanding stock or an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then outstanding voting stock of the corporation) or an affiliate of such an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. Thereafter, any such business combination must generally be recommended by the board of directors of such corporation and approved by the affirmative vote of at least (1) 80% of the votes entitled to be cast by holders of outstanding voting stock of the corporation and (2) two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom (or with whose affiliate) the business combination is to be effected or held by an affiliate or associate of the interested stockholder, unless, among other conditions, the corporation’s common stockholders receive a minimum price (as defined in the MGCL) for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its shares. A person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which the person otherwise would have become an interested stockholder. A Maryland corporation’s board of directors may provide that its approval is subject to compliance with any terms and conditions determined by it.

These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by a Maryland corporation’s board of directors prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has by resolution exempted business combinations between us and (i) any other person, provided, that such business combination is first approved by our board of directors (including a majority of our directors who are not affiliates or associates of such person), (ii) Terra Fund 5 or its affiliates and associates, and (iii) any person acting in concert with those persons identified in clauses (i) or (ii) of this sentence. As a result, any person described above may be able to enter into business combinations with us that may not be in the best interest of our stockholders, without compliance by us with the 5-year waiting period, the supermajority vote requirements and other provisions of the statute. There is no assurance that our board of directors will not amend or repeal this resolution in the future.

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The business combination statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.

Control Share Acquisitions

The MGCL provides that a holder of  “control shares” of a Maryland corporation acquired in a “control share acquisition” has no voting rights with respect to the control shares except to the extent approved by the affirmative vote of at least two-thirds of the votes entitled to be cast on the matter, excluding shares of stock of the corporation in respect of which any of the following persons is entitled to exercise or direct the exercise of the voting power of such shares in the election of directors: (i) a person who makes or proposes to make a control share acquisition, (ii) an officer of the corporation or (iii) an employee of the corporation who is also a director of the corporation. “Control shares” are voting shares of stock which, if aggregated with all other such shares of stock owned by the acquirer, or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting power: (i) one-tenth or more but less than one-third; (ii) one-third or more but less than a majority; or (iii) a majority or more of all voting power. Control shares do not include shares that the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval or shares acquired directly from the corporation. A “control share acquisition” means the acquisition of issued and outstanding control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses and delivering an “acquiring person statement” as described in the MGCL), may compel the board of directors to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting.

If voting rights are not approved at the meeting or if the acquiring person does not deliver an “acquiring person statement” as required by the statute, then, subject to certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquirer or as of any meeting of stockholders at which the voting rights of such shares are considered and not approved. If voting rights for control shares are approved at a stockholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquirer in the control share acquisition.

The control share acquisition statute does not apply to (i) shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (ii) acquisitions approved or exempted by the charter or bylaws of the corporation.

Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of shares of our stock. There is no assurance that such provision will not be amended or eliminated at any time in the future.

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Subtitle 8

Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to any or all of five provisions of the MGCL which provide for:

•a classified board;

•a two-thirds vote requirement for removing a director;

•a requirement that the number of directors be fixed only by vote of the directors;

•a requirement that a vacancy on the board be filled only by the remaining directors in office and (if the board is classified) for the remainder of the full term of the class of directors in which the vacancy occurred; and

•a majority requirement for the calling of a stockholder-requested special meeting of stockholders.

Our charter provides that, at such time as we are able to make a Subtitle 8 election, vacancies on our board may be filled only by the remaining directors and (if our board is classified in the future) for the remainder of the full term of the directorship in which the vacancy occurred. Through provisions in our charter and bylaws unrelated to Subtitle 8, we already (i) require the affirmative vote of stockholders entitled to cast not less than two-thirds of all of the votes entitled to be cast generally in the election of directors for the removal of any director from the board, with cause, (ii) vest in the board the exclusive power to fix the number of directorships and (iii) require, unless called by our Chairman, our Chief Executive Officer, our President or our board of directors, the written request of stockholders entitled to cast not less than a majority of all votes entitled to be cast on any matter that may properly be considered at a meeting of stockholders to call a special meeting of our stockholders to act on such matter.

Meetings of Stockholders

Pursuant to our bylaws, a meeting of our stockholders for the election of directors and the transaction of any business will be held annually on a date and at the time and place set by our board of directors. Our Chairman, our Chief Executive Officer, our President or our board of directors may call a special meeting of our stockholders. Subject to the procedural requirements specified in our bylaws, a special meeting of our stockholders to act on any matter that may properly be brought before a meeting of our stockholders must also be called by our Secretary upon the written request of the stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting on such matter and containing the information required by our bylaws. Our Secretary will inform the requesting stockholders of the reasonably estimated cost of preparing and delivering the notice of meeting (including our proxy materials), and the requesting stockholder must pay such estimated cost before our Secretary is required to prepare and deliver the notice of the special meeting. Only the matters set forth in the notice of special meeting may be considered and acted upon at such meeting.

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Exclusive Forum for Certain Litigation

Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or if that court does not have jurisdiction, the U.S. District Court for the District of Maryland, Northern Division, will be the sole and exclusive forum for (a) any Internal Corporate Claim, as such term is defined in Section 1-101(p) of the MGCL (b) any derivative action or proceeding brought on our behalf, other than actions arising under the federal securities laws (c) any action asserting a claim of breach of any duty owed by any director or officer or other employee to us or to our stockholders, (d) any action asserting a claim against us or any director or officer or other employee arising pursuant to any provision of the MGCL or our charter or bylaws, or (e) any action asserting a claim against us or any director or officer or other employee that is governed by the internal affairs doctrine and no such action may be brought in any court sitting out of the State of Maryland unless we consent in writing to such court.

Amendments to our Charter and Bylaws

Except for amendments to the provisions of our charter relating to the removal of directors and the restrictions on ownership and transfer of our stock, and the vote required to amend these provisions or to amend such vote requirement (each of which must be advised by our board of directors and approved by the affirmative vote of stockholders entitled to cast not less than two-thirds of all the votes entitled to be cast on the matter), our charter generally may be amended only if advised by our board of directors and approved by the affirmative vote of stockholders entitled to cast a majority of all of the votes entitled to be cast on the matter.

Our board of directors has the exclusive power to adopt, alter or repeal any provision of our bylaws and to make new bylaws.

Dissolution of Our Company

The dissolution of our company must be advised by a majority of our entire board of directors and approved by the affirmative vote of stockholders entitled to cast a majority of all of the votes entitled to be cast on the matter.

Advance Notice of Director Nomination and New Business

Our bylaws provide that, with respect to an annual meeting of stockholders, nominations of individuals for election to our board of directors and the proposal of other business to be considered by stockholders may be made only (i) pursuant to our notice of the meeting, (ii) by or at the direction of our board of directors or (iii) by a stockholder who was a stockholder of record as of the record date set by our board of directors for the purpose of determining stockholders entitled to vote at such annual meeting, at the time of giving the notice required by our bylaws and at the time of the meeting, who is entitled to vote at the meeting on such business or in the election of such nominee and who has provided notice to us within the time period, and containing the information and other materials, specified by the advance notice provisions set forth in our bylaws.

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With respect to special meetings of stockholders, only the business specified in our notice of meeting may be brought before the meeting. Nominations of individuals for election as directors may be made only (i) by or at the direction of our board of directors or (ii) provided that the meeting has been called for the purpose of electing directors, by a stockholder who was a stockholder of record as of the record date set by our board of directors for the purpose of determining stockholders entitled to vote as such special meeting, at the time of giving notice and at the time of the special meeting, who is entitled to vote at the meeting in the election of such nominee and who has provided notice to us within the time period, and containing the information and other materials, specified by the advance notice provisions set forth in our bylaws.

Anti-Takeover Effect of Certain Provisions of Maryland Law and Our Charter and Bylaws

Our charter and bylaws and Maryland law contain provisions that may delay, defer or prevent a change in control or other transaction that might involve a premium price for shares of our common stock or otherwise be in the best interests of our stockholders, including supermajority vote requirements and advance notice requirements for director nominations and stockholder proposals. Likewise, if the provision in the bylaws opting out of the control share acquisition provisions of the MGCL were rescinded or if we were to repeal the exemption for certain business combinations from the business combination provisions of the MGCL or opt in to the classified board or other provisions of Subtitle 8, these provisions of the MGCL could have similar anti-takeover effects.

Indemnification and Limitation of Directors’ and Officers’ Liability

Maryland law permits a Maryland corporation to include in its charter a provision eliminating the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty that was established by a final judgment and was material to the cause of action. Our charter contains a provision that eliminates the liability of our directors and officers to the maximum extent permitted by Maryland law.

The MGCL requires us (unless our charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made a party by reason of his or her service in that capacity. The MGCL permits us to indemnify our present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or threatened to be made a party by reason of their service in those or other capacities unless it is established that:

•the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty;

•the director or officer actually received an improper personal benefit in money, property or services; or

•in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.

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Under the MGCL, we may not indemnify a director or officer in a suit by us or in our right in which the director or officer was adjudged liable to us or in a suit in which the director or officer was adjudged liable on the basis that personal benefit was improperly received. Nevertheless, a court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standard of conduct or was adjudged liable on the basis that personal benefit was improperly received. However, indemnification for an adverse judgment in a suit by us or in our right, or for a judgment of liability on the basis that personal benefit was improperly received, is limited to expenses.

In addition, the MGCL permits us to advance reasonable expenses to a director or officer upon our receipt of:

•a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by us; and

•a written undertaking by the director or officer or on the director’s or officer’s behalf to repay the amount paid or reimbursed by us if it is ultimately determined that the director or officer did not meet the standard of conduct.

Our charter authorizes us to obligate ourselves and our bylaws obligate us, to the fullest extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to:

•any present or former director or officer who is made or threatened to be made a party to or witness in the proceeding by reason of his or her service in that capacity;

•any individual who, while a director or officer of our company and at our request, serves or has served as a director, officer, partner, manager, managing member or trustee of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or any other enterprise and who is made or threatened to be made a party to or witness in the proceeding by reason of his or her service in that capacity; or

•any individual who served any predecessor of our company, including the Terra Secured Income Fund, LLC, Terra Secured Income Fund 2, LLC, Terra Secured Income Fund 3, LLC, Terra Secured Income Fund 4, LLC and Terra Secured Income Fund 5, LLC (collectively, “Terra Funds”), in a similar capacity, who is made or threatened to be made a party to or witness in the proceeding by reason of his or her service in such capacity.

Our charter and bylaws also permit us to indemnify and advance expenses to any employee or agent of our company or a predecessor of our company, including the Terra Funds.

Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

REIT Qualification

Our charter provides that our board of directors may authorize us to revoke or otherwise terminate our REIT election, without approval of our stockholders, if it determines that it is no longer in

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our best interests to attempt to qualify, or to continue to qualify, as a REIT. Our charter also provides that our board of directors may determine that compliance with any restriction or limitation on ownership and transfer of our stock is no longer required for us to qualify as a REIT.

Transfer Agent and Registrar

Conduent Securities Services, Inc. is the transfer agent and registrar for our common stock.

6.00% Notes due 2026

The following is a brief summary of the material terms of our 6.00% Notes due 2026 (the “notes”). This summary is not meant to be complete and is subject to and qualified in its entirety by reference to (i) the indenture dated June 10, 2021, between us and U.S. Bank National Association, as trustee (the “trustee”), and (ii) the supplemental indenture thereto, dated as of June 10, 2021, which we collectively refer to herein as the “indenture” and copies of which are filed as exhibits to this Annual Report on Form 10-K.

General

The notes will mature on June 30, 2026. The principal payable at maturity will be 100% of the aggregate principal amount. The interest rate of the notes is 6.00% per year and will be paid every March 30, June 30, September 30 and December 30, and the regular record dates for interest payments will be every March 15, June 15, September 15 and December 15. If an interest payment date falls on a non-business day, the applicable interest payment will be made on the next business day and no additional interest will accrue as a result of such delayed payment. The interest periods will be the periods from and including an interest payment date to, but excluding, the next interest payment date or the stated maturity date, as the case may be.

The notes are issued in denominations of $25 and integral multiples of $25 in excess thereof. The notes are not subject to any sinking fund and holders of the notes do not have the option to have the notes repaid prior to the stated maturity date.

Except as described under the captions “Events of Default,” “Other Covenants,” and “Merger or Consolidation” below, the indenture does not contain any provisions that give holders of the notes protection in the event we issue a large amount of debt or we are acquired by another entity.

We have the ability to issue indenture securities with terms different from the notes and, without the consent of the holders thereof, to reopen the notes and issue additional notes.

Optional Redemption

The notes may be redeemed in whole or in part at any time or from time to time at our option on or after June 30, 2023, upon not less than 30 days nor more than 60 days written notice by mail prior to the date fixed for redemption thereof, at a redemption price of 100% of the outstanding principal amount of the notes to be redeemed plus accrued and unpaid interest payments otherwise payable thereon for the then-current quarterly interest period accrued to the date fixed for redemption.

Holders of the notes may be prevented from exchanging or transferring the notes when they are subject to redemption. In case any notes are to be redeemed in part only, the redemption notice will provide that, upon surrender of such note, holders of the notes will receive, without a charge, a new note or notes of authorized denominations representing the principal amount of the remaining unredeemed notes.

If we redeem only some of the notes, the trustee will determine the method for selection of the particular notes to be redeemed, in accordance with the indenture and in accordance with the rules of any national securities exchange or quotation system on which the notes are listed. Unless we default in

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payment of the redemption price, on and after the date of redemption, interest will cease to accrue on the notes called for redemption.

Global Securities

Each note is issued in book-entry form and represented by a global security that we deposited with and registered in the name of DTC, or its nominee. A global security may not be transferred to or registered in the name of anyone other than the depositary or its nominee unless special termination situations arise. As a result of these arrangements, the depositary, or its nominee, is the sole registered owner and holder of all the notes represented by a global security, and investors are permitted to own only beneficial interests in a global security. For more information about these arrangements, see “Book-Entry Procedures” below.

Termination of a Global Security

If a global security is terminated for any reason, interests in it will be exchanged for certificates in non-book-entry form (certificated securities). After that exchange, the choice of whether to hold the certificated notes directly or in street name will be up to the holder thereof. Holders must consult their own banks or brokers to find out how to have their interests in a global security transferred on termination to their own names, so that they will be holders.

Payment and Paying Agents

We will pay interest to the person listed in the trustee’s records as the owner of the notes at the close of business on a particular day in advance of each due date for interest, even if that person no longer owns the note on the interest due date. That day, usually about two weeks in advance of the interest due date, is called the “record date.” Because we will pay all the interest for an interest period to the holders on the record date, holders buying and selling the notes must work out between themselves the appropriate purchase price. The most common manner is to adjust the sales price of the notes to prorate interest fairly between buyer and seller based on their respective ownership periods within the particular interest period. This prorated interest amount is called “accrued interest.”

Payments on Global Securities

We will make payments on the notes so long as they are represented by a global security in accordance with the applicable policies of the depositary as in effect from time to time. Under those policies, we will make payments directly to the depositary, or its nominee, and not to any indirect holders who own beneficial interests in the global security. An indirect holder’s right to those payments will be governed by the rules and practices of the depositary and its participants, as described under “Book-Entry Procedures.”

Payments on Certificated Securities

In the event the notes become represented by certificated securities, we will make payments on the notes as follows. We will pay interest that is due on an interest payment date to the holder of the notes as shown on the trustee’s records as of the close of business on the regular record date at our office in New York, New York. We will make all payments of principal and premium, if any, by check at the office of the applicable trustee in New York, New York and/or at other offices that may be specified in a notice to holders against surrender of the note.

Alternatively, at our option, we may pay any cash interest that becomes due on the notes by mailing a check to the holder at his, her or its address shown on the trustee’s records as of the close of business on the regular record date or by transfer to an account at a bank in the United States, in either case, on the due date.

Payment When Offices Are Closed

If any payment is due on the notes on a day that is not a business day, we will make the payment on the next day that is a business day. Payments made on the next business day in this situation will be

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treated under the indenture as if they were made on the original due date. Such payment will not result in a default under the notes or the indenture, and no interest will accrue on the payment amount from the original due date to the next day that is a business day.

Book-entry and other indirect holders should consult their banks or brokers for information on how they will receive payments on the notes.

Events of Default

Holders of the notes will have rights if an Event of Default occurs in respect of the notes, as described later in this subsection.

The term “Event of Default” in respect of the notes means any of the following:

•we do not pay the principal (or premium, if any) of any note when due;

•we do not pay interest on any note when due, and such default is not cured within 30 days;

•we remain in breach of a covenant in respect of the notes for 60 days after we receive a written notice of default stating we are in breach (the notice must be sent by either the trustee or holders of at least 25% of the principal amount of the notes); or

•we file for bankruptcy or certain other events of bankruptcy, insolvency or reorganization occur and in the case of certain orders or decrees entered against us under bankruptcy law, such order or decree remains undischarged or unstayed for a period of 60 days.

An Event of Default for the notes does not necessarily constitute an Event of Default for any other series of debt securities issued under the same or any other indenture. The trustee may withhold notice to the holders of the notes of any default, except in the payment of principal or interest, if it in good faith considers the withholding of notice to be in the best interests of the holders.

Remedies if an Event of Default Occurs

If an Event of Default has occurred and is continuing, the trustee or the holders of not less than 25% in principal amount of the notes may declare the entire principal amount of all the notes to be due and immediately payable. This is called a declaration of acceleration of maturity. In certain circumstances, a declaration of acceleration of maturity may be canceled by the holders of a majority in principal amount of the notes if (1) we have deposited with the trustee all amounts due and owing with respect to the notes (other than principal that has become due solely by reason of such acceleration) and certain other amounts, and (2) any other Events of Default have been cured or waived.

Except in cases of default, where the trustee has some special duties, the trustee is not required to take any action under the indenture at the request of any holders unless the holders offer the trustee reasonable protection from expenses and liability (called an “indemnity”). If reasonable indemnity is provided, the holders of a majority in principal amount of the notes may direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. The trustee may refuse to follow those directions in certain circumstances. No delay or omission in exercising any right or remedy will be treated as a waiver of that right, remedy or Event of Default.

Before holders are allowed to bypass the trustee and bring their own lawsuit or other formal legal action or take other steps to enforce their rights or protect their interests relating to the notes, the following must occur:

•the holder must give the trustee written notice that an Event of Default has occurred and remains uncured;

•the holders of at least 25% in principal amount of all the notes must make a written request that the trustee take action because of the default and must offer reasonable indemnity and/or security to the trustee against the cost and other liabilities of taking that action;

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•the trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity and/or security; and

•the holders of a majority in principal amount of the notes must not have given the trustee a direction inconsistent with the above notice during that 60-day period.

However, holders are entitled at any time to bring a lawsuit for the payment of money due on their notes on or after the due date.

Book-entry and other indirect holders should consult their banks or brokers for information on how to give notice or direction to or make a request of the trustee and how to declare or cancel an acceleration of maturity.

Each year, we will furnish to the trustee a written statement of certain of our officers certifying that to their knowledge we are in compliance with the indenture and the notes, or else specifying any default.

Waiver of Default

The holders of a majority in principal amount of the notes may waive any past defaults other than:

•the payment of principal or interest; or

•in respect of a covenant that cannot be modified or amended without the consent of each holder.

Merger or Consolidation

Under the terms of the indenture, we are generally permitted to consolidate or merge with another entity. We are also permitted to sell all or substantially all of our assets to another entity. However, we may not take any of these actions unless all the following conditions are met:

•where we merge out of existence or convey or transfer our assets substantially as an entirety, the resulting entity must agree to be legally responsible for our obligations under the notes;

•the merger or sale of assets must not cause a default on the notes and we must not already be in default (unless the merger or sale would cure the default). For purposes of this no-default test, a default would include an Event of Default that has occurred and has not been cured, as described under “Events of Default” above. A default for this purpose would also include any event that would be an Event of Default if the requirements for giving us a notice of default or our default having to exist for a specific period of time were disregarded; and

•we must deliver certain certificates and documents to the trustee.

Modification or Waiver

There are three types of changes we can make to the indenture and the notes issued thereunder.

Changes Requiring A Holder’s Approval

First, there are changes that we cannot make to the notes without a holder’s specific approval. The following is a list of those types of changes:

•change the stated maturity of the principal of or interest on the notes;

•reduce any amounts due on the notes;

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•reduce the amount of principal payable upon acceleration of the maturity of a note following a default;

•change the place or currency of payment on a note;

•impair the holder’s right to sue for payment;

•reduce the percentage of holders of notes whose consent is needed to modify or amend the indenture; and

•reduce the percentage of holders of notes whose consent is needed to waive compliance with certain provisions of the indenture or to waive certain defaults.

Changes Not Requiring Approval

The second type of change does not require any vote by the holders of the notes. This type is limited to clarifications and certain other changes that would not adversely affect holders of the notes in any material respect.

Changes Requiring Majority Approval

Any other change to the indenture and the notes would require the following approval:

•if the change affects only the notes, it must be approved by the holders of a majority in principal amount of the notes; and

•if the change affects more than one series of debt securities issued under the same indenture, it must be approved by the holders of a majority in principal amount of all of the series affected by the change, with all affected series voting together as one class for this purpose.

In each case, the required approval must be given by written consent.

The holders of a majority in principal amount of all of the series of debt securities issued under an indenture, voting together as one class for this purpose, may waive our compliance with some of our covenants in that indenture. However, we cannot obtain a waiver of a payment default or of any of the matters covered by the bullet points included above under “Changes Requiring A Holder’s Approval.”

Further Details Concerning Voting

When taking a vote, we will use the following rules to decide how much principal to attribute to the notes:

The notes will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in trust money for their payment or redemption. The notes will also not be eligible to vote if they have been fully defeased as described later under “Defeasance—Full Defeasance.”

We will generally be entitled to set any day as a record date for the purpose of determining the holders of the notes that are entitled to vote or take other action under the indenture. However, the record date may not be more than 30 days before the date of the first solicitation of holders to vote on or take such action. If we set a record date for a vote or other action to be taken by holders of the notes, that vote or action may be taken only by persons who are holders of the notes on the record date and must be taken within eleven months following the record date.

Book-entry and other indirect holders should consult their banks or brokers for information on how approval may be granted or denied if we seek to change the indenture or the notes or request a waiver.

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Defeasance

The following defeasance provisions are applicable to the notes. “Defeasance” means that, by depositing with a trustee an amount of cash and/or government securities sufficient to pay all principal and interest, if any, on the notes when due and satisfying any additional conditions noted below, we will be deemed to have been discharged from our obligations under the notes. In the event of a “covenant defeasance,” upon depositing such funds and satisfying similar conditions discussed below we would be released from the restrictive covenants under the indenture relating to the notes.

Covenant Defeasance

Under current U.S. federal tax law and the indenture, we can make the deposit described below and be released from some of the restrictive covenants in the indenture under which the notes were issued. This is called “covenant defeasance.” In that event, a holder would lose the protection of those restrictive covenants but would gain the protection of having money and government securities set aside in trust to repay the notes. If we achieve covenant defeasance and the notes were subordinated as described under “Indenture Provisions—Ranking” below, such subordination would not prevent the trustee under the indenture from applying the funds available to it from the deposit described in the first bullet to the payment of amounts due in respect of such debt securities for the benefit of the subordinated debtholders. In order to achieve covenant defeasance, we must do the following:

•Since the notes are denominated in U.S. dollars, we must deposit in trust for the benefit of all holders of the notes a combination of cash and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the notes on their various due dates;

•we must deliver to the trustee a legal opinion of our counsel confirming that, under current U.S. federal income tax law, we may make the above deposit without causing holders to be taxed on the notes any differently than if we did not make the deposit;

•we must deliver to the trustee a legal opinion of our counsel stating that the above deposit does not require registration by us under the Investment Company Act of 1940, as amended (the “1940 Act”), and a legal opinion and officers’ certificate stating that all conditions precedent to covenant defeasance have been complied with;

•defeasance must not result in a breach or violation of, or result in a default under, the indenture or any of our other material agreements or instruments; and

•no default or event of default with respect to the notes shall have occurred and be continuing and no defaults or events of default related to bankruptcy, insolvency or reorganization shall occur during the next 90 days.

If we accomplish covenant defeasance, holders can still look to us for repayment of the notes if there were a shortfall in the trust deposit or the trustee is prevented from making payment. In fact, if one of the remaining Events of Default occurred (such as our bankruptcy) and the notes became immediately due and payable, there might be a shortfall. Depending on the event causing the default, holders may not be able to obtain payment of the shortfall.

Full Defeasance

If there is a change in U.S. federal tax law, as described below, we can legally release ourselves from all payment and other obligations on the notes (called “full defeasance”) if we put in place the following other arrangements for holders to be repaid:

•since the notes are denominated in U.S. dollars, we must deposit in trust for the benefit of all holders of the notes a combination of money and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the notes on their various due dates;

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•we must deliver to the trustee a legal opinion confirming that there has been a change in current U.S. federal tax law or an IRS ruling that allows us to make the above deposit without causing holders to be taxed on the notes any differently than if we did not make the deposit. Under current U.S. federal tax law the deposit and our legal release from the notes would be treated as though we paid holders their share of the cash and notes or bonds at the time the cash and notes or bonds were deposited in trust in exchange for the notes and holders would recognize gain or loss on the notes at the time of the deposit;

•we must deliver to the trustee a legal opinion of our counsel stating that the above deposit does not require registration by us under the 1940 Act and a legal opinion and officers’ certificate stating that all conditions precedent to defeasance have been complied with;

•defeasance must not result in a breach or violation of, or constitute a default under, of the indenture or any of our other material agreements or instruments; and

•no default or event of default with respect to the notes shall have occurred and be continuing and no defaults or events of default related to bankruptcy, insolvency or reorganization shall occur during the next 90 days.

If we ever did accomplish full defeasance, as described above, a holder would have to rely solely on the trust deposit for repayment of the notes. A holder could not look to us for repayment in the unlikely event of any shortfall. Conversely, the trust deposit would most likely be protected from claims of our lenders and other creditors if we ever became bankrupt or insolvent. If the notes were subordinated as described later under “Indenture Provisions—Ranking,” such subordination would not prevent the trustee under the Indenture from applying the funds available to it from the deposit referred to in the first bullet of the preceding paragraph to the payment of amounts due in respect of such notes for the benefit of the subordinated debtholders.

Other Covenants

In addition to any other covenants described in this prospectus, as well as standard covenants relating to payment of principal and interest, maintaining an office where payments may be made or securities can be surrendered for payment, payment of taxes by the company and related matters, the following covenants will apply to the notes:

•We agree that for the period of time during which the notes are outstanding, we will not pay any dividends or make any distributions in excess of 90% of our taxable income, incur any indebtedness (as defined in the indenture) or purchase any shares of our outstanding capital stock, unless, in every such case, at the time of the incurrence of such indebtedness or at the time of any such dividend, distribution or purchase, we have an asset coverage (as defined in the indenture) of at least 150% after giving effect to the incurrence of such indebtedness and the application of the net proceeds therefrom or after deducting the amount of such purchase price, as the case may be.

•We agree that, if, at any time, we are not subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act to file any periodic reports with the SEC, we will furnish to holders of the notes and the trustee, for the period of time during which the notes are outstanding, our audited annual financial statements, within 90 days of our fiscal year end, and unaudited interim financial statements, within 45 days of our fiscal quarter end (other than our fourth fiscal quarter). All such financial statements will be prepared, in all material respects, in accordance with applicable U.S. generally accepted accounting principles.

Form, Exchange and Transfer of Certificated Registered Securities

If registered notes cease to be issued in book-entry form, they will be issued:

•only in fully registered certificated form;

•without interest coupons; and

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•unless we indicate otherwise, in denominations of $25 and amounts that are multiples of $25.

Holders may exchange their certificated securities for notes of smaller denominations or combined into fewer notes of larger denominations, as long as the total principal amount is not changed and as long as the denomination is equal to or greater than $25.

Holders may exchange or transfer their certificated securities at the office of the trustee. We have appointed the trustee to act as our agent for registering notes in the names of holders transferring notes. We may appoint another entity to perform these functions or perform them ourselves.

Holders will not be required to pay a service charge to transfer or exchange their certificated securities, but they may be required to pay any tax or other governmental charge associated with the transfer or exchange. The transfer or exchange will be made only if our transfer agent is satisfied with the holder’s proof of legal ownership.

We may appoint additional transfer agents or cancel the appointment of any particular transfer agent. We may also approve a change in the office through which any transfer agent acts.

If any certificated securities of a particular series are redeemable and we redeem less than all the debt securities of that series, we may block the transfer or exchange of those debt securities during the period beginning 15 days before the day we mail the notice of redemption and ending on the day of that mailing, in order to freeze the list of holders to prepare the mailing. We may also refuse to register transfers or exchanges of any certificated securities selected for redemption, except that we will continue to permit transfers and exchanges of the unredeemed portion of any debt security that will be partially redeemed.

If a registered debt security is issued in book-entry form, only the depositary will be entitled to transfer and exchange the debt security as described in this subsection, since it will be the sole holder of the debt security.

Resignation of Trustee

The trustee may resign or be removed with respect to the notes provided that a successor trustee is appointed to act with respect to the notes. In the event that two or more persons are acting as trustee with respect to different series of indenture securities under the indenture, each of the trustees will be a trustee of a trust separate and apart from the trust administered by any other trustee.

Indenture Provisions  —  Ranking

The notes are our direct unsecured obligations and rank:

•pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us. The notes will also rank pari passu with our general liabilities, which consist of any amounts we may be required to pay pursuant to trade and other payables, including any outstanding dividend payable, base and incentive management fees payable, interest and debt fees payable, vendor payables and accrued expenses such as auditor fees, legal fees, director fees, etc.

•senior to any of our future indebtedness that expressly provides it is subordinated to the notes. We currently do not have outstanding debt that is subordinated to the notes and do not currently intend to issue indebtedness that expressly provides that it is subordinated to the notes. Therefore, the notes will not be senior to any indebtedness or obligations.

•effectively subordinated to all of our existing and future secured indebtedness (including indebtedness that is initially unsecured to which we subsequently grant security), to the extent of the value of the assets securing such indebtedness. Because the notes are not secured by any of our assets, they are effectively subordinated to any secured indebtedness we have incurred and may incur in the future (or any indebtedness that is initially unsecured to which

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we subsequently grant security), to the extent of the value of the assets securing such indebtedness. In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future secured indebtedness may assert rights against the assets pledged to secure that indebtedness in order to receive full payment of their indebtedness before the assets may be used to pay other creditors, including the holders of the notes, and any assets of our subsidiaries will not be directly available to satisfy the claims of our creditors, including holders of the notes..

•structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries and financing vehicles since the notes are obligations exclusively of us and not of any of our subsidiaries. Structural subordination means that creditors of a parent entity are subordinate to creditors of a subsidiary entity with respect to the subsidiary’s assets.

Book-Entry Procedures

The notes are represented by global securities that are deposited and registered in the name of The Depository Trust Company (“DTC”) or its nominee. This means that, except in limited circumstances, holders will not receive certificates for the notes. Beneficial interests in the notes are represented through book-entry accounts of financial institutions acting on behalf of beneficial owners as direct and indirect participants in DTC. Investors may elect to hold interests in the notes through either DTC, if they are a participant, or indirectly through organizations that are participants in DTC.

The notes are issued as fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for each issuance of the notes, in the aggregate principal amount of such issue, and will be deposited with DTC. Interests in the notes will trade in DTC’s Same Day Funds Settlement System, and any permitted secondary market trading activity in such notes will, therefore, be required by DTC to be settled in immediately available funds. None of the Company, the trustee or the paying agent will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”).

DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poor’s Ratings Services’ highest rating: AAA. The DTC Rules applicable to its participants are on file with the SEC. More information about DTC can be found at www.dtcc.com and www.dtc.org.

Purchases of the notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the notes on DTC’s records. The ownership interest of each actual purchaser of each security, or the “Beneficial Owner,” is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their

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purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the notes are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the notes, except in the event that use of the book-entry system for the notes is discontinued.

To facilitate subsequent transfers, all notes deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of the notes with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the notes; DTC’s records reflect only the identity of the Direct Participants to whose accounts the notes are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Redemption notices shall be sent to DTC. If less than all of the notes within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Redemption proceeds, distributions, and interest payments on the notes will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from us or the trustee on the payment date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee, the trustee, or us, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of us or the trustee, but disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as securities depository with respect to the notes at any time by giving reasonable notice to us or to the trustee. Under such circumstances, in the event that a successor securities depository is not obtained, certificates are required to be printed and delivered. We may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that we believe to be reliable, but we take no responsibility for the accuracy thereof. 

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EX-10.10

Exhibit 10.10

FIRST AMENDMENT TO LOAN DOCUMENTS

THIS FIRST AMENDMENT TO LOAN DOCUMENTS (this “Agreement”) is entered into as of June 9, 2021, by and between TERRA MORTGAGE PORTFOLIO II, LLC, a Delaware limited liability company (“Borrower”), TERRA PROPERTY TRUST, INC., a Maryland corporation (“Guarantor”), on the one hand, and WESTERN ALLIANCE BANK, an Arizona corporation (“Lender”), on the other hand.

RECITALS

1.Lender heretofore extended to Borrower a revolving line of credit in the original maximum principal amount of Seventy-Five Million and No/100 Dollars ($75,000,000.00) (the “Revolving Line of Credit”), which Revolving Line of Credit is evidenced by, without limitation, that certain Promissory Note dated as of March 12, 2021, executed by Borrower in favor of Lender (together with any and all amendments thereto or modifications thereof, the “Note”).

2.In connection with the Loan, Borrower also executed and delivered to and in favor of Lender that certain Business Loan Agreement (Revolving Line of Credit) dated March 12, 2021 (together with any and all amendments thereto or modifications thereof, the “LoanAgreement”), pursuant to which, among other things, Borrower granted to Lender a security interest in the Collateral (as defined in the Loan Agreement) to secure Borrower’s obligations to Lender in connection with the Loan.

3.Payment and performance of Borrower’s indebtedness and obligations in connection with the Revolving Line of Credit was and is guaranteed by Guarantor, who executed and delivered to and in favor of Lender a Limited Guaranty dated as of March 12, 2021 (together with any and all amendments thereto or modifications thereof, the “Guaranty”).

4.Lender perfected its interest in and to the Collateral by causing to be filed a UCC-1 financing statement with the Delaware Secretary of State on March 12, 2021, as Filing No. 2021 2003482 (the “UCC Financing Statement”). Lender’s security interest in the Collateral is first in priority and duly perfected under applicable Law.

5.The Loan Agreement, Note, Guaranty, UCC Financing Statement, and all other assignments, agreements, instruments and other documents executed by Borrower or Guarantor in connection with the Revolving Line of Credit shall at times hereinafter be referred to collectively as the “Loan Documents.”

6.Borrower and Guarantor have each requested that Lender amend the Loan Documents to, among other things, correct an omission in the Advance Rate Schedule attached as Exhibit E to the Loan Agreement. Lender is willing to agree to said request subject to the terms and conditions set forth in this Agreement.

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AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:

1.Recitals; Defined Terms.

The recitals are incorporated herein by this reference as are all exhibits. Borrower and Guarantor, and each of them, agree and acknowledge that the factual information recited above is true and correct. Except as may be otherwise expressly defined in this Agreement, all terms used in this Agreement beginning with a capital letter shall have the meanings ascribed to them in the Loan Agreement.

2.Borrower and Guarantor Acknowledgments as to Obligations and Other Matters.

a.Borrower and Guarantor each acknowledge, confirm and agree that as of June 8, 2021, the total outstanding principal balance of the Note is $8,772,102.65, plus accrued and unpaid interest thereon.

b.Borrower and Guarantor, and each of them, specifically acknowledge, confirm and agree that they do not have any valid offset or defense to the obligations, indebtedness and liability under the Loan Documents.

3.Reaffirmation of Obligations.

This Agreement is, in part, a reaffirmation of the obligations, indebtedness and liability of Borrower and Guarantor, and each of them, to Lender as evidenced by the Loan Agreement, Guaranty and the other Loan Documents. Therefore, Borrower and Guarantor, and each of them, represent, warrant, acknowledge and agree that, except as specified herein, all of the terms and conditions of the Loan Documents are and shall remain in full force and effect, without waiver or modification of any kind whatsoever, and are ratified and confirmed in all respects.

4.Amendment to Loan Agreement.

a.The Advance Rate Schedule attached to the Loan Agreement as Exhibit E is hereby deleted in its entirety and replaced by the Advance Rate Schedule in the form attached hereto as Exhibit A.

5.Agreement as a Loan Document.

From and after the effective date of this Agreement, this Agreement and any other documents and instruments executed in connection herewith shall each constitute one of the “Loan Documents.”

6.Effective Date of Agreement.

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This Agreement and the amendments provided for herein shall be effective as of the date set forth above, subject to the timely and complete satisfaction of each and all of the conditions precedent set forth in Section 8 of this Agreement.

7.Borrower’s and Guarantor’s Representations and Warranties.

Borrower and Guarantor, and each of them, hereby represent and warrant to Lender and covenant and agree with Lender as follows:

a.Borrower and Guarantor, and each of them, have full legal right, power and authority to enter into and perform this Agreement. The execution and delivery of this Agreement by Borrower and Guarantor and the consummation by Borrower and Guarantor of the transactions contemplated hereby have been duly authorized by all necessary action by or on behalf of Borrower and Guarantor. This Agreement is a valid and binding obligation of Borrower and Guarantor, and each of them, enforceable against Borrower and Guarantor in accordance with its terms.

b.Neither the execution and delivery of this Agreement by Borrower and Guarantor, or either of them, nor the consummation by Borrower and Guarantor, or either of them, of the transactions contemplated hereby, conflicts with or constitutes a violation or a default under any law applicable to Borrower and Guarantor, or either of them, or any contract, commitment, agreement, arrangement or restriction of any kind to which Borrower and Guarantor, or either of them, is a party, by which Borrower and Guarantor, or either of them, is bound or to which any of Borrower’s and Guarantor’s, or either of their, property or assets is subject.

c.There are no actions, suits or proceedings pending, or to the knowledge of Borrower and Guarantor, or either of them, threatened against or affecting Borrower and Guarantor, or either of them, respectively, in relation to their obligations to Lender or involving the validity and enforceability of this Agreement, the Loan Agreement, the Note, the Guaranty or any of the other Loan Documents, as applicable, or the priority of any liens given by Borrower to Lender in accordance with the Loan Agreement, and the other Loan Documents, at law or in equity, or before or by any governmental agency, or which could have an adverse effect on the financial condition, operations, properties, assets, liabilities or earnings of Borrower and Guarantor, or either of them, or the ability of Borrower and Guarantor, or either of them, to perform their respective obligations to Lender.

d.Borrower and Guarantor, and each of them, hereby reaffirm and confirm that the representations and warranties of Borrower and Guarantor, as applicable, contained in the Loan Documents are true, correct and complete in all respects as of the date of this Agreement.

e.Borrower and Guarantor, and each of them, are in full and complete compliance with the terms, covenants, provisions and conditions of the Loan Agreement, the Note, the Guaranty and the other Loan Documents to which they are a party.

All covenants, representations and warranties of Borrower and Guarantor herein are incorporated by reference and hereby made a part of the Loan Agreement and the Guaranty, as applicable.

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8.Conditions Precedent to Effectiveness of Agreement.

The effectiveness of this Agreement shall be expressly conditioned upon the following having occurred or Lender having received all of the following on or before June 9, 2021, in form and content satisfactory to Lender and its counsel, in its or their sole and absolute discretion, and suitable for filing or recording, as the case may be, as required:

a.This Agreement, fully executed by Borrower and each Guarantor;

b.Such additional information, assignments, agreements, resolutions, certificates, reports, approvals, instruments, documents, subordination agreements, financing statements, consents and opinions as Lender may request, in its sole and absolute opinion and judgment, in connection with this Agreement and/or any of the matters which are the subject of this Agreement; and

c.Payment of the fees and costs of Lender in connection with the preparation, negotiation, administration and execution of this Agreement including, but not limited to, attorneys’ fees, and other costs and fees of other professionals retained by Lender.

9.Miscellaneous.

a.Section headings used in this Agreement are for convenience only and shall not affect the construction of this Agreement.

b.This Agreement may be executed in one or more counterparts but all of the counterparts shall constitute one agreement; provided, however, this Agreement shall not be effective and enforceable unless and until it is executed by all parties hereto.

c.This Agreement and the other documents and instruments executed in connection therewith constitute the product of the negotiation of the parties hereto and the enforcement hereof shall be interpreted in a neutral manner, and not more strongly for or against any party based upon the source of the draftsmanship hereof.

d.This Agreement shall be binding upon and inure to the benefit of Lender, Borrower and Guarantor, and each of them, and their respective successors and assigns, except that neither Borrower nor any Guarantor shall assign their rights hereunder or any interest therein without the prior written consent of Lender.

e.This Agreement is not a novation, nor, except as expressly provided in this Agreement, is it to be construed as a release or modification of any of the terms, conditions, warranties, waivers or rights set forth in the Loan Documents. Nothing contained in this Agreement shall be deemed to constitute a waiver by Lender of any required performance by Borrower or Guarantor, and each of them, of any Event of Default or default heretofore or hereafter occurring under or in connection with the other Loan Documents. In the event there is a conflict in any term, condition or provision of this Agreement, on the one hand, and the Loan Agreement, the Guaranty, or any of the other Loan Documents, on the other hand, the terms, conditions and provisions of this Agreement are to control.

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[Signature Page Follows]

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IN WITNESS WHEREOF, Borrower, Guarantor and Lender have executed and delivered this Agreement as of the date set forth above.

BORROWER:

TERRA MORTGAGE PORTFOLIO II, LLC,

a Delaware limited liability company

By:// Greg Pinkus

Name: Greg Pinkus

Its:    Authorized Signatory

GUARANTORS:

TERRA PROPERTY TRUST, INC.,

a Maryland corporation

By: Greg Pinkus

Name: Greg Pinkus

Its: Authorized Signatory

[SIGNATURE PAGE CONTINUES]

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LENDER:

WESTERN ALLIANCE BANK,

an Arizona corporation

By:/a/Kenneth C. Hedberg     Name: Kenneth C. Hedberg

Title: Vice President

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EXHIBIT A

ADVANCE RATE SCHEDULE

Notwithstanding the foregoing, Advances are subject to the following additional limitations:

1.Advances on any single Collateral Loan shall not exceed $25,000,000.00. On a case by case basis, Lender may approve advances greater than $25,000,000.00 at its sole and absolute discretion, and subject to additional recourse being available to Lender for proceeds in excess of $25,000,000.00.

2.The aggregate amount of all Advances on Collateral Loans secured by Underlying Collateral located in the New York City metropolitan areas shall not exceed 25% of the Credit Limit.

3.In the event any Collateral Loan Obligor, including any affiliate thereof, has two (2) or more Collateral Loans that otherwise qualify as Eligible Receivables, the aggregate Advances to Borrower for such Collateral Loans shall not exceed, in the aggregate, an amount equal to twenty-five percent (25%) of the Credit Limit;

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EX-10.11

Exhibit 10.11

UNCOMMITTED MASTER REPURCHASE AGREEMENT

between

UBS AG, by and through its branch office
at 1285 Avenue of the Americas, New York, New York, as Buyer

and

TERRA MORTGAGE CAPITAL III, LLC, as Seller

Dated as of November 8, 2021

TABLE OF CONTENTS

Page

SECTION 1.    Applicability	1
SECTION 2.    Definitions	1
SECTION 3.    Initiation; Termination	31
SECTION 4.    Margin Amount Maintenance	39
SECTION 5.    COLLECTIONS; Income Payments	40
SECTION 6.    Requirements of Law	42
SECTION 7.    Taxes.	46
SECTION 8.    Security Interest; Buyer’s Appointment as Attorney-In-Fact	50
SECTION 9.    Payment, Transfer; ACCOUNTS	52
SECTION 10.    SINGLE-PURPOSE ENTITY	53
SECTION 11.    Representations AND WARRANTIES	55
SECTION 12.    Covenants	63
SECTION 13.    Events of Default	71
SECTION 14.    Remedies	74
SECTION 15.    Indemnification and Expenses; Recourse	78
SECTION 16.    Servicing	79
SECTION 17.    Due Diligence	80
SECTION 18.    Assignability	81
SECTION 19.    Transfer and Maintenance of Register.	82
SECTION 20.    Hypothecation or Pledge of Purchased Assets	83
SECTION 21.    Tax Treatment	83
SECTION 22.    Set-Off	84
SECTION 23.    SURVIVAL	84
SECTION 24.    Notices and Other Communications	84
SECTION 25.    use of electronic media	85
SECTION 26.    Entire Agreement; Severability; Single Agreement	86
SECTION 27.    Governing Law	86
SECTION 28.    Submission to Jurisdiction; Waivers	87
SECTION 29.    No Waivers, Etc.	88
SECTION 30.    Netting	88
SECTION 31.    Confidentiality	88
SECTION 32.    Intent	89
SECTION 33.    Disclosure Relating to Certain Federal Protections	90
SECTION 34.    CONFLICTS	90
SECTION 35.    Miscellaneous	90
SECTION 36.    General Interpretive Principles	91

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SCHEDULES AND EXHIBITS

SCHEDULE 1    Representations and Warranties

SCHEDULE 2    Responsible Officers

SCHEDULE 3    Scheduled Indebtedness

EXHIBIT A    Form of Future Funding Transaction Request and

Confirmation              

EXHIBIT B    Form of Compliance Certificate

EXHIBIT C    Form of Power of Attorney

EXHIBIT D    Form of Distribution Worksheet

EXHIBIT E    Form of Loan Servicer Report

EXHIBIT F    Form of Transaction Request and Confirmation

EXHIBIT G    Form of Notice to Mortgagor

EXHIBIT H    Form of Request for Repurchase and Confirmation

EXHIBIT I    Form of Custodial Delivery Letter

EXHIBIT J    Form of Loan Servicer Notice

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UNCOMMITTED MASTER REPURCHASE AGREEMENT

This is an UNCOMMITTED MASTER REPURCHASE AGREEMENT, dated as of November 8, 2021, by and between TERRA MORTGAGE CAPITAL III, LLC, a Delaware limited liability company, and UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York.

SECTION 1.APPLICABILITY

From time to time at the request of Seller the parties hereto may, prior to the Termination Date, enter into transactions in which (a) Seller agrees to transfer Purchased Assets to Buyer on the applicable Purchase Date against the transfer of funds by Buyer, and (b) Buyer simultaneously agrees to transfer to Seller each of such Purchased Assets on the applicable Repurchase Date against the transfer of funds by Seller. Each such transaction shall be referred to herein as a “Transaction” and shall be governed by this Agreement (including any supplemental terms or conditions contained in any annexes identified herein, as applicable hereunder), unless otherwise agreed in writing by Seller and Buyer. This Agreement sets forth the procedures to be used in connection with periodic requests for Buyer to enter into Transactions with Seller. Seller hereby acknowledges that Buyer is under no obligation to agree to enter into, or to enter into, any Transaction pursuant to this Agreement. The decision whether to enter into Transactions shall be in Buyer’s sole discretion and shall be subject to satisfaction of all terms and conditions of this Agreement.

The Pricing Letter is one of the Program Documents as defined below. The Pricing Letter is incorporated by reference into this Agreement and Seller and Buyer agree to adhere to all terms, conditions and requirements of the Pricing Letter as incorporated herein. In the event of a conflict or inconsistency between this Agreement and the Pricing Letter, the terms of the Pricing Letter shall govern.

SECTION 2.DEFINITIONS

As used herein, the defined terms set forth below shall have the meanings set forth herein. Any capitalized term used but not defined herein shall have the meaning assigned to such term in the Pricing Letter. Additionally, as used herein, the following terms shall have the meanings defined in the Uniform Commercial Code: accounts, deposit accounts, securities accounts, chattel paper (including electronic chattel paper), goods (including inventory and equipment and any accessions thereto), instruments (including promissory notes), documents, investment property, general intangibles (including payment intangibles and software), and supporting obligations and proceeds.

“1934 Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

“A-Note” shall mean the original promissory note, if any, that was executed and delivered in connection with the senior or pari passu senior position of a Commercial Mortgage Loan.

“Accelerated Repurchase Date” shall have the meaning set forth in Section 14(a)(i) of this Agreement.

“Acceptable Attorney” shall mean an attorney acceptable to Buyer that has delivered at Seller’s request a Bailee Letter.

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“Accepted Servicing Practices” shall mean, with respect to any Purchased Asset, servicing practices and procedures (including collection procedures) which are in accordance with (a) the applicable Servicing Agreement, (b) applicable Requirements of Law, (c) the terms and provisions of the related Mortgage Asset File, (d) the servicing practices of reputable institutional commercial mortgage lenders, loan servicers and asset managers that service assets of the same type as the Purchased Assets in the jurisdiction where the related Mortgaged Property is located, and (e) the servicing practices that the applicable Loan Servicer customarily employs and exercises in servicing and administering commercial loans for its own account and for other third party portfolios of loans similar to the Purchased Assets, but without regard to any relationship that Loan Servicer or any Affiliate of such Loan Servicer may have with the related Mortgagor or any Affiliate of such Mortgagor or to such Loan Servicer’s right to receive compensation for its services under the applicable Servicing Agreement (to the extent not conflicting with clauses (a) through (d) in this definition).

“Affiliate” shall mean with respect to any Person, any other Person that directly or indirectly through one or more intermediaries, Controls or is Controlled by, or is under common Control with, such Person.

“Agreement” shall mean this Uncommitted Master Repurchase Agreement, by and between Buyer and Seller, dated as of the date hereof, as the same may be amended, supplemented or otherwise modified in accordance with the terms of this Agreement.

“Alternative Rate” shall mean the Benchmark Replacement as determined pursuant to Section 6(d)(i) of this Agreement.

“Alternative Rate Transaction” shall mean, with respect to any Pricing Rate Period, any Transaction with respect to which the Pricing Rate for such Pricing Rate Period is determined with reference to the Alternative Rate.

“Annual Financial Statement Date” shall mean December 31, 2020.

“Anti-Corruption Laws” shall mean the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder, the UK Bribery Act of 2010, as amended, and any other applicable anti-corruption law.

“Anti-Money Laundering Laws” shall have the meaning set forth in Section 11(x) of this Agreement.

“Appraised Value” shall mean, with respect to any Purchased Asset, the “as is” value set forth in a Qualified Appraisal of the related Mortgaged Property.

“Approved CPA” shall mean any independent certified public accountant of nationally recognized standing approved by Buyer in its reasonable discretion.

“Approved Exceptions Report” shall mean a list prepared by Seller of all exceptions to the representations and warranties relating to the related Purchased Asset and any other eligibility criteria for such Purchased Asset and approved by Buyer in writing.

“Approved Product” shall have the meaning set forth in the Pricing Letter. Notwithstanding any reference to a Product herein, such Product shall not be an Approved Product unless expressly identified as such in the Pricing Letter or Transaction Request and Confirmation.

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“Asset Schedule and Exception Report” shall have the meaning set forth in the Custodial Agreement.

“Assignment and Acceptance” shall have the meaning set forth in Section 18 of this Agreement.

“Assignment of Leases” shall mean, with respect to any Mortgage or other security agreement, an assignment of leases thereunder, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the Mortgaged Property is located to reflect the assignment of leases.

“Assignment of Mortgage” shall mean an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the sale of the Mortgage or other security agreement.

“Available Tenor”shall mean, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of a Pricing Rate Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Pricing Rate Period” pursuant to Section 6(d)(iv).

“B-Note” shall mean the original promissory note, if any, that was executed and delivered in connection with the junior position of a Commercial Mortgage Loan.

“Bailee” shall mean an Acceptable Attorney or a title company or another Person, in each case acceptable to Buyer in its sole discretion that has signed a Bailee Letter.

“Bailee Letter” shall mean a letter substantially in the form of Annex 11 to the Custodial Agreement from a Bailee, with customary indemnifications from the related Bailee in favor of Buyer, together with any other changes acceptable to Buyer in its sole discretion, wherein such Bailee is in possession of a Mortgage Asset File (i) acknowledges receipt of such Mortgage Asset File, (ii) confirms that such Bailee is holding the same as bailee or agent on behalf of Buyer under such letter and (iii) agrees that such Bailee shall deliver such Mortgage Asset File to Custodian, or as otherwise directed by Buyer, by not later than the third (3rd) Business Day following the Purchase Date for the related Purchased Asset.

“Bankruptcy Code” shall mean Title II of the United States Code, as amended from time to time.

“Benchmark” shall mean, initially, USD LIBOR; provided that if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred with respect to USD LIBOR 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 Section 6(d)(i).

“Benchmark Replacement” shall mean, for any Available Tenor, the first alternative set forth in the order below that can be determined by Buyer for the applicable Benchmark Replacement Date:

(1) the sum of: (a) Term SOFR and (b) if applicable, the related Benchmark Replacement Adjustment;

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(2) the sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment;

(3) the sum of: (a) the alternate benchmark rate that has been selected by Buyer as the replacement for the then-current Benchmark for the applicable Corresponding Tenor 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 U.S. dollar-denominated syndicated or bilateral credit facilities at such time and (b) the related Benchmark Replacement Adjustment;

provided that, in the case of clause (1), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by Buyer in its reasonable discretion. If the Benchmark Replacement as determined pursuant to clause (1), (2) or (3) 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 Program Documents (excluding, for purposes of this proviso, any Hedge Agreement).

“Benchmark Replacement Adjustment” shall mean, if applicable with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Pricing Rate Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:

(1) for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement,” the first alternative set forth in the order below that can be determined by Buyer:

(a) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Pricing Rate Period that has been selected or recommended by the Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor;

(b) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Pricing Rate Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and

(2) for purposes of clause (3) of the definition of “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 Buyer for the applicable Corresponding Tenor 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 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 U.S. dollar-denominated syndicated or bilateral credit facilities;

provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from time to time as selected by Buyer in its reasonable discretion.

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“Benchmark Replacement Conforming Changes” shall mean, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Business Day,” the definition of “Pricing Rate 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 Buyer decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by Buyer in a manner substantially consistent with market practice (or, if Buyer decides that adoption of any portion of such market practice is not administratively feasible or if Buyer determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as Buyer decides is reasonably necessary in connection with the administration of this Agreement and the other Program Documents (excluding any Hedge Agreement).

“Benchmark Replacement Date” shall mean the earliest to occur of the following events with respect to the then-current Benchmark:

(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 all Available Tenors of such Benchmark (or such component thereof);

(2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein; or

(3) in the case of an Early Opt-in Election, the first (1st) Business Day after the date notice of such Early Opt-in Election is provided to Seller.

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 all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to the then-current Benchmark:

(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 all Available Tenors of 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 any Available Tenor of such Benchmark (or such component thereof);

(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 Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, 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

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authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of 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 any Available Tenor of such Benchmark (or such component thereof); or

(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 all Available Tenors of such Benchmark (or such component thereof) are no longer 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 each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Unavailability Period” shall mean 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 the then-current Benchmark for all purposes hereunder and under any Program Document (except for any Hedge Agreement) in accordance with Section 6(d)(i) of this Agreement, and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Program Document (except for any Hedge Agreement) in accordance with this Section titled “Benchmark Replacement Setting.”

“Beneficial Ownership Certification” shall mean a certification regarding beneficial ownership meeting the requirements of the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” shall mean 31 C.F.R. § 1010.230.

“BHC Act Affiliate” shall have the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).

“Breakage Costs” shall have the meaning set forth in Section 6(e) of this Agreement.

“Business Day” shall mean a day other than (i) a Saturday or Sunday, (ii) any day on which banking institutions are authorized or required by law, executive order or governmental decree to be closed in the State of New York or in the state where the corporate trust office of Custodian is located, or (iii) any day on which the New York Stock Exchange is closed.

“Buyer” shall mean UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York, its permitted successors in interest and assigns pursuant to Section 18 of this Agreement and, with respect to Section 7 of this Agreement, its participants.

“Capital Lease Obligations” shall mean, with respect to any Person, the lease obligations of such Person that are required to be capitalized in accordance with GAAP.

“Capital Stock” shall mean 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, without limitation, any and all member or other equivalent interests (certificated or uncertificated) in any limited liability

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company, and any and all partnership or other equivalent interests in any partnership or limited partnership, and any and all warrants or options to purchase any of the foregoing.

“Cause” shall mean, with respect to an Independent Director or Independent Manager, (i) acts or omissions by such Independent Director or Independent Manager that constitute willful disregard of, or bad faith or gross negligence with respect to, such Independent Director or Independent Manager’s duties under the applicable by-laws, limited partnership agreement or limited liability company agreement, (ii) that such Independent Director or Independent Manager has engaged in or has been charged with, or has been convicted of, fraud or other acts constituting a crime under any law applicable to such Independent Director or Independent Manager, (iii) that such Independent Director or Independent Manager is unable to perform his or her duties as Independent Director or Independent Manager due to death, disability or incapacity, or (iv) that such Independent Director or Independent Manager no longer meets the definition of Independent Director or Independent Manager.

“Change in Control” shall mean any of the following events:

(a)any “person(s)” or “group” (within the meaning of Section 13(d) or 14(d) of the 1934 Act) shall become, or obtain rights to become (whether by means of warrants, options or otherwise), the beneficial owner, directly or indirectly, of any of the Capital Stock of the general partner of Guarantor entitled to vote generally in the election of directors, members or partners of 20% or more, provided that Affiliates of Seller who were Affiliates as of the Closing Date (excluding entities who were Affiliates of the Seller solely as a result of being limited partners of Guarantor) shall not be counted for this purpose; or

(b)any transaction or event as a result of which Guarantor ceases to own, beneficially or of record, 100% of the Capital Stock of Pledgor; or

(c)any transaction or event as a result of which Pledgor ceases to own, beneficially or of record, 100% of the Capital Stock of Seller;

(d)the sale, merger or reorganization of Manager; or

(e)Manager or an Affiliate of Manager that was an Affiliate as of the Closing Date ceases to be a manager of Guarantor.

“Closing Date” shall mean November 8, 2021.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

“Commercial Mortgage Loan” shall mean a floating rate senior or pari passu senior or junior Mortgage Loan that is secured by a mortgage lien on one or more properties that is an Approved Product.

“Complete Submission” shall mean with respect to any Transaction, the Summary Diligence Materials with respect thereto.

“Compliance Certificate” shall mean a completed and executed compliance certification in the form of Exhibit B to this Agreement.

“Compliance Policy” shall mean any policy of Buyer or of any parent Controlling Buyer related to the compliance by Buyer or such Controlling entity with any Requirements of

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Law, any request or directive by any Governmental Authority (whether or not having the force of law), and/or any proposed law, rule or regulation (whether in proposed form or otherwise not yet in effect).

“Confidential Information” shall have the meaning set forth in Section 12(s) of this Agreement.

“Confidential Terms” shall have the meaning set forth in Section 31 of this Agreement.

“Connection Income Taxes” 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.

“Control” shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise and “Controlling” and “Controlled” shall have meanings correlative thereto.

“Control Account” shall have the meaning set forth in Section 5(a) of this Agreement.

“Control Account Bank” shall mean KeyBank, National Association.

“Control Agreement” shall mean a letter agreement relating to the Control Account, in form and substance acceptable to Buyer, between and among Seller, Buyer and Control Account Bank, as the same may be amended from time to time.

“Corresponding Tenor” with respect to any Available Tenor shall mean, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

“Credit Event” shall have the meaning set forth in the Pricing Letter.

“Custodial Agreement” shall mean that certain Custodial Agreement dated as of the date hereof, among Seller, Buyer and Custodian as the same may be amended from time to time.

“Custodial Delivery Letter” shall have the meaning set forth in the Custodial Agreement.

“Custodian” shall mean Wells Fargo Bank, National Association, or any successor thereto under the Custodial Agreement.

“Daily Simple SOFR” shall mean, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by Buyer in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for business loans; provided, that if Buyer decides that any such convention is not administratively feasible for Buyer, then Buyer may establish another convention in its reasonable discretion.

“Default” shall mean an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.

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“Default Right” shall have the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“Defaulting Party” shall have the meaning set forth in Section 30 of this Agreement.

“Delaware LLC Act” shall mean Chapter 18 of the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., as amended.

“Delinquent Asset” “Delinquent Asset” shall mean any Purchased Asset or, in the case of any Purchased Asset that is a Participation Interest, the related Commercial Mortgage Loan, where (a) any Scheduled Payment or any payment of fees, expenses or other amounts (other than principal) or any part thereof, remains unpaid for thirty (30) days following the original Due Date for such Scheduled Payment or, if longer, beyond any applicable notice and cure period, (b) any due and payable repayment of principal is not paid within one (1) Business Day of the Due Date therefor, (c) any of the representations and warranties set forth in Schedule 1 to this Agreement with respect to such Purchased Asset are untrue or incorrect in any respect, (d) there is any Material Non-monetary Default that is outstanding beyond any of the applicable notice and/or cure periods that are expressly set forth in the Purchased Asset Documents, (e) in the case of any Non-Controlling Interest, there has been any extension, amendment, waiver, termination, rescission, cancellation, release or other modification to the terms of, or any collateral, guaranty or indemnity for, or the exercise of any material right or remedy of a holder (including all lending, corporate and voting rights, remedies, consents, approvals and waivers) of, any related loan or participation interest (in each case including, without limitation, any such document with respect to any Commercial Mortgage Loan related to any Participation Interest) that in each case has a material adverse effect on the value or cash-flow of such asset, as determined by Buyer in good faith, or (f) Seller or a Loan Servicer has received written notice of the foreclosure of any Lien on the related Mortgaged Property or a discounted payoff in respect of such Purchased Asset or the related Commercial Mortgage Loan with respect thereto; provided that with respect to any Participation Interest, such Participation Interest shall also be considered a Delinquent Asset to the extent that the related Commercial Mortgage Loan would be considered a Delinquent Asset pursuant to this definition if the such Commercial Mortgage Loan were a Purchased Asset hereunder.

              For purposes of this definition, “Material Non-monetary Default” shall mean any “Event of Default” as defined in the applicable related Purchased Asset Documents that has a material adverse effect on (I) the operation or value of the related Property, (II) the ownership or title of, or any Lien on or security interest in respect of any part of, the related Property, or (III) the ability of any related Mortgagor to satisfy any of their payment obligations under any of the related Purchased Asset Documents, in each case determined for purposes of this proviso on an individual basis and without regard for any other relationships between any Mortgagor and any of their respective Affiliates, on the one hand, and Seller, Guarantor or any of their respective Affiliates on the other hand.

“Distribution Worksheet” shall mean a worksheet setting forth the amounts and recipients of remittances to be made on the next succeeding Payment Date, substantially in the form of Exhibit D to this Agreement.

“Dividing LLC” shall mean a Delaware limited liability company that is effecting a Division pursuant to and in accordance with Section 18-217 of the Delaware LLC Act.

“Division” shall mean the division of a Dividing LLC into two or more domestic limited liability companies pursuant to and in accordance with Section 18-217 of the Delaware LLC Act.

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“Division LLC” shall mean a surviving company, if any, and each resulting company, in each case that is the result of a Division.

“Dollars” and “$” shall mean lawful money of the United States of America.

“Due Date” shall mean the day of the month on which the Scheduled Payment is due on a Purchased Asset, exclusive of any days of grace.

“Early Opt-in Election” shall mean, if the then-current Benchmark is USD LIBOR, the occurrence of the election by Buyer, as determined in Buyer’s sole discretion, to trigger a fallback from USD LIBOR and the provision by Buyer of written notice of such election to Seller.

“E-Sign” shall mean the federal Electronic Signatures in Global and National Commerce Act, as amended from time to time.

“Effective Date” shall mean the date upon which the conditions precedent set forth in Section 3(a) of this Agreement shall have been satisfied.

“Electronic Record” shall mean “Record” and “Electronic Record,” both as defined in E-Sign, and shall include but not be limited to, recorded telephone conversations, fax copies or electronic transmissions.

“Electronic Signature” shall have the meaning set forth in E-Sign.

“Electronic Transactions” shall mean transactions conducted using Electronic Records and/or Electronic Signatures or fax copies of signatures.

“Eligibility Criteria” shall have the meaning set forth in the Pricing Letter.

“Eligible Asset” shall mean any of (a) a Commercial Mortgage Loan, (b) a senior Participation Interest in a Commercial Mortgage Loan that is evidenced by a Participation Certificate, (c) an A-Note representing the most senior interest in an A/B structure or an A-1 Note representing a pari passu interest in the most senior interests in a senior pari passu structure that, in each case, evidences an interest in a Commercial Mortgage Loan, (d) a junior or junior pari passu Participation Interest in a Commercial Mortgage Loan that is evidenced by a Participation Certificate (provided that the respective senior or senior pari passu Participation Interest with respect thereto is also a Purchased Asset), or (e) a B-Note evidencing an interest in a Commercial Mortgage Loan (provided that the related A-Note evidencing an interest in such Commercial Mortgage Loan is also a Purchased Asset); that, in each case (i) satisfies each of the applicable Eligibility Criteria as of the Purchase Date, except for clauses (c), (d), (f), (j), (k) and (l) of the definition of Eligibility Criteria, each of which criteria must be satisfied for a Purchased Asset at all times in order for such Purchased Asset to be an Eligible Asset, (ii) conforms with the applicable representations and warranties set forth on Schedule 1 hereto in all respects, and (iii) is not a Delinquent Asset; provided that construction loans, land loans and mezzanine loans shall not be an Eligible Asset and providedfurther that any Commercial Mortgage Loan or Participation Interest with respect to which the related Commercial Mortgage Loan has any related preferred equity interest, directly or indirectly, in the related Mortgagor, shall not be an Eligible Asset.

Notwithstanding the foregoing clause (i), if it is subsequently determined by Buyer that any of the Eligibility Criteria were satisfied or deemed satisfied with respect to any Purchased Asset as of the applicable Purchase Date therefor as a result of information which is untrue, incorrect or incomplete in any material respect relating to such Purchased Asset being

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provided to Buyer by or on behalf of Seller on or prior to the related Purchase Date, then such Purchased Asset shall not be an Eligible Asset.

“Environmental Condition” shall mean recognized environmental conditions (as such term is defined in ASTM E1527-05 or its successor).

“Environmental Law” shall mean any federal, state, foreign or local statute, law, rule, regulation, ordinance, code, guideline, written policy and rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment, employee health and safety, or hazardous substances, materials or other pollutants, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 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.; and any state and local or foreign analogues, counterparts or equivalents, in each case as amended from time to time.

“Equity Interests” shall mean, with respect to any Person, (a) any share, interest, participation and other equivalent (however denominated) of Capital Stock of (or other ownership, equity or profit interests in) such Person, (b) any warrant, option or other right for the purchase or other acquisition from such Person of any of the foregoing, (c) any security convertible into or exchangeable for any of the foregoing, and (d) any other ownership or profit interest in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such share, warrant, option, right or other interest is authorized but unissued on any date.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor thereto.

“ERISA Affiliate” shall mean any corporation or trade or business (whether or not incorporated) in the same controlled group as or under common control with a Seller Party within the meaning of Section 414(b) or (c) of the Code (or Sections 414(m) or (o) of the Code for purposes of provisions relating to Section 412 of the Code) or Section 302 of ERISA.

“Event of Default” shall have the meaning set forth in Section 13 of this Agreement.

“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to Buyer or required to be withheld or deducted from a payment to Buyer: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of Buyer being organized under the laws of, or having its principal office or the office from which it books the Transactions located in, the jurisdiction imposing such Taxes (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of Buyer with respect to an interest in the Obligations pursuant to a law in effect on the date on which Buyer (i) acquires such interest in the Obligations or (ii) changes the office from which it books the Transactions, except in each case to the extent that, pursuant to Section 7 of this Agreement, amounts with respect to such Taxes were payable either to Buyer’s assignor immediately before Buyer became a party hereto or to Buyer immediately before it changed the

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office from which it books the Transactions, (c) Taxes attributable to Buyer’s failure to comply with Section 7(e) of this Agreement and (d) any U.S. federal withholding Taxes imposed under FATCA.

“Extended Margin Deadline” shall have the meaning set forth in the Pricing Letter.

“Facility Exit Fee” shall have the meaning set forth in the Pricing Letter.

“FATCA” 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 and any agreements entered into pursuant to Section 1471(b)(1) of the Code, any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty, or convention among Governmental Authorities entered into in connection with the implementation of the foregoing.

“FDIA” shall have the meaning set forth in Section 32(c) of this Agreement.

“FDICIA” shall have the meaning set forth in Section 32(d) of this Agreement.

“Fidelity Insurance” shall mean insurance coverage with respect to employee errors, omissions, dishonesty, forgery, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount acceptable to Buyer.

“Financial Statements” shall have the meaning set forth in Section 12(d) of this Agreement.

“Floor” shall mean the benchmark rate floor of ten (10) basis points (0.10%).

“Foreign Buyer”: shall mean a Buyer that is not a U.S. Person.

“Future Funding Amount” shall mean, with respect to any Purchased Asset for which a Future Funding Transaction has been requested by Seller and approved by Buyer pursuant to Section 3(d) of this Agreement, the amount funded by Buyer in connection with such Future Funding Transaction; provided that in no event shall a Future Funding Amount exceed the product of (a) the amount that Seller is funding as a post-closing advance on the related Future Funding Date as required by the related Purchased Asset Documents relating to such Purchased Asset, and (b) the Purchase Price Percentage for such Purchased Asset; providedfurther that, in no event shall the aggregate amount so requested by Seller exceed the amount of future funding set forth on the related Transaction Request and Confirmation for the initial Transaction relating to such Purchased Asset, minus all previous Future Funding Amounts funded by Buyer relating to such Purchased Asset.

“Future Funding Date”: shall mean, with respect to any Purchased Asset for which a Future Funding Transaction has been requested by Seller and approved by Buyer, the date on which Seller is required to fund a Future Funding Amount pursuant to the Purchased Asset Documents relating to such Purchased Asset.

“Future Funding Request Package” shall mean, with respect to one or more Future Funding Transactions, the following, to the extent applicable and available and required pursuant to the Purchased Asset Documents, unless any such items were previously delivered to Buyer and have not been modified since the date of each such delivery: (a) the related request for

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advance, executed by the related Mortgagor (which shall include evidence of Seller’s approval of the related Future Funding Transaction), and any other documents that require Seller to fund; (b) the related affidavit executed by the related Mortgagor which covers such issues as Buyer shall request, and any other related documents; (c) the executed fund control agreement (or the executed escrow agreement, if funding through escrow); (d) copies of all relevant trade contracts; (e) the title policy endorsement for the advance; (f) certified copies of any tenant leases relevant to such request; (g) certified copies of any service contracts relevant to such request; (h) updated financial statements, operating statements and rent rolls, as applicable; (i) evidence of required insurance; (j) engineering reports and updates to the engineering reports; (k) updated copies of the underwriting materials for the related Purchased Asset that were delivered to Buyer prior to the related Purchase Date; and (l) copies of any additional documentation as required in connection therewith, or as otherwise reasonably requested by Buyer.

“Future Funding Transaction” shall mean any Transaction approved by Buyer pursuant to Section 3(d) of this Agreement.

“Future Funding Transaction Request and Confirmation” shall have the meaning set forth in Section 3(d)(i) of this Agreement.

“GAAP” 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, without limitation, the official interpretations thereof by the Financial Accounting Standards Board, its predecessors and successors.

“GLB Act” shall have the meaning set forth in Section 12(s) of this Agreement.

“Governing Documents” shall mean, with respect to any Person, its articles or certificate of incorporation or formation, by-laws, partnership agreement, limited liability company agreement, memorandum and articles of association, operating or trust agreement and/or other organizational, charter or governing documents, in each case, as applicable to such Person based on its form of organization.

“Governmental Authority” shall mean any nation or government, any state, county, municipality or other political subdivision thereof or any governmental body, agency, authority, department or commission (including, without limitation, any taxing authority) or any instrumentality or officer of any of the foregoing (including, without limitation, any court or tribunal) exercising executive, legislative, judicial, regulatory or administrative functions over any Seller Party, Loan Servicer or Buyer, as applicable.

“Ground Lease” shall have the meaning set forth in Schedule 1 to this Agreement.

“Ground Lessee” shall mean the lessee under a Ground Lease.

“Guarantee” shall mean, as to any Person, without duplication, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the 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); provided that the term “Guarantee” shall not include (a) endorsements for collection or deposit in the ordinary course of business or (b) obligations to make servicing advances for delinquent taxes or other obligations in respect of a Mortgaged Property, to the extent in accordance with Accepted Servicing Practices. 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 less, the maximum stated

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liability set forth in the instrument embodying such Guarantee) 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.

“Guarantor” shall mean Terra Property Trust, Inc., a Maryland corporation, together with its successors and assigns.

“Hedge Agreement” shall mean any short sale of a US Treasury Security, or futures contract, or mortgage related security, or Eurodollar futures contract, or options related contract, or interest rate swap, cap or collar agreement.

“Healthcare” shall mean a property owned by a Mortgagor or for which the Mortgagor is a Ground Lessee, the primary usage of which is as a healthcare property.

“Hospitality” shall mean a real estate development owned by the Mortgagor or for which the Mortgagor is a Ground Lessee, the primary usage of which is as a hotel or motel which is part of a national or regional chain or franchise, including all land, amenities and improvements, with individual rooms principally for short-term rental to tenants occupying same.

“Income” shall mean, with respect to any Purchased Asset at any time, (a) any collections or receipts of principal, interest, dividends, receipts or other distributions or collections or any other amounts related to such Purchased Asset received by or on behalf of Seller other than (i) escrow or reserve amounts held pursuant to the terms of the related Purchased Asset Documents unless and until released to Seller in accordance with the terms thereof, and (ii) base servicing fees permitted to be retained by Loan Servicer pursuant to each of the Servicing Agreement and the Servicer Notice, (b) all net sale proceeds received by Seller or any Affiliate of Seller in connection with a sale or liquidation of such Purchased Asset and (c) all payments actually received by Seller and/or Buyer with respect to such Purchased Asset pursuant to any Hedge Agreements.

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances.

“Indemnified Party” shall have the meaning set forth in Section 15(a) of this Agreement.

“Indemnified Taxes” shall mean (a) Taxes other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of Seller hereunder or under any Program Document and (b) to the extent not otherwise described in (a), Other Taxes.

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“Independent Director” or “Independent Manager” 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 CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, Stewart Management Company, or Lord Securities Corporation or, if none of those companies is then providing professional Independent Directors or Independent Managers, another nationally recognized company approved by Buyer, in each case that is not an Affiliate of Seller or Pledgor and that provides professional independent directors, independent managers and/or other corporate services in the ordinary course of its business, and which individual is duly appointed as Independent Director or Independent Manager and is not, has never been, and will not while serving as Independent Director or Independent Manager be, any of the following:

(a)a member, partner, equity holder, manager, director, officer or employee of Seller, Pledgor, or any of their respective equity holders or Affiliates (other than as an Independent Director or Independent Manager of Seller or Pledgor or an Affiliate of Seller or Pledgor that does not own a direct or indirect ownership interest in Seller or Pledgor and that is required by a creditor to be a Single Purpose Entity, provided, however, that such Independent Director or Independent Manager is employed by a company that routinely provides professional Independent Directors or Independent Managers);

(b)a creditor, supplier or service provider (including provider of professional services) to Seller, Pledgor or any of their respective equity holders or Affiliates (other than through a nationally-recognized company that routinely provides professional Independent Directors, Independent Managers and/or other corporate services to Seller, Pledgor, or any of their respective equity holders or Affiliates in the ordinary course of business);

(c)a family member of any such member, partner, equity holder, manager, director, officer, employee, creditor, supplier or service provider; or

(d)a Person who controls (whether directly, indirectly or otherwise) any of the individuals described in the preceding clauses (a), (b) or (c).

An individual who otherwise satisfies the preceding definition and satisfies subparagraph (a) by reason of being the Independent Director or Independent Manager of a Single Purpose Entity affiliated with Seller or Pledgor that does not own a direct or indirect ownership interest in Seller or Pledgor shall be qualified to serve as an Independent Director or Independent Manager of Seller or Pledgor if the fees that such individual earns from serving as Independent Director or Independent Manager of Affiliates of Seller or Pledgor in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year.

“Industrial” shall mean a property owned by a Mortgagor or for which the Mortgagor is a Ground Lessee, the primary usage of which is as an industrial property.

“Initial Margin Deadline” shall have the meaning set forth in the Pricing Letter.

“Initial Margin Payment Amount” shall have the meaning set forth in the Pricing Letter.

“Insolvency Event” shall mean, for any Seller Party:

(a)that such Seller Party shall fail generally to, or admit in writing its inability to, pay its debts as they become due; or

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(b)a proceeding shall have been instituted in a court having jurisdiction seeking a decree or order for relief in respect of such Seller Party in an involuntary case under any applicable bankruptcy, insolvency, liquidation, reorganization or other similar Requirements of Law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Seller Party, or for any substantial part of its property, or for the winding-up or liquidation of its affairs and such decree or order shall remain unstayed and in effect for a period of sixty (60) days; or

(c)the commencement by such Seller Party of a voluntary case under any applicable bankruptcy, insolvency or other similar Requirements of Law now or hereafter in effect, or such Seller Party’s consent to the entry of an order for relief in an involuntary case under any such Requirements of Law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Seller Party, or for any substantial part of its property, or any general assignment for the benefit of creditors; or

(d)that such Seller Party shall become insolvent; or

(e)such Seller Party, or any of their Subsidiaries, shall take any action in furtherance of, or the action of which would result in any of the actions set forth in the preceding clauses (a), (b), (c) or (d).

“Insolvency Law” shall mean the Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments and similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

“Insolvency Proceeding” shall mean any case, action or proceeding before any court or other Governmental Authority relating to any Insolvency Event.

“Insurance Rating Requirements” shall mean, with respect to an insurer meeting the requirements of the related Mortgage, a claims-paying or financial strength rating of at least “A-:VIII” from A.M. Best Company or “A3” (or the equivalent) from Moody’s or “A-” from S&P.

“Investment Company Act” shall mean the Investment Company Act of 1940, as amended, restated or modified from time to time, including all rules and regulations promulgated thereunder.

“Investor” has the meaning set forth in the Program Guarantee.

“IRS” shall mean the United States Internal Revenue Service.

“ISDA Definitions” 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.

“Lien” shall mean any mortgage, statutory or other lien, pledge, charge, right, claim, adverse claim, attachment, levy, hypothecation, assignment, deposit arrangement, security interest, UCC financing statement or encumbrance of any kind on or otherwise relating to any

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Person’s assets or properties in favor of any other Person or any preference, priority or other security agreement or preferential arrangement of any kind.

“Litigation Threshold” shall have the meaning set forth in the Pricing Letter.

“Loan Servicer” shall mean Trimont Real Estate Advisors, LLC, or any nationally recognized independent loan servicer acceptable to Buyer in its sole discretion.

“Loan Servicer Account” or “Servicer Account” shall mean a demand deposit account established with the applicable Loan Servicer or with a bank for which the applicable Loan Servicer is the bank’s customer and that is acceptable to Buyer in its sole discretion, established solely in connection with the Commercial Mortgage Loans or Participation Interests that are Purchased Assets subject to Transactions under this Agreement and which deposit account is in the name of the applicable Seller, and which may be for the benefit of Buyer, and which shall, in any case, indicate in the name of such deposit account the security interest of Buyer therein.

“Management Agreement” shall mean the Amended and Restated Management Agreement, dated as of February 18, 2018, by and between Manager and Guarantor.

“Manager” shall mean Terra REIT Advisors, LLC.

“Margin Call” shall have the meaning set forth in Section 4(a) of this Agreement.

“Margin Deadline” shall have the meaning set forth in the Pricing Letter.

“Margin Deficit” shall have the meaning set forth in Section 4(a) of this Agreement.

“Market Disruption Event” shall mean the occurrence of any (a) event or events that, in the reasonable determination of Buyer made by Buyer with respect to all of its commercial real estate loan repurchase facilities, result in the effective absence of a “repo market” or comparable “lending market” for purchasing (subject to repurchase) or financing debt obligations or securities secured or backed, directly or indirectly, by commercial real estate, or securities, or (b) any event or events that, in the reasonable determination of Buyer made by Buyer with respect to all of its commercial real estate loan repurchase facilities, result in the effective absence of a “securities market” for securities backed by Purchased Assets, including, but not limited to the “CMBS/CLO market”.

“Market Value” shall mean, with respect to any Purchased Asset (a) as of the Purchase Date therefor, the market value of such Purchased Asset as determined by Buyer in its sole discretion on or prior to the related Purchase Date, or (b) as of any date on which (i) any breach of a representation or warranty set forth on Schedule I hereto with respect to such Purchased Asset has occurred and is continuing, (ii) such Purchased Asset is a Delinquent Asset or is determined by Buyer not to be an Eligible Asset, or (iii) a Credit Event has occurred and is continuing with respect to such Purchased Asset, in each such case, the revised market value for such Purchased Asset on any such date shall be as determined by Buyer in its sole discretion using a similar methodology that Buyer uses for similar commercial real estate loans in Buyer’s portfolio and for similarly situated counterparties with similar commercial real estate loans, which Market Value may, in each case, be deemed by Buyer to be equal to zero; provided that.  if Seller does not deliver or cause to be delivered to Buyer any information pursuant to Article 12(r) and Exhibit E and such failure adversely affects Buyer’s ability to determine or re-determine the Market Value of any related Purchased Asset or determine whether or not a Credit Event has occurred, then Buyer may, acting in good faith, draw any adverse inference from any

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missing information in Buyer’s determination or re-determination of Market Value of the related Purchased Asset or in determining whether any Credit Event has occurred with respect thereto.

“Material Action” shall mean any action to file any insolvency, or reorganization case or proceeding, to institute proceedings to have Seller be adjudicated bankrupt or insolvent, to institute proceedings under any applicable Insolvency Law, to seek any relief under any law relating to relief from debts or the protection of debtors, to consent to the filing or institution of bankruptcy or Insolvency Proceedings against Seller, to file a petition seeking, or consent to, reorganization or relief with respect to Seller under any applicable federal or state law relating to bankruptcy or insolvency, to seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official of or for Seller or a substantial part of its property, to make any assignment for the benefit of creditors of Seller, to admit in writing in a legal proceeding or in a public forum, including but not limited to an earnings call, the Seller's inability to pay its debts generally as they become due, or to take action in furtherance of any of the foregoing.

“Material Adverse Effect” shall mean a material adverse effect on (a) the Property, business, operations or financial condition of any Seller Party, (b) the ability of any Seller Party to perform its obligations under any of the Program Documents to which it is a party, (c) the validity or enforceability of any of the Program Documents, or (d) the rights and remedies of Buyer under any of the Program Documents.

“Material Modification” shall mean any extension (other than contracted for extensions in accordance with the terms of any Purchased Asset Documents and for which there is no lender discretion), amendment, waiver, termination, rescission, cancellation, forbearance, release (other than contracted for releases in accordance with the terms of any Purchased Asset Documents and for which there is no lender discretion) or any other material modification to the terms of, or any collateral, guaranty or indemnity for, or the exercise of any right or remedy of a holder (including all lending, corporate rights, remedies, consents, approvals and waivers) of, any Purchased Asset, or any related Purchased Asset Document (including, without limitation, any such document with respect to any Commercial Mortgage Loan related to any Participation Interest). For the avoidance of doubt, (x) non-material modifications, such as consent rights over non-material leases, budgets, utilization of reserves or the release of non-material reserves, approval of escrows and bonding amounts for non-material mechanics’ or materialmen’s liens, tax abatements or tax challenges, and de minimis takings for road expansions, curb cuts or water drainage and ordinary and necessary use limitations that otherwise do not adversely impact the current use of the property, and (y) modifications for which no lender consent is permitted or required pursuant to the terms of the Purchased Asset Documents are, in each case, specifically excluded from the scope of the definition of Material Modifications.

“Materials of Environmental Concern” shall mean any hazardous, toxic or harmful substances, materials, wastes, pollutants or contaminants defined as such in or regulated under any Environmental Law.

“Maximum Aggregate Purchase Price” shall have the meaning set forth in the Pricing Letter.

“Minimum Transfer Amount” shall have the meaning set forth in the Pricing Letter.

“Mixed Use” shall mean a Mortgaged Property used for both residential and non-residential purposes.

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“Multi-Family” shall mean a property owned by the Mortgagor or for which the Mortgagor is a Ground Lessee, the primary usage of which is as a five-or-more family residential property, including all land, amenities and improvements, with individual units principally for lease to residential tenants occupying same.

“Moody’s” shall mean Moody’s Investors Service, Inc. or any successors thereto.

“Mortgage” shall mean a mortgage, deed of trust, deed to secure debt or other instrument, creating a valid and enforceable first lien on or a first priority security interest in an estate in fee simple in real property and the improvements thereon or a Ground Lease, securing a Mortgage Note or similar evidence of Indebtedness.

“Mortgage Asset File” shall have the meaning set forth in the Custodial Agreement.

“Mortgage Loan” shall mean, with respect to any Purchased Asset, a mortgage loan made in respect of the related Mortgaged Property.

“Mortgage Loan Documents” shall mean, with respect to any Commercial Mortgage Loan, those documents executed in connection with and/or evidencing or governing such Commercial Mortgage Loan, including, without limitation those that are required to be delivered to Custodian under the Custodial Agreement.

“Mortgage Note” shall mean a note or other evidence of Indebtedness of a Mortgagor secured by a Mortgage that is a Purchased Asset, including an A-Note or a B-Note.

“Mortgaged Property” shall mean the real property (including all improvements, buildings, fixtures, building equipment and personal property thereon and all additions, alterations and replacements made at any time with respect to the foregoing) and all other collateral directly or indirectly securing repayment of the debt evidenced by (a) a Mortgage Note (in the case of a Commercial Mortgage Loan) or (b) the Mortgage Note evidencing an interest in the Commercial Mortgage Loan to which such Participation Interest relates (in the case of a Participation Interest), in each case securing such Commercial Mortgage Loan.

“Mortgagor” shall collectively mean each of the obligor on a Mortgage Note and/or any grantor of the related Mortgage, including any Person who has assumed or Guaranteed the obligations of the obligor thereunder.

“Non-Controlling Interests” shall have the meaning set forth in the Pricing Letter.

“Nondefaulting Party” shall have the meaning set forth in Section 30 of this Agreement.

“Notice Date” shall have the meaning set forth in Section 3(c)(i) of this Agreement.

“Notice to Mortgagor” shall mean a notice, substantially in the form of Exhibit G to this Agreement, which Buyer may send or cause to be sent to each Mortgagor of a Purchased Asset subject to a Transaction after the occurrence and during the continuance of an Event of Default.

“Obligations” shall mean (a) any amounts owed by Seller to Buyer in connection with a Transaction hereunder, together with interest thereon (including interest which would be payable as post-petition interest in connection with any bankruptcy or similar proceeding) and all

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other fees or expenses which are payable hereunder or under any of the Program Documents, and (b) all other obligations or amounts owed by Seller to Buyer under any other contract or agreement relating to this Agreement, in each case, whether such amounts or obligations owed are direct or indirect, absolute or contingent, matured or unmatured.

“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets Control.

“Office Building” shall mean a building owned by the Mortgagor or for which the Mortgagor is a Ground Lessee, the primary usage of which is as an office building, including all land, amenities and improvements, with individual office space held principally for lease to commercial tenants and not principally for lease to recreational or residential tenants.

“One-Month LIBOR” shall mean, with respect to each Pricing Rate Period during which a Transaction is outstanding, the rate (calculated by Buyer, expressed as a percentage per annum and rounded upward, if necessary, to the next nearest one one-thousandth of 1%) for deposits in Dollars for a one-month period, which appears on Reuters Screen LIBOR01 Page as of 11:00 a.m., London time, on the Pricing Rate Determination Date or Reset Date, as applicable. If such rate does not appear on Reuters Screen LIBOR01 Page as of 11:00 a.m., London time on the Pricing Rate Determination Date or Reset Date, as applicable, One-Month LIBOR for the next Pricing Rate Period and such Pricing Rate Determination Date or Reset Date, as applicable, shall be determined as follows. Buyer shall request the principal London office of any four (4) major reference banks in the London interbank market selected by Buyer to provide such reference bank’s offered quotation to prime banks in the London interbank market for deposits in Dollars for a one (1) month period as of 11:00 a.m., London time, on such Pricing Rate Determination Date or Reset Date, as applicable, in a principal amount of not less than $1,000,000 that is representative for a single transaction in the relevant market at such time. If two (2) or more such offered quotations are so provided, One-Month LIBOR shall be the arithmetic mean of such quotations. If fewer than two (2) such quotations are so provided, Buyer shall request any three (3) major banks in New York City selected by Buyer to provide such bank’s rate for loans in Dollars to leading European banks for a one (1) month period as of approximately 11:00 a.m., New York City time, on the Pricing Rate Determination Date or Reset Date, as applicable, for deposits in a principal amount of not less than $1,000,000 that is representative for a single transaction in the relevant market at such time. If two (2) or more such rates are so provided, One-Month LIBOR shall be the arithmetic mean of such rates.

“Other Connection Taxes” means, with respect to Buyer, Taxes imposed as a result of a present or former connection between Buyer and the jurisdiction imposing such Tax (other than connections arising from Buyer 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 Program Document, or sold or assigned an interest in any Transaction or Program Document).

“Other Taxes” shall mean any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes arising from any payment made under any Program Document or 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 Program Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.

“Participation Certificate” shall mean the original participation certificate, if any, that was executed and delivered in connection with a Participation Interest.

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“Participation Interest” shall mean a performing senior or pari passu senior or junior participation interest in a performing Commercial Mortgage Loan evidenced by a Participation Certificate or a non pari passu junior participation interest in a performing Commercial Mortgage Loan to the extent that the senior participation interest in such Commercial Mortgage Loan is also a Purchased Asset.

“Participation Interest Documents” shall mean, for any Participation Interest, the Participation Certificate, together with any co-lender agreements, participation agreements and/or other intercreditor agreements or other documents governing or otherwise relating to such Participation Interest, and the Mortgage Loan Documents for the related Commercial Mortgage Loan, and including, without limitation, those documents which are required to be delivered to Custodian under the Custodial Agreement (which documents so required to be delivered to Custodian shall only be required to include, for the avoidance of doubt, copies of the Mortgage Loan Documents for the related Commercial Mortgage Loan).

“Payment Date” shall mean the fifteenth (15th) day of each calendar month (or the preceding Business Day if such day is not a Business Day).

“PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“Person” 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).

“Plan” shall have the meaning set forth in Section 11(r) of this Agreement.

“Pledge Agreement” shall mean the Pledge Agreement, dated as of the date hereof, between Buyer and Pledgor, as amended, modified, waived, supplemented, extended, restated or replaced from time to time.

“Pledged Collateral” shall have the meaning set forth in the Pledge Agreement.

“Pledgor” shall mean Terra Mortgage Portfolio III, LLC, a Delaware limited liability company, together with its successors and permitted assigns.

“Post-Default Rate” shall have the meaning set forth in the Pricing Letter.

“Power of Attorney” shall have the meaning set forth in Section 8(c) of this Agreement.

“Price Differential” shall mean, with respect to any Transaction hereunder as of any date, the aggregate amount obtained by daily application of the Pricing Rate (or, during the continuation of an Event of Default, by daily application of the Post-Default Rate) to the Purchase Price for such Transaction, on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the Repurchase Date (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction).

“Pricing Letter” shall mean that certain letter agreement among Buyer and each Seller Party, dated as of the date hereof, as the same may be amended from time to time.

“Pricing Rate” shall mean, for any Pricing Rate Period and any Purchased Asset, an annual rate equal to the sum of (i) One-Month LIBOR (or, if an Alternative Rate is in effect

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pursuant to Section 6(d)(i) of this Agreement, such Alternative Rate), and (ii) the relevant Pricing Spread with respect to such Purchased Asset, in each case, for the applicable Pricing Rate Period for the related Purchased Asset. The Pricing Rate shall be subject to adjustment and/or conversion as provided in the Program Documents and/or in the related Transaction Request and Confirmation.

“Pricing Rate Determination Date” shall mean in the case of the first Pricing Rate Period with respect to any Transaction, the Effective Date, and with respect to each subsequent Pricing Rate Period, the first day on which such Pricing Rate Period begins.

“Pricing Rate Period” shall mean (a) with respect to the first Payment Date, the period from and including the applicable Purchase Date through and including the next succeeding 14th calendar day of the month, and (b) with respect to any subsequent Payment Date, the period from and including the 15th calendar day of the month preceding the applicable Payment Date through and including the 14th calendar day of the month in which the applicable Payment Date occurs.

“Pricing Spread” shall have the meaning set forth in the Pricing Letter.

“Principal Payment” shall mean, for any Purchased Asset, any amount applied to reduce the principal or other invested amount of such Purchased Asset, including, without limitation, (i) a scheduled principal payment, (ii) principal prepayments from any source and of any nature whatsoever, (iii) net insurance or net condemnation proceeds, to the extent applied to reduce the principal amount or other invested amount of the related Purchased Asset, or (iv) any net proceeds from any sale, refinancing, liquidation or other disposition of the underlying real property or interest relating to such Purchased Asset to the extent applied to reduce the principal amount or the invested amount of the related Purchased Asset.

“Principal Proceeds” shall mean, with respect to any Purchased Asset, any scheduled or unscheduled payment or prepayment of principal (including net sale proceeds) received by Control Account Bank or allocated as principal in respect of any such Purchased Asset.

“Product” shall mean a type or category of Mortgaged Property (e.g., Healthcare, Multi-Family, Retail, Self-Storage, Industrial, Office Building, Hospitality, Student Housing and Mixed-Use) that secures the related Purchased Asset or the Commercial Mortgage Loan to which such Purchased Asset relates.

“Program Documents” shall mean this Agreement, the Pricing Letter, the Custodial Agreement, the Program Guaranty, the Pledge Agreement, the Control Agreement, the Servicing Agreement, the Servicer Notice, if any, and the Power of Attorney.

“Program Guaranty” shall mean that certain guaranty made by Guarantor in favor of Buyer, as amended from time to time.

“Prohibited Transferee” shall have the meaning specified in the Pricing Letter.

“Property” shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

“Purchase Agreement” shall mean any purchase agreement between Seller and any Transferor pursuant to which Seller purchased or acquired a Purchased Asset which is subsequently sold to Buyer hereunder.

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“Purchase Closing Statement” shall mean the form attached as Annex 2 to the Transaction Request and Confirmation for each Eligible Asset proposed to be sold to Buyer in accordance with, and subject to the terms and conditions of, this Agreement.

“Purchase Date” shall mean each date on which Purchased Assets are sold by Seller to Buyer pursuant to this Agreement.

“Purchase Price” shall have the meaning set forth in the Pricing Letter.

“Purchase Price Percentage” shall have the meaning set forth in the Pricing Letter.

“Purchased Asset” shall mean the Commercial Mortgage Loans, A-Notes and B-Notes, and/or the Participation Interests, together with the related Repurchase Assets transferred by Seller to Buyer in a Transaction hereunder, and listed on the related Transaction Request and Confirmation.

“Purchased Asset Documents” shall mean, individually or collectively, as the context may require, the related Mortgage Loan Documents and/or the related Participation Interest Documents.

“Qualified Appraisal” shall mean an appraisal of the related Mortgaged Property signed by a qualified appraiser who had no interest, direct or indirect, in the Mortgaged Property or in any loan made on the security thereof; and whose compensation was and is not affected by the approval or disapproval of the Commercial Mortgage Loan, and such appraisal and appraiser satisfied the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act or 1989, as in effect on the date such Commercial Mortgage Loan was originated.

“Records” shall mean all instruments, agreements and other books, records, and reports and data stored in other media maintained by Seller or any other person or entity with respect to a Purchased Asset. Records shall include the Mortgage Notes, any Mortgages, the Mortgage Asset Files, the credit files related to the Purchased Asset and any other instruments necessary to document or service a Purchased Asset.

“Reference Time” with respect to any setting of the then-current Benchmark shall mean (1) if such Benchmark is USD LIBOR, 11:00 a.m. (London time) on either the Pricing Rate Determination Date or the Reset Date, as applicable, and (2) if such Benchmark is not One-Month LIBOR, the time determined by Buyer in its reasonable discretion.

“Register” shall have the meaning set forth in Section 19(b) of this Agreement.

“Regulations T and U” shall mean Regulations T and U 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.

“Release” shall mean any generation, treatment, use, storage, transportation, manufacture, refinement, handling, production, removal, remediation, disposal, presence or migration of Materials of Environmental Concern on, about, under or within all or any portion of any property or Mortgaged Property in violation of, or that would incur liability pursuant to, Environmental Law.

“Relevant Governmental Body” shall mean the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or

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convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.

“Reportable Event” shall mean any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under subsections .21, .22, .24, .26, .27 or .28 of PBGC Reg. § 4043.

“Reporting Date” shall mean the 22nd day of each month, or if such day is not a Business Day, the next succeeding Business Day.

“Reporting Period” shall have the meaning provided in Section 11(s) of this Agreement.

“Repurchase Assets” shall have the meaning provided in Section 8(a) of this Agreement.

“Repurchase Date” shall mean the date on which Seller is to repurchase any or all Purchased Assets subject to a Transaction from Buyer or the date on which a Purchased Asset shall no longer be subject to a Transaction, which shall be the earliest of (i) the Termination Date, (ii) any date determined by application of the provisions of Sections 3(f) or 14 of this Agreement, or (iii) the date that is two (2) Business Days prior to the maturity date of such Purchased Assets or, in the case of a Participation Interest, the maturity date of the underlying Mortgage Loan (subject to extension, if applicable, in accordance with the related Purchase Asset Documents); provided, that, solely with respect to this clause (iii), the settlement with respect to such Repurchase Date and Purchased Asset may occur two (2) Business Days later.

“Repurchase Price” shall mean the price at which Purchased Assets are to be transferred from Buyer or its designee to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of (i) the outstanding Purchase Price for the related Purchased Asset, (ii) the accrued but unpaid Price Differential for the related Purchased Asset, (iii) in connection the Purchased Assets repurchased on the Termination Date or the last Purchased Asset subject to repurchase hereunder following or in connection with Seller providing notice to Buyer that it intends to terminate this Agreement, the Facility Exit Fee, and (iv) any other fees, expenses, indemnities or other amounts due and payable to Buyer as of such date under this Agreement or any other Program Document.

“Request for Repurchase and Confirmation” shall mean a request from Seller to Buyer, in the form attached as Exhibit H to this Agreement, to repurchase Purchased Assets subject to a Transaction.

“Requirements of Law” shall mean, with respect to any Person or property or assets of such Person and as of any date, all of the following applicable thereto as of such date: all applicable Governing Documents and all laws as in effect on such date (whether or not in effect on the Effective Date), statutes, rules, regulations, treaties, codes, ordinances, permits, pollution and spill prevention plans, certificates, orders and licenses of and interpretations by any Governmental Authority (including Environmental Laws, ERISA, regulations of the Board of Governors of the Federal Reserve System, and laws, rules and regulations relating to usury, licensing, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy), judgments, decrees, injunctions, writs, awards or orders of any court, arbitrator or other Governmental Authority.

“Reset Date” shall mean, with respect to any Pricing Rate Period, the second Business Day preceding the first day of such Pricing Rate Period with respect to any Transaction.

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“Responsible Officer” shall mean, with respect to any Person, the chief executive officer, the chief financial officer, the chief accounting officer, the president, the treasurer or the chief operating officer of such Person or such other officer designated as an authorized signatory pursuant to such Person’s Governing Documents.

“Retail” shall mean a property owned by the Mortgagor or for which the Mortgagor is a Ground Lessee, the primary usage of which is as one or more retail stores, held principally for lease to one or more commercial retail tenants and not principally for lease to recreational or residential tenants.

“Reuters Screen LIBOR01 Page” shall mean the display page currently so designated on the Reuters Monitor Money Rates Service (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices).

“S&P” shall mean Standard & Poor’s Ratings Services, or any successor thereto.

“Sanctioned Country” shall mean any country or territory that is the subject of Sanctions.

“Sanctioned Person” shall mean any Person that is, or is owned or controlled by Persons that are, (i) the subject or target of Sanctionsor (ii) located, organized or resident in a Sanctioned Country.

“Sanctions” shall mean, collectively, any sanctions administered or enforced by OFAC, the U.S. Department of State, the United Nations Security Council, the Swiss State Secretariat For Economic Affairs, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.

“Scheduled Indebtedness” shall have the meaning set forth in Section 11(n) of this Agreement.

“Scheduled Payment” shall mean the scheduled payment of principal and/or interest on a Purchased Asset.

“SEC” shall have the meaning set forth in Section 33 of this Agreement.

“Section 4402” shall have the meaning set forth in Section 30 of this Agreement.

“Self-Storage” shall mean a property owned by the Mortgagor or for which the Mortgagor is a Ground Lessee, the primary usage of which is a self-storage facility.

“Seller” shall mean Terra Mortgage Capital III, LLC, a Delaware limited liability company, or any successors in interest thereto.

“Seller Party” shall mean, individually, each of Seller, Pledgor, Manager and Guarantor, and collectively, all of the foregoing, the “Seller Parties”.

“Seller’s Acquisition Cost” shall have the meaning set forth in the Pricing Letter.

“Servicer Notice” shall mean the Servicer Notice and Irrevocable Instruction Letter agreement between Buyer, Seller and Loan Servicer, substantially in the form of Exhibit J to this Agreement, as amended, supplemented or otherwise modified from time to time.

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“Servicing Agreement” shall mean (i) that certain Servicing and Asset Management Agreement, dated as of November 8, 2021, between Loan Servicer and Seller as approved by Buyer, amended from time to time with the consent of Buyer, or (ii) any other servicing agreement as approved by Buyer in its sole discretion.

“Servicing Records” shall have the meaning set forth in Section 16(b) of this Agreement.

“Servicing Rights” shall mean, with respect to any Purchased Asset, all right, title and interest of any Seller Party, Loan Servicer or any Affiliate of any Seller Party, Loan Servicer or any other Person, in and to any and all of the following: (a) rights to service and/or sub-service, and collect and make all decisions with respect to, the Purchased Assets and/or any related Commercial Mortgage Loans, (b) amounts received by any Seller Party, Loan Servicer or any Affiliate of any Seller Party, Loan Servicer, or any other Person, for servicing and/or sub-servicing the Purchased Assets and/or any related Commercial Mortgage Loans, (c) late fees, penalties or similar payments as compensation with respect to the Purchased Assets and/or any related Commercial Mortgage Loans, (d) agreements and documents creating or evidencing any such rights to service and/or sub-service the Purchased Assets (including, without limitation, all servicing agreements), together with all documents, files and records relating to the servicing and/or sub-servicing of the Purchased Assets and/or any related Commercial Mortgage Loans, and rights of any Seller Party, Loan Servicer, or any Affiliate of any Seller Party, Loan Servicer, or any other Person thereunder, (e) rights to establish and administer any escrow, reserve and similar accounts with respect to the Purchased Assets and/or any related Commercial Mortgage Loans, (f) rights to appoint, designate and retain any other servicers, sub-servicers, special servicers, agents, custodians, trustees and liquidators with respect to the Purchased Assets and/or any related Commercial Mortgage Loans, and (g) accounts and other rights to payment related to the Purchased Assets and/or any related Commercial Mortgage Loans.

“Single Purpose Entity” shall mean a corporation, limited partnership or limited liability company that, since the date of its formation (unless otherwise indicated in this Agreement) and at all times on and after the date hereof, has complied with and shall at all times comply with the provisions of Section 10.

“SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR Administrator’s Website on the immediately succeeding Business Day.

“SOFR Administrator” shall mean the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

“SOFR Administrator’s Website” shall mean the website of the Federal Reserve Bank of New York, 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.

“Solvent” shall mean, with respect to any Person at any date of determination, having a state of affairs such that all of the following conditions are met at such time: (a) the fair value of the assets and property of such Person is greater than the amount of such Person’s liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code, (b) the present fair salable value of the assets and property of such Person in an orderly liquidation of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its assets and property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business, (d) such Person does not

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intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and (e) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s assets and property would constitute unreasonably small capital.

“Student Housing” shall mean a property owned by a Mortgagor or for which the Mortgagor is a Ground Lessee, the primary usage of which is as a student housing property.

“Sub-Limit” shall have the meaning set forth in the Pricing Letter.

“Subsidiary” 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 by one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.

“Summary Diligence Materials” shall mean the items described on Annex 2 to Exhibit F to this Agreement for each Eligible Asset proposed to be sold to Buyer in accordance with, and subject to the terms and conditions of, this Agreement.

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Termination Date” shall have the meaning set forth in the Pricing Letter.

“Term SOFR” shall mean, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

“Third Party Participants” shall have the meaning set forth in Section 12(v) of this Agreement.

“Third Party Transaction Parties” shall have the meaning set forth in Section 17 of this Agreement.

“Transaction” shall have the meaning set forth in Section 1 of this Agreement.

“Transaction Request and Confirmation” shall mean a request from Seller to Buyer, in the form attached as Exhibit F to this Agreement, to enter into a Transaction, which shall not be binding upon Buyer unless and until countersigned by Buyer and delivered to Seller.

“Transferor” shall mean the seller of an Asset under a Purchase Agreement.

“Treasury Regulations” shall mean regulations promulgated by the U.S. Department of the Treasury under the Code.

“Trust Receipt” shall have the meaning set forth in the Custodial Agreement.

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“Unadjusted Benchmark Replacement” shall mean the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided 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 Repurchase Assets 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 of this Agreement relating to such perfection or effect of perfection or non-perfection.

“Upfront Fee” shall have the meaning set forth in the Pricing Letter.

“USD LIBOR” shall mean the London interbank offered rate for U.S. dollars.

“U.S. Person” shall mean any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.

“U.S. Special Resolution Regime” shall mean each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

“U.S. Tax Compliance Certificate” shall have the meaning set forth in Section 7(e)(ii)(B)(3) of this Agreement.

“Wet Funded Purchased Asset” shall mean a Purchased Asset which Buyer agrees in its sole and absolute discretion to purchase hereunder simultaneously with the origination or acquisition thereof, which origination or acquisition is financed, in part, with the Purchase Price, pursuant to Seller’s request, paid directly to a title company or other settlement agent, in each case, approved by Buyer, for disbursement in connection with such origination or acquisition. A Purchased Asset shall cease to be a Wet Funded Purchased Asset after Custodian has delivered a Trust Receipt to Buyer certifying its receipt of the Mortgage Asset File therefor.

SECTION 3.INITIATION; TERMINATION

(a)Conditions Precedent to Initial Transaction. Buyer’s agreement to enter into the initial Transaction hereunder is subject to the satisfaction, immediately prior to or concurrently with the making of such Transaction, of the condition precedent that Buyer shall have received from Seller all of the following, each of which shall be satisfactory in form and substance to Buyer and its counsel:

(i)Program Documents. The Program Documents (other than the Control Agreement, as provided for in Section 5(a) of this Agreement), duly executed and delivered to Buyer.

(ii)Governing Documents. Certified copies of the Governing Documents of each Seller Party.

(iii)Good Standing Certificate. A certified copy of a good standing certificate from the jurisdiction of organization of each Seller Party, dated no earlier than the date ten (10) Business Days prior to the Effective Date.

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(iv)Officer’s Certificate. Certificates of a Responsible Officer of each of Seller, Pledgor and Guarantor with respect to attached copies of the Governing Documents and applicable resolutions of Seller, Pledgor and Guarantor, and the incumbencies and signatures of Responsible Officers of Seller, Pledgor and Guarantor executing the Program Documents to which each is a party, evidencing the authority of Seller, Pledgor and Guarantor with respect to the execution, delivery and performance thereof.

(v)Opinions of Counsel. Such opinions from counsel to Seller, Pledgor and Guarantor as Buyer may require, including with respect to corporate matters, due formation, existence and good standing of Seller, Pledgor and Guarantor, the due authorization, execution, delivery and enforceability of each Program Document (other than with respect to the Control Agreement, as provided for in Section 5(a) of this Agreement), non-contravention, no consents or approvals required other than those that have been obtained, validly granted and perfected security interests in the Purchased Assets, the Pledged Collateral and any other collateral pledged pursuant to the Program Documents (other than the collateral to be subsequently pledged pursuant to the Control Agreement, as provided for in Section 5(a) of this Agreement), Investment Company Act matters and the applicability of Bankruptcy Code safe harbor (including Buyer’s related liquidation, termination and offset rights).

(vi)Security Interest. Evidence that all other actions necessary or, in the opinion of Buyer, desirable to perfect and protect Buyer’s interest in the Purchased Assets and other Repurchase Assets have been taken, including, without limitation, UCC searches and duly authorized and filed Uniform Commercial Code financing statements on Form UCC-1.

(vii)Fees, Costs and Expenses. Buyer has received payment in full of the Upfront Fee, and any other fees, costs and expenses due to Buyer hereunder.

(viii)Beneficial Ownership Due Diligence. Buyer shall have (A) received, sufficiently in advance of (but in any event not less than three (3) Business Days prior to) the Effective Date a Beneficial Ownership Certification in relation to Seller to the extent that Seller qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, and (B) completed to its satisfaction its due diligence concerning any information required to be obtained by Buyer pursuant to the Beneficial Ownership Regulation as it may require, and all such information provided to Buyer by Seller or Guarantor must be true, accurate, complete and not misleading, all as determined by Buyer.

(ix)Guarantor Compliance Certificate. Buyer shall have received a duly complete Compliance Certificate from Guarantor, certifying as to Guarantor’s compliance as of the Closing Date with all financial covenants set forth in Section 9 of the Guarantee.

(x)Other Documents. Such other documents as Buyer may reasonably request, in form and substance reasonably acceptable to Buyer.

(b)Conditions Precedent to all Transactions. Buyer shall not be obligated to enter into any Transaction or purchase any Eligible Asset, or be obligated to take, fulfill or perform any other actions hereunder, until the following additional conditions have been satisfied

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or waived by Buyer, with respect to the applicable Eligible Asset on and as of the Purchase Date for such Eligible Asset (including the first Purchase Date) therefor:

(i)Due Diligence Review. Without limiting the generality of Section 17 of this Agreement, Buyer shall have completed, to its good faith satisfaction, its preliminary due diligence review of the related Purchased Assets; provided that if the Purchased Asset Documents prohibit or restrict Buyer from performing such due diligence review to the satisfaction of Buyer and therefore Buyer fails to confirm such asset as an Eligible Asset, such asset shall be an ineligible asset.

(ii)No Default. Both immediately prior to the Transaction, and after giving effect thereto and to the intended use thereof, no Default or Event of Default shall have occurred and be continuing under the Program Documents.

(iii)Representations and Warranties. Both immediately prior to the Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by each Seller Party in Section 11 of this Agreement, shall be true, correct and complete with the same force and effect as if made as of such Purchase 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). If the related Purchased Asset is secured by Healthcare property, the related Confirmation shall add such additional representations and warranties as Buyer may require.

(iv)Maximum Aggregate Purchase Price. After giving effect to the requested Transaction, the aggregate outstanding Purchase Price attributable to all Purchased Assets subject to then outstanding Transactions under this Agreement shall not exceed the Maximum Aggregate Purchase Price.

(v)No Margin Deficit. After giving effect to the requested Transaction, no Margin Deficit shall have occurred or be continuing.

(vi)Transaction Request and Confirmation. Seller shall have delivered to (I) Buyer, not later than 11:00 a.m., New York time, ten (10) Business Days’ prior to the requested Purchase Date (a) a complete set of Summary Diligence Materials with respect to all Purchased Assets subject to the requested Transaction, and (b) a Transaction Request and Confirmation with respect to the requested Transaction, duly completed and executed by Seller, and (II) to Custodian, in accordance with the timeframes set forth in the Custodial Agreement, a Transaction Request and Confirmation with respect to the requested Transaction together with the related Mortgage Asset File.

(vii)Delivery of Mortgage Asset File. On or before each Purchase Date with respect to each Purchased Asset, Seller shall deliver or cause to be delivered to Buyer or its designee (initially, Custodian) the Custodial Delivery Letter in the form attached hereto as Exhibit I to this Agreement. In connection with each sale, transfer, conveyance and assignment of a Purchased Asset (A) other than a Wet Funded Purchased Asset, on or prior to the Purchase Date with respect to such Purchased Asset, Seller shall deliver or cause to be delivered and released to Custodian the documents set forth in the Mortgage Asset File, pertaining to each of the Purchased Assets identified in the Custodial Delivery Letter delivered therewith, and (B) that is a Wet Funded Purchased Asset, Seller shall (i) no later than 11:00 a.m. (New York City time) on the Purchase Date with respect to such Purchased Asset, deliver or cause the Bailee that is party to the related Bailee Letter to deliver to Custodian and Buyer, PDF (as such term is defined herein) copies of the related Mortgage Asset File, and shall cause Custodian to deliver a Trust Receipt on the Purchase Date concerning the receipt of copies of the Mortgage Asset File, and (ii) within three (3)

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Business Days after the Purchase Date of such Purchased Asset, Seller shall deliver or cause to be delivered and released to Custodian a complete PDF set of executed copies of all documents in the Mortgage Asset File pertaining to such Purchased Asset; provided, that, in connection with each Wet Funded Purchased Asset, Seller shall (x) also deliver to Custodian and Buyer a certificate of an authorized representative of Seller certifying that any copies of documents delivered represent true and correct copies of the originals of such documents and (y) certify to Buyer that any Sub-Limits applicable to Wet Funded Purchased Assets will be in compliance immediately after giving effect to the proposed purchase hereby. Any assignment documents related to the transfer of the Purchased Assets to Buyer shall be delivered in blank.

(viii)Delivery of Trust Receipt. Custodian shall have delivered to Buyer, in accordance with the timeframes set forth in the Custodial Agreement, a Trust Receipt (accompanied by an Asset Schedule and Exception Report) with respect to each Purchased Asset subject to the requested Transaction.

(ix)Servicer Notice. To the extent not previously delivered, a Servicer Notice for each applicable Loan Servicer.

(x)Fees and Expenses. Buyer shall have received all fees and reasonable and documented expenses as contemplated by Sections 9(c) and 15(b) of this Agreement which amounts, at Buyer’s option, may be withheld from the proceeds remitted by Buyer to Seller pursuant to any Transaction hereunder; and with respect to those fees and expenses that do not have a specific due date hereunder shall be due within thirty (30) days following the date a Responsible Officer of any Seller Party has received an invoice related thereto.

(xi)No Violation of Law. The entry by Buyer into this Agreement or any Transaction hereunder has or would result in any violation of any Requirements of Law (other than as a result of any amendments made to Buyer’s Governing Documents). No change in the interpretation or application of any Requirements of Law thereof or compliance by Buyer 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 has occurred that would result in Buyer being in violation of such Requirements of Law as a result of Buyer being a party to this Agreement or any Transaction hereunder.

(xii)No Material Adverse Change. No Material Adverse Effect shall have occurred and be continuing since the Effective Date.

(xiii)Absence of Market Disruption Event. No Market Disruption Event shall have occurred, as determined by Buyer.

(xiv)Notice to Mortgagors. Contemporaneously with the sale to Buyer of any Purchased Asset, Seller shall deliver to Custodian a completed, undated and signed in blank Notice to Mortgagor, substantially in the form of Exhibit G to this Agreement, with respect to each Purchased Asset subject to a Transaction, instructing, as applicable, such Mortgagor, and any servicer, paying agent or similar Person with respect to such Purchased Asset (as applicable) to pay all amounts payable under the related Purchased Asset into the Control Account or as otherwise designated by Buyer. Contemporaneously with the sale to Buyer of any Purchased Asset, Seller shall deliver to the Loan Servicer a notice instructing such Loan Servicer to remit all amounts payable under the related Purchased Asset into the Control Account. Buyer shall not send any Notice to Mortgagor directly to any Mortgagor unless and until (x) such time as the Loan Servicer is, for any reason, no longer servicing such Purchased Asset, or (y) the occurrence and during the

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continuation of an Event of Default (which Event of Default shall be deemed to be continuing at all times from and after the occurrence of the Accelerated Repurchase Date).

(xv)Delivery of Required Notices. To the extent the related Purchased Asset Documents contain notice, cure and other provisions in favor of a pledgee under a repurchase or warehouse facility, and without prejudice to the sale treatment of such Purchased Asset to Buyer, Buyer has received satisfactory evidence that Seller has given notice to the applicable Persons of Buyer’s interest in such Purchased Asset and otherwise satisfied any other applicable requirements under such pledgee provisions so that Buyer is entitled to the rights and benefits of a pledgee under such pledgee provisions.

(xvi)Termination Date. The Termination Date has not yet occurred.

Each Transaction Request and Confirmation delivered by Seller hereunder shall constitute a certification by Seller that all the conditions set forth in this Section 3(b) (other than sub-clause (i) above) have been satisfied as of the date of such notice or request, and remains true and correct as of the related Purchase Date.

(c)Initiation.

(i)Not later than 11:00 a.m., New York time, five (5) Business Days’ in advance of the proposed Purchase Date (the date on which such notice is given, the “Notice Date”), Seller shall request that Buyer enter into a Transaction by furnishing to Buyer (or its designee), Loan Servicer and to Custodian as specified in the Custodial Agreement, a Transaction Request and Confirmation (with respect to each Eligible Asset) accompanied by a Complete Submission. Such Transaction Request and Confirmation shall include all information required by Buyer pursuant to Exhibit F to this Agreement.

(ii)Following receipt of a Transaction Request and Confirmation (such Transaction Request and Confirmation shall be free of any erroneous computer data and improperly formatted information as described in Section 3(c)(i) above) and a Complete Submission, Buyer shall, as hereinafter provided, inform Seller of its election to enter into a Transaction to purchase any Purchased Assets proposed to be sold to Buyer by Seller hereunder. In connection therewith, if any of the information provided by Seller contains erroneous computer data, is not formatted properly or the computer fields are otherwise improperly aligned, Seller shall provide written or electronic notice to Buyer describing each such error and Seller shall correct the computer data, reformat the information or properly align the computer fields, as applicable. Buyer or its designee shall have the right to review all Eligible Assets proposed to be sold to Buyer and conduct its own due diligence of such Eligible Assets as Buyer determines in its sole discretion. Upon completion of its review, if Buyer has determined, in its sole discretion, to proceed with a proposed Transaction, Buyer shall confirm the terms for such proposed Transaction attributable to the Eligible Asset, including the Purchase Price, Purchase Price Percentage, the Market Value, the Pricing Rate for such Transaction. The terms thereof shall be set forth in the Transaction Request and Confirmation signed by Seller, and confirmed by Buyer by countersigning the Transaction Request and Confirmation, to be returned to Seller by the end of the day on each Purchase Date. To the extent any term in the Transaction Request and Confirmation is incomplete, inconsistent with, or otherwise adds terms to the Agreement, or for any other reason, Buyer shall have no obligation to execute and/or deliver the Transaction Request and Confirmation to Seller or enter into such Transaction.

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(iii)Upon satisfaction of the applicable conditions precedent set forth in Sections 3(a) and 3(b) of this Agreement, and subject to due diligence review and approval of the proposed Purchased Assets in accordance with Section 17 of this Agreement, Buyer may agree to enter into such requested Transaction so long as the conditions set forth herein are satisfied and after giving effect to the requested Transaction the aggregate outstanding Purchase Price of all Transactions does not exceed the Maximum Aggregate Purchase Price, in which case, upon returning a fully executed Confirmation with respect to such Purchased Asset, Buyer shall fund the Purchase Price in accordance with this Agreement. Buyer’s funding the Purchase Price of the Transaction and Seller’s acceptance thereof, will constitute the parties’ agreement to enter into such Transaction. Upon remittance of the Purchase Price to Seller, Seller hereby grants, assigns, conveys and transfers to Buyer on a servicing released basis, all rights, and a first priority security interest in and to the Purchased Assets evidenced on the related Transaction Request and Confirmation.

(iv)Each Transaction Request and Confirmation, upon the counter-signature thereof by Buyer, together with this Agreement, shall be conclusive evidence of the terms of the Transaction(s) covered thereby.

(v)The Repurchase Date for each Transaction shall not be later than the Termination Date.

(vi)No later than the date and time set forth in the Custodial Agreement, Seller shall deliver to Custodian the Mortgage Asset File pertaining to each proposed Purchased Asset to be purchased by Buyer.

(vii)Upon Buyer’s receipt of the Trust Receipt (accompanied by an Asset Schedule and Exception Report) in accordance with the Custodial Agreement and subject to the provisions of this Section 3, the Purchase Price will then be made available to Seller by Buyer transferring, via wire transfer, in the aggregate amount of such Purchase Price in funds immediately available no later than 4:00 p.m., New York time on the date of its receipt of such Trust Receipt, provided that such Trust Receipt and all other required documents are received by Buyer or its designee no later than 11:00 a.m., New York time.

(d)Future Funding Transactions. Buyer’s agreement to enter into any Future Funding Transaction shall be subject to the satisfaction of the following conditions precedent, the satisfaction of which shall be determined by Buyer in its sole and absolute discretion, both immediately prior to entering into such Future Funding Transaction and also after giving effect to the consummation thereof:

(i)Seller shall give Buyer written notice of each Future Funding Transaction, together with a signed, written future funding transaction request and confirmation in the form of Exhibit A to this Agreement prior to the related Future Funding Date (each, a “Future Funding Transaction Request and Confirmation”), signed by a Responsible Officer of Seller. Each Future Funding Transaction Request and Confirmation shall identify the related Purchased Asset, shall identify Buyer and Seller, shall set forth the requested Future Funding Amount, and shall be executed by both Buyer and Seller; provided, however, that Buyer shall not be liable to Seller if it inadvertently acts on a Future Funding Transaction Request and Confirmation that has not been signed by a Responsible Officer of Seller. Each Future Funding Transaction Request and Confirmation, together with this Agreement, shall be conclusive evidence of the terms of the Future Funding Transaction covered thereby, and shall be construed to be cumulative to the extent possible. If terms in a Future Funding Transaction Request and

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Confirmation are inconsistent with terms in this Agreement with respect to a particular Future Funding Transaction such Future Funding Transaction Request and Confirmation shall prevail.

(ii)For each proposed Future Funding Transaction, no less than five (5) Business Days prior to the proposed Future Funding Date, Seller shall deliver to Buyer a Future Funding Request Package. Buyer shall have the right to conduct such additional due diligence of any changes to the related Purchased Asset since the related initial Purchase Date as Buyer deems necessary in its sole discretion and shall have the right to ensure that such Purchased Asset has remained and continues to be an Eligible Asset. Prior to the approval of each proposed Future Funding Transaction by Buyer, Buyer shall have confirmed that (A) all of the applicable conditions precedent for a Transaction, as described in Section 3(b) of this Agreement, have been met by Seller, (B) each of the Eligibility Criteria are satisfied, (C) the related Purchased Asset is not a Delinquent Asset, and (D) all related conditions precedent to the applicable advance set forth in the related Purchased Asset Documents have been satisfied, Buyer shall approve such Future Funding Transaction.

(iii)Upon the approval by Buyer of a particular Future Funding Transaction, Buyer shall deliver to Seller a signed copy of the related Future Funding Transaction Request and Confirmation described in clause (i) above, on or before the related Future Funding Date. On the related Future Funding Date, (a) if an escrow agreement has been established in connection with such Future Funding Transaction, Buyer shall remit the related Future Funding Amount to the related escrow account, (b) if the terms of the Purchased Asset Documents provide for a reserve account in connection with future advances, Buyer shall remit the related Future Funding Amount to the applicable reserve account and (c) otherwise, Buyer shall remit the related Future Funding Amount to the Loan Servicer who shall forward it directly to the related Mortgagor, or otherwise apply the related Future Funding Amount as required under the terms of the related Purchased Asset Documents.

(e)[reserved].

(f)Optional Repurchase; Mandatory Repurchase.

(i)Provided that no Default or Event of Default has occurred and is continuing, no Margin Deficit (other than with respect to the asset then being repurchased) exists and no Default, Event of Default or Margin Deficit (other than with respect to the asset then being repurchased) will result therefrom, Seller may voluntarily repurchase upon payment of the Repurchase Price and subject to the other conditions set forth herein, any Purchased Asset on any Business Day by delivering to Buyer a Request for Repurchase and Confirmation no more than once per week unless consented to in writing by Buyer in its sole discretion. If Seller intends to make such a repurchase, Seller shall give at least five (5) Business Days’ prior written notice thereof to Buyer, designating the Purchased Asset(s) to be repurchased. If such notice is given and not subsequently revoked, the amount specified in such notice shall be due and payable on the date specified therein, and, on receipt, such amount shall be applied to the Repurchase Price for the designated Purchased Assets. Any repurchase of a Purchased Asset may occur simultaneously with a sale of the Purchased Asset to a third party investor.

(ii)So long as no Default or Event of Default has occurred and is continuing, Seller shall have the right on any Business Day, upon five (5) Business Days’ prior written notice to Buyer, to repurchase in part the Repurchase Price of any Purchased Asset, without terminating the applicable Transaction. In connection with any reduction

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of outstanding Repurchase Price (other than a termination of a Transaction) pursuant to this Section 3(f)(ii), Buyer and Seller shall amend and restate the existing Confirmation for the Transaction to set forth the current outstanding Repurchase Price and any other changes related thereto.

(iii)In addition to any other rights and remedies of Buyer under any Program Document, Seller shall immediately repurchase any Purchased Asset where (A) any of the representations and warranties with respect to such Purchased Asset set forth in Schedule 1 of this Agreement are not true or correct in any respect, (B) such Purchased Asset no longer qualifies as an Eligible Asset, as determined by Buyer in its sole good faith discretion, (C) such Purchased Asset has caused any of the Sub-limits to be exceeded, or (D) any of the documents required to be delivered to Custodian under the Custodial Agreement have not been so delivered on a timely basis in accordance with the Custodial Agreement and this Agreement. In addition. Seller shall effect a partial or complete repurchase of one or more Purchased Assets, as directed by Buyer, to the extent necessary to cure a breach of a Sub-Limit.

(iv)Provided that (A) other than with respect to repayment in full of the Purchased Asset in accordance with the Purchased Asset Documents, no Default or Event of Default has occurred and is continuing, and no Default or Margin Deficit will result therefrom, and (B) Buyer has received 100% of the Repurchase Price upon repurchase with respect to any Purchased Asset, Buyer agrees to release its ownership interest hereunder in such Purchased Asset (including the Repurchase Assets related thereto) and transfer such Purchased Asset to Seller pursuant to a letter agreement substantially in the form of Annex 4-C to the Custodial Agreement.

(v)On the Business Day prior to the Termination Date or, if sooner, on the Business Day on which Seller repurchases the last Purchased Asset financed hereunder and has notified Buyer that it intends to terminate its obligations under this Agreement and the other Program Documents, Seller shall repurchase all Purchased Assets for the respective Repurchase Prices therefor, and shall pay to Buyer in full in immediately available funds, the Facility Exit Fee, which fee shall be due and payable to Buyer no later than the Business Day prior to the Termination Date.

(vi)Notwithstanding anything to the contrary herein, repurchases in whole or in part made hereunder, exclusively in connection with the repayment or prepayment in full by any Mortgator shall be permitted without regard to the existence of a Default or Event of Default hereunder.

SECTION 4.MARGIN AMOUNT MAINTENANCE

(a)If at any time after the occurrence of any event set forth in clause (b) of the definition of Market Value, Buyer has re-determined the Market Value of any Purchased Asset(s) subject to a Transaction, and the aggregate Purchase Price of all Purchased Assets exceeds the sum of the product, for all Purchased Assets, of (i) the applicable Purchase Price Percentage of each Purchased Asset and (ii) the then-current re-determined Market Value of each Purchased Asset (any such excess, a “Margin Deficit”) and such Margin Deficit is equal to or greater than the Minimum Transfer Amount, then Buyer may, by the delivery of written notice to Seller (a “Margin Call”), require Seller to, prior to the applicable Margin Deadline, at Seller’s option either (i) repurchase one or more of the Purchased Assets at their respective Repurchase Price(s), or (ii) make a payment to Buyer in reduction of the Repurchase Price of one or more of the Purchased Assets, to be applied by Buyer to reduce the unpaid Repurchase Price(s) of such Purchased Asset(s) and in such amount(s), such that, after giving effect to such repurchase or payment, all related Margin Deficit(s) shall be reduced to zero. Seller shall satisfy each Margin

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Deficit in full in the manner set forth in this Section 4(a) no later than the Initial Margin Deadline; provided that, if, on or prior to the Initial Margin Deadline, Seller has (1) paid the Initial Margin Payment Amount in cash to Buyer, and (2) Seller or Guarantor has provided evidence to Buyer reasonably satisfactory to Buyer that Guarantor has (x) sufficient capacity available on committed loan or credit facilities to satisfy the related Margin Deficit in full, and (y) Guarantor has submitted notices of borrowing under its committed loan or credit facilities in an aggregate amount sufficient to satisfy the related Margin Deficit in full, then Seller shall be permitted to pay in full the remaining balance of such Margin Deficit(s) in excess of the Initial Margin Payment Amount on or before the Extended Margin Deadline. The failure of any of Guarantor’s lenders to make any advance under any loan or credit facility shall not excuse Seller from the obligation to pay all Margin Deficit(s) in full on a timely basis, which obligations shall be absolute and unconditional notwithstanding any such failure. In making any determination that a Margin Deficit Event has occurred, Buyer shall utilize substantially similar methodologies to those that Buyer utilizes with similar-situated counterparties with similar collateral.

(b)Notice delivered pursuant to Section 4(a) of this Agreement may be given by any written or electronic means. Payment of any Margin Deficit in connection with any notice of a Margin Call shall be satisfied no later than the Initial Margin Deadline unless Seller and Guarantor satisfy the requirements set forth in the second sentence of Section 4(a), in which case only the Initial Margin Payment Amount is required to be paid on or prior to the Initial Margin Deadline and the balance of such Margin Deficit is required to be paid in full on or prior to the Extended Margin Deadline.

(c)The failure of Buyer, on any one or more occasions, to exercise its rights under this Section 4, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Buyer to do so at a later date. Seller and Buyer each agree that a failure or delay by Buyer to exercise its rights hereunder shall not limit or waive Buyer’s rights under this Agreement or otherwise existing by law or in any way create additional rights for Seller.

SECTION 5.COLLECTIONS; INCOME PAYMENTS

(a)Each of Buyer and, subject to the reasonable consent of Buyer, Seller, shall each have the option, exercisable upon the delivery of written notice to the other, to (i) establish a demand deposit account on the books and records of the Control Account Bank in the name of Buyer or as otherwise titled as approved by Buyer (the “Control Account”), which Control Account shall be subject to a Control Agreement concurrently with the establishment of the Control Account by Seller and Buyer, (ii) also concurrently with the establishment of the Control Account and the execution and delivery of the Control Agreement, cause outside counsel to Seller to deliver a legal opinion to Buyer with respect to the due execution, delivery and enforceability of the Control Agreement, together with the creation and perfection of a perfected and first-priority security interest in the Control Account in favor of Buyer, and (iii) jointly amend the Servicer Notice to update the account instructions set forth therein (collectively, the “Control Account Option”). At all times after the date of the exercise of the Control Account Option, pursuant to the Control Agreement, Buyer shall have sole control (including “control” within the meaning of the UCC) over the Control Account. The Control Account shall, at all times after the date of its establishment, be subject to the Control Agreement. Seller shall, or shall cause the Loan Servicer to, within two (2) Business Days of receipt of properly identified and available funds, deposit all Income, as well as any interest received from the reinvestment of such Income or other amounts (i) prior to the date of the exercise of the Control Account Option, directly into the bank account of Buyer as designated in a written instruction letter from Buyer to each of Seller and Loan Servicer, as such written instruction letter may be updated from time to time by Buyer, and (ii) from and after the date of the exercise of the Control Account Option, into the Control Account in accordance with the requirements of this Agreement, the applicable

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Servicing Agreement and the applicable Servicer Notice. In addition thereto, (i) at all times prior to the date of the exercise of the Control Account Option, Buyer shall then apply such Income in accordance with the applicable provisions of Sections 5(b) through 5(d) of this Agreement, and, (ii) from and after the date of the exercise of the Control Account Option, Control Account Bank shall then apply such Income in accordance with the applicable provisions of Sections 5(b) through 5(d) of this Agreement.

(b)Unless an Event of Default has occurred and is continuing, on or before 3:00 p.m. (New York time) on the Business Day prior to the Payment Date, Buyer (or its designee) shall deliver to Seller and Control Account Bank a Distribution Worksheet. So long as no Default or Event of Default shall have occurred and be continuing, on each Payment Date, as applicable, Buyer, or Control Account Bank at the direction of Buyer or its designee on behalf of Buyer, shall make the following payments of Income (other than Principal Proceeds) as set forth in the Distribution Worksheet in the following order of priority:

(i)first, (i) to Custodian for payment of the custodian fees payable to Custodian pursuant to the Custodial Agreement, and then (ii) to Buyer to pay any unpaid fees or expenses due under any Program Document, and then (iii) to Control Account Bank for payment of fees payable to Control Account Bank in connection with the Control Account;

(ii)second, to Buyer, an amount equal to the Price Differential that has accreted and is outstanding as of such Payment Date;

(iii)third, to Buyer, an amount equal to any other amounts then due and payable to Buyer under any Program Document (including any outstanding Margin Deficit, which application shall reduce the Repurchase Price of such Purchased Asset thereof by the amount so applied); and

(iv)fourth, to Seller, the remainder, if any; provided that, if any Default has occurred and is continuing on such Payment Date that has not become an Event of Default, all amounts otherwise payable to Seller hereunder shall be retained in the Control Account until the earlier of (x) the day on which Buyer provides written notice to Control Account Bank that such Default has been cured to the satisfaction of Buyer in its sole discretion and no other Default or Event of Default has occurred and is continuing, at which time Control Account Bank shall apply all such amounts pursuant to this priority fourth; and (y) the day that the related Default becomes an Event of Default, at which time Control Account Bank shall apply all such amounts pursuant to Section 5(d) of this Agreement.

(c)So long as no Event of Default shall have occurred and be continuing, any Principal Proceeds received by, as applicable, Buyer or Control Account Bank, in respect of any Purchased Asset during each Pricing Rate Period (x) in respect of (A) any scheduled or unscheduled repayment or repurchase in full of a Purchased Asset or (B) any scheduled or unscheduled repayment in part of a Purchased Asset in an amount equal to or greater than $1,000,000 shall, in each case, be remitted by Control Account Bank at the direction of Buyer or its designee on behalf of Buyer on the next Business Day following receipt in the Control Account of such Principal Proceeds in accordance with the priorities set forth below and (y) in respect of any other Principal Proceeds not described in clause (x) of this Section 5(c), shall be remitted by, as applicable, Buyer or Control Account Bank at the direction of Buyer or its designee on behalf of Buyer, on the next Payment Date following receipt in accordance with the priorities set forth below, in accordance with a Distribution Worksheet:

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(i)first, to Buyer, to reduce the Repurchase Price for such Purchased Asset, an amount equal to the product of (x) the amount of Principal Proceeds received with respect to such Purchased Asset and (y) the Purchase Price Percentage for such Purchased Asset;

(ii)second, to Buyer, an amount equal to any other amounts due and owing to Buyer or its Affiliates pursuant to Section 5(b) due on such Payment Date and remaining unpaid, and any amount due and owing to Buyer under any Program Document (including any outstanding Margin Deficits); and

(iii)third, to Seller, any remainder; provided that, if any Default has occurred and is continuing on such Payment Date that has not become an Event of Default, all amounts otherwise payable to Seller hereunder shall be retained in the Control Account until the earlier of (x) the day on which Buyer provides written notice to Control Account Bank that such Default has been cured to the satisfaction of Buyer in its sole discretion and no other Default or Event of Default has occurred and is continuing, at which time Control Account Bank shall apply all such amounts pursuant to this priority third; and (y) the day that the related Default becomes an Event of Default, at which time Control Account Bank shall apply all such amounts pursuant to Section 5(d) of this Agreement.

(d)Upon the occurrence and during the continuation of an Event of Default, all amounts remitted to the Control Account shall be held in trust for Buyer and shall be withdrawn from the Control Account only by and as directed by Buyer in accordance with Buyer’s rights under this Agreement and the Control Agreement and shall be applied to reduce all unpaid Obligations, including, without limitation the unpaid Repurchase Prices of one or more of the Purchased Assets, in each case in such amounts as determined and directed by Buyer in its sole discretion.

(e)If Buyer so requests and to the extent not otherwise reflected on the applicable Distribution Worksheet, Seller shall, or shall cause Loan Servicer to, promptly notify Buyer of each deposit in the Control Account. Seller shall also promptly deliver to Buyer photocopies of all periodic bank statements and other records relating to the Control Account as Buyer may from time to time request.

(f)Unless an Event of Default shall have occurred and be continuing, all payments received by Buyer shall, after notice to Buyer, be applied by Buyer on the date of such receipt or, if such receipt is made and notice received after 3:00 p.m. (New York time), on the following Business Day, to reduce the Purchase Price of the related Purchased Asset.

SECTION 6.REQUIREMENTS OF LAW

(a)If any Requirements of Law from any central bank or other Governmental Authority made subsequent to the date hereof:

(i)shall subject Buyer to any Tax (in each case except for (A) Taxes described in clauses (b) through (d) in the definition of Excluded Taxes, (B) Connection Income Taxes, and (C) Indemnified Taxes) on its loans, loan principal, letters of credit, commitments or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

(ii)shall impose, modify or hold applicable any reserve, special deposit, compulsory loan 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 Buyer; or

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(iii)shall impose on Buyer any other condition (other than Taxes);

and the result of any of the foregoing is to increase the cost to Buyer, by an amount which Buyer deems to be material, of entering, continuing or maintaining any Transaction or to reduce any amount due or owing hereunder in respect thereof, or shall have the effect of reducing Buyer’s rate of return then, in any such case, Seller shall promptly pay Buyer such additional amount or amounts as calculated by Buyer in good faith as will compensate Buyer for such increased cost or reduced amount receivable on an after-tax basis; provided, however, in determining whether such increased cost has occurred, Buyer shall use the same methodology that Buyer uses with other similarly situated counterparties under repurchase agreements, warehouse facilities, credit facilities and other similar arrangements for the financing of assets similar to the Purchased Assets.

(b)If Buyer shall have determined that the adoption of or any change in any Requirements of Law regarding capital adequacy or in the interpretation or application thereof or compliance by Buyer or any corporation controlling Buyer with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on Buyer’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by Buyer to be material, then from time to time, Seller shall promptly pay to Buyer such additional amount or amounts as will compensate Buyer for such reduction; provided, however, in determining whether such event has occurred, Buyer shall use the same methodology that Buyer uses with other similarly situated counterparties under repurchase agreements, warehouse facilities, credit facilities and other similar arrangements for the financing of assets similar to the Purchased Assets.

(c)Notwithstanding any other provision herein, if the adoption of or any change in any Requirements of Law or Compliance Policy or in the interpretation of any such Requirements of Law or Compliance Policy, the application thereof or the compliance therewith, in each case whether by a Governmental Authority, by Buyer or by any corporation controlling Buyer, shall make it unlawful for Buyer to enter into or maintain Transactions or Future Funding Transactions as contemplated by the Program Documents, then (i) the agreement of Buyer hereunder to consider entering into new Transactions or fund additional, Future Funding Transactions and to continue Transactions as such shall forthwith be canceled, and (ii) if such adoption or change makes it unlawful to maintain Transactions with a Pricing Rate based on One-Month LIBOR, the Transactions then outstanding shall be converted automatically to Alternative Rate Transactions on the last day of the then current Pricing Rate Period or within such earlier period as may be required by law.  If any such conversion of a Transaction occurs on a day that is not the last day of the then current Pricing Rate Period with respect to such Transaction, Seller shall pay to Buyer such amounts, if any, as may be required pursuant to Section 6(e) of this Agreement.

(d)

(i)    Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Program Document if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then, (x) if a Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, in connection with a Benchmark Transition Event, such Benchmark Replacement will replace such Benchmark for

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all purposes hereunder and under any Program Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Program Document and (y) if a Benchmark Replacement is determined in accordance with clause (3) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, or in connection with an Early Opt-in Election, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Program 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 Seller without any amendment to this Agreement or any other Program Document, or further action or consent of Seller.

(ii)    Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, Buyer 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 Program Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of Seller.

(iii)    Notices; Standards for Decisions and Determinations. Buyer will promptly notify Seller of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (iv) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by Buyer pursuant to this Section titled “Benchmark Replacement Setting,” 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 sole discretion and without consent from Seller.

(iv)    Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Program Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR or USD LIBOR) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by Buyer in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then Buyer may modify the definition of “Pricing Rate Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then Buyer may modify the definition of “Pricing Rate Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.

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(v)    Benchmark Unavailability Period. Upon Seller’s receipt of notice of the commencement of a Benchmark Unavailability Period, Seller may revoke any request for the sale to Buyer of a proposed Purchased Asset with a Pricing Rate based on LIBOR. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Alternative Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Alternative Rate

(e)If Seller repurchases Purchased Assets on a day other than the last day of a Pricing Rate Period, Seller shall indemnify Buyer and hold Buyer harmless from any actual losses, costs and/or expenses which Buyer sustains as a direct consequence thereof (“Breakage Costs”), in each case for the remainder of the applicable Pricing Rate Period. Buyer shall deliver to Seller a statement setting forth the amount and basis of determination of any Breakage Costs in reasonable detail, it being agreed that such statement and the method of its calculation shall be conclusive and binding upon Seller absent manifest error.  This Section 6(e) shall survive termination of this Agreement and the repurchase of all Purchased Assets subject to Transactions hereunder.

(f)If Buyer becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from Buyer of this Agreement and/or the other Program Documents, and any interest and obligation in or under this Agreement and/or the other Program Documents, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement and/or the other Program Documents, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

(g)If Buyer or a BHC Act Affiliate of Buyer becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement and/or the other Program Documents that may be exercised against Buyer are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement and/or the other Program Documents were governed by the laws of the United States or a state of the United States.

(h)If Buyer becomes entitled to claim any additional amounts pursuant to this Section 6, it shall promptly notify Seller of the event by reason of which it has become so entitled. A certificate of Buyer as to any additional amounts payable pursuant to this Section 6 submitted by Buyer to Seller shall be conclusive in the absence of manifest error.

(i)Each party’s obligations under this Section 6 shall survive any assignment of rights by Buyer, the termination of this Agreement and the repurchase by Seller of any or all of the Purchased Assets.

SECTION 7.TAXES.

(a)Any and all payments by or on account of any obligation of Seller under any Program Document shall be made without deduction or withholding for any Taxes, except as required by Requirements of Law. If any Requirement of Law requires the deduction or withholding of any Tax from any such payment, then Seller shall be entitled to make (or cause to be made) such deduction or withholding and shall timely pay (or cause to be timely paid) the full amount deducted or withheld to the relevant Governmental Authority in accordance with Requirements of Law and, if such Tax is an Indemnified Tax, then the sum payable by Seller shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this

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Section 7) Buyer receives an amount equal to the sum it would have received had no such deduction or withholding been made in respect of such Indemnified Taxes.

(b)Without duplication of any obligation pursuant to Section 7(a), Seller shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Requirements of Law.

(c)Without duplication of any obligation pursuant to Section 7(a) or (b), Seller shall indemnify Buyer, within ten (10) Business Days after written demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 7) payable or paid by Buyer or required to be withheld or deducted from a payment to Buyer, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate of Buyer as to the amount of such payment or liability delivered to Seller by Buyer shall be conclusive absent manifest error.

(d)As soon as practicable after any payment of Taxes by Seller to a Governmental Authority pursuant to this Section 7, Seller shall deliver to Buyer the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Buyer.

(e)(i) If Buyer is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Program Document, Buyer shall deliver to Seller, at the time or times reasonably requested by Seller, such properly completed and executed documentation reasonably requested by Seller as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, Buyer, if reasonably requested by Seller, shall deliver such other documentation prescribed by Requirements of Law or reasonably requested by Seller as will enable Seller to determine whether or not Buyer is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 7(e)(ii)(A), Section 7(e)(ii)(B) and Section 7(e)(ii)(D) below) shall not be required if in Buyer’s reasonable judgment such completion, execution or submission would subject Buyer to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of Buyer.

(ii)Without limiting the generality of the foregoing,

(A)if Buyer is a U.S. Person, it shall deliver to Seller on or prior to the date on which Buyer becomes a Party under this Agreement (and from time to time thereafter upon the reasonable request of Seller), executed copies of IRS Form W-9 certifying that Buyer is exempt from U.S. federal backup withholding tax;

(B)if Buyer is a Foreign Buyer, it shall, to the extent it is legally entitled to do so, deliver to Seller (in such number of copies as shall be requested by Seller) on or prior to the date on which Buyer becomes a Party under this Agreement (and from time to time thereafter upon the reasonable request of Seller), whichever of the following is applicable:

(1)in the case of a Foreign Buyer claiming the benefits of an income tax treaty to which the United States is a party, (x) with respect to payments of interest under any Program Document, executed copies of

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IRS Form W-8BEN or IRS Form W-8BEN-E (as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Program Document, IRS Form W-8BEN or IRS Form W-8BEN-E (as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2)executed copies of IRS Form W-8ECI;

(3)in the case of a Foreign Buyer claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that such Foreign Buyer is not a “bank” within the meaning of section 881(c)(3)(A) of the Code, a “10 percent shareholder” of Seller within the meaning of section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E (as applicable); or

(4)to the extent a Foreign Buyer is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate or IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Buyer is a partnership and one or more direct or indirect partners of such Foreign Buyer are claiming the portfolio interest exemption, such Foreign Buyer may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner;

(C)if Buyer is a Foreign Buyer, it shall, to the extent it is legally entitled to do so, deliver to Seller (in such number of copies as shall be requested by Seller) on or prior to the date on which Buyer becomes a Party under this Agreement (and from time to time thereafter upon the reasonable request of Seller), executed copies of any other form prescribed by Requirements of Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Requirements of Law to permit Seller to determine the withholding or deduction required to be made; and

(D)if a payment made to Buyer under any Program Document would be subject to U.S. federal withholding Tax imposed by FATCA if Buyer 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), Buyer shall deliver to Seller at the time or times prescribed by law and at such time or times reasonably requested by Seller such documentation prescribed by Requirements of Law (including as prescribed by section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Seller as may be necessary for Seller to comply with its obligations under FATCA and to determine that Buyer has complied with Buyer’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include all amendments made to FATCA after the date of this Agreement.

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Buyer 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 Seller in writing of its legal inability to do so.

(f)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 7 (including by the payment of additional amounts pursuant to this Section 7), it shall promptly pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 7 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 Section 7(f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) if such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 7(f), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 7(f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This Section 7(f) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(g)Each party’s obligations under this Section 7 shall survive any assignment of rights by Buyer, the termination of this Agreement and the repurchase by Seller of any or all of the Purchased Assets.

(h)If Buyer requests compensation under Section 6, or requires the Seller to pay any Indemnified Taxes or additional amounts to Buyer or any Governmental Authority for the account of Buyer pursuant to Section 7, then Buyer shall (at the request of the Seller) use reasonable efforts to designate a different office from which it books the Transactions or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of Buyer, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 6 or 7, as the case may be, in the future, and (ii) would not subject Buyer to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Buyer. The Seller hereby agrees to pay all reasonable costs and expenses incurred by Buyer in connection with any such designation or assignment.

(i)If Buyer requests compensation under Section 6, or if the Seller is required to pay any Indemnified Taxes or additional amounts to Buyer or any Governmental Authority for the account of Buyer pursuant to Section 7 and, in each case, Buyer has declined or is unable to designate a different office from which it books the Transactions in accordance with Section 7(h), or if Buyer is a Defaulting Party, then the Seller may, at its sole expense and effort, upon notice to Buyer, require Buyer to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 18), all of its interests, rights (other than its existing rights to payments pursuant to Section 6 or Section 7) and obligations under this Agreement and the related Program Documents to an eligible assignee that shall assume such obligations (which assignee may be another Buyer, if a Buyer accepts such assignment); provided that:

(i)    Buyer shall have received payment of an amount equal to the outstanding principal of its Obligations, accrued interest thereon, accrued fees and all other

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amounts payable to it hereunder and under the other Program Documents from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Seller (in the case of all other amounts);

(ii)    in the case of any such assignment resulting from a claim for compensation under Section 6 or payments required to be made pursuant to Section 7, such assignment will result in a reduction in such compensation or payments thereafter; and

(iii)    such assignment does not conflict with applicable law.

Buyer shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Buyer or otherwise, the circumstances entitling the Seller to require such assignment and delegation cease to apply.

SECTION 8.SECURITY INTEREST; BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT

(a)The parties intend that all Transactions hereunder be sales and purchases and not loans (other than as set forth in Section 21 of this Agreement for U.S. tax purposes). However, in order to protect Buyer’s rights with respect to the Purchased Assets and the Program Documents if any such Transactions are nevertheless deemed by a court or Governmental Authority to be loans, and as security for the performance by Seller of all of its Obligations, Seller hereby pledges to Buyer as security for the performance by Seller of its Obligations and hereby grants, assigns and pledges to Buyer a fully perfected first priority security interest in the Purchased Assets (including all Servicing Rights related to such Purchased Assets); the Records related to the Purchased Assets; the Program Documents (to the extent such Program Documents and Seller’s right thereunder relate to the Purchased Assets); any Property relating to any Purchased Asset; any escrow letter or settlement agreement relating to any Purchased Asset; all insurance policies and insurance proceeds relating to any property related to any Purchased Asset, including but not limited to any payments or proceeds under any related hazard insurance; the Control Account; any Hedge Agreements relating to any Purchased Asset; any accounts, instruments (including promissory notes), chattel paper (including electronic chattel paper), contract rights and other general intangibles (including payment intangibles), payments, rights to payment (including payments of interest or finance charges), goods (including equipment and inventory), software, deposit accounts, investment property (including securities, securities accounts and security entitlements) and documents, to the extent that the foregoing relates to any Purchased Asset; and any other assets relating to the Purchased Assets (including, without limitation, any other accounts and Income relating thereto) or any interest in the Purchased Assets; distributions with respect to any of the foregoing; together with all accessions and additions thereto; substitutions and replacements therefor; and all products and proceeds; in all instances, whether now owned or hereafter acquired, now existing or hereafter created and wherever located (collectively, the “Repurchase Assets”). Buyer shall have all of the rights and remedies provided to a secured party by any Requirements of Law (including the rights and remedies of a secured party under the UCC and the right to set off any mutual debt and claim) and under any other agreement between Buyer and Seller or any of its Affiliates, and without limiting the generality of the foregoing, Buyer shall be entitled to set off the proceeds of the liquidation of the Purchased Assets against all of the Obligations, without prejudice to Buyer’s right to recover any deficiency. The possession by Buyer or any of its agents, including Custodian, of the Purchased Asset Documents, the Purchased Assets and such other items of property as constitute instruments, money, negotiable documents, securities or chattel paper shall be deemed to be possession by the secured party for purposes of perfecting such security interest under the UCC and Requirements of Law. Notifications to Persons (other than Buyer) holding such property, and acknowledgments, receipts or confirmations from Persons (other than Buyer)

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holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, securities intermediaries, bailees or agents (as applicable) of the secured party for the purpose of perfecting such security interest under the UCC and Requirements of Law. The security interest of Buyer granted herein shall be, and Seller hereby represents and warrants to Buyer that it is, a first priority perfected security interest. For the avoidance of doubt, (i) each Purchased Asset secures the Obligations of Seller with respect to all other Transactions and all other Purchased Assets, including any Purchased Assets that are junior in priority to the Purchased Asset in question, and (ii) if an Event of Default exists, no Purchased Asset will be released from Buyer’s security interest or transferred to Seller until the Obligations are indefeasibly paid in full. Notwithstanding the foregoing, the Obligations shall be full recourse to Seller.

(b)Seller acknowledges that it has sold the Purchased Assets to Buyer on a servicing released basis and it has no rights to service the Purchased Assets. Without limiting the generality of the foregoing and if Seller is deemed to retain any residual Servicing Rights, and for the avoidance of doubt, Seller grants, assigns and pledges to Buyer a security interest in the Servicing Rights and proceeds related thereto and in all instances, whether now owned or hereafter acquired, now existing or hereafter created and wherever located. The foregoing provision and the provisions of Section 8(a) of this Agreement are intended to constitute a security agreement or other arrangement or other credit enhancement related to this Agreement and Transactions hereunder as defined under Sections 101(47)(v) and 741(7)(xi) of the Bankruptcy Code.

(c)Seller agrees to execute a Power of Attorney, substantially in the form of Exhibit C to this Agreement (the “Power of Attorney”), to be delivered on the date hereof.

(d)Seller Party hereby authorizes Buyer to file such financing statement or statements relating to the Repurchase Assets (including financing statements describing the collateral as “all assets” or similar description) as Buyer, at its option, may deem appropriate. Seller shall pay the searching and filing costs for any financing statement or statements prepared or searched pursuant to this Agreement.

(e)Buyer and Seller agree that the grant of a security interest under this Section 8 shall not constitute or result in the creation or assumption by Buyer of any other obligation of Seller or any other Person in connection with any Purchased Asset, or any Hedge Agreement whether or not Buyer exercises any right with respect thereto. Seller shall remain liable under the Purchased Assets, and the Purchased Asset Documents to perform all of Seller’s duties and obligations thereunder to the same extent as if the Program Documents had not been executed.

(f)Seller agrees, to the extent permitted by Requirements of Law, that neither it nor anyone claiming through or under it will set up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption law now or hereafter in force in any locality where any Purchased Assets may be situated in order to prevent, hinder or delay the enforcement or foreclosure of this Agreement, or the absolute sale of any of the Purchased Assets or any Hedge Agreement relating to a Purchased Asset or any part thereof, or the final and absolute putting into possession thereof, immediately after such sale, of the purchasers thereof, and Seller, for itself and all who may at any time claim through or under it, hereby waives, to the full extent that it may be lawful so to do, the benefit of all such laws and any and all right to have any of the properties or assets constituting the Purchased Assets marshaled upon any such sale, and agrees that Buyer or any court having jurisdiction to foreclose the security interests granted in this Agreement may sell the Purchased Assets as an entirety or in such parcels as Buyer or such court may determine.

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SECTION 9.PAYMENT, TRANSFER; ACCOUNTS

(a)Payments and Transfers of Funds. Except in accordance with Section 9(c) below, unless otherwise mutually agreed in writing, all transfers of funds to be made by Seller to Buyer hereunder shall be made in Dollars, in immediately available funds, without deduction, set off or counterclaim, to Buyer at the following account maintained by Buyer, on the date on which such payment shall become due: Account No. 101WA 786 801 001, ABA No.: 026 007 993, Name of Bank: UBS AG, Stamford, CT, Account Name: UBS AG, 1285 Branch, Reference: UBS-Terra CREW Facility.

(b)Remittance of Purchase Price. On the Purchase Date for each Transaction, ownership of the Purchased Assets on a servicing-released basis shall be transferred to Buyer or its designee against the simultaneous transfer of the Purchase Price to Seller at such account designated by Seller in writing. With respect to the Purchased Assets being sold by Seller on a Purchase Date, Seller hereby sells, transfers, conveys and assigns to Buyer or its designee without recourse, but subject to the terms of this Agreement, all the right, title and interest of Seller in and to the Purchased Assets together with all right, title and interest in and to the proceeds of any related Repurchase Assets. All transfers of cash and assets shall be made in accordance with this Agreement. The Servicing Rights and other servicing provisions under this Agreement are not severable from or to be separated from the Purchased Assets under this Agreement; and, such Servicing Rights and other servicing provisions of this Agreement constitute (i) “related terms” under this Agreement within the meaning of Section 101(47)(A)(i) of the Bankruptcy Code and/or (ii) a security agreement or other arrangement or other credit enhancement related to the Program Documents.

(c)Fees. Seller shall pay in immediately available funds to Buyer all fees as and when required hereunder. All such payments shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Buyer at such account designated by Buyer.

(d)Revocable Option to Direct Servicing. Buyer hereby grants to Seller a revocable option to direct Buyer with respect to the exercise of all voting and corporate rights with respect to the Purchased Assets (each, a “Revocable Option”) and to vote, take corporate actions and exercise any rights in connection with the Purchased Assets, so long as no Default or Event of Default has occurred and is continuing, but subject to all of Buyer’s rights hereunder, including but not limited to, Buyer’s right to consent to Material Actions. Such Revocable Option is not evidence of any ownership or other interest or right of Seller in any Purchased Asset and Seller confirms that, notwithstanding Seller’s exercise of the Revocable Option, Buyer retains ownership of the Purchased Assets on a servicing released basis. Upon the occurrence and during the continuation of a Default or Event of Default, the Revocable Option discussed above shall terminate automatically and without further notice or action by Buyer and Buyer shall immediately be entitled to exercise all voting and corporate rights with respect to the Purchased Assets without regard to Seller’s instructions (including, but not limited to, if an Insolvency Event shall occur with respect to Seller) and Buyer shall have the right to terminate any servicing arrangement with respect to any or all Purchased Assets and transfer any or all of the servicing of any or all Purchased Assets to any servicer in Buyer’s sole discretion.

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SECTION 10.SINGLE-PURPOSE ENTITY

Seller hereby represents and warrants to Buyer, and covenants with Buyer, that, at all times from and after the date of its formation and through and including the Closing Date, and so long as this Agreement or any of the other Program Documents shall remain in effect:

Seller shall (i) own no assets, other than the Purchased Assets and rights ancillary thereto subject to the sale to Buyer hereunder and shall not engage in any business, other than the origination, acquisition, ownership, sale, administration, financing, repurchase and disposition of the Purchased Assets in accordance with this Agreement and the other Program Documents; (ii) not incur any Indebtedness or other obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (I) with respect to the Purchased Asset Documents, (II) commitments to make loans which may become Eligible Assets, (III) unsecured trade payables incurred in the ordinary course of its business as described above, and (IV) as otherwise permitted under this Agreement; (iii) not make any loans or advances to any Affiliate or any other Person and shall not acquire obligations or securities of its Affiliates, in each case other than in connection with the origination or acquisition of Assets for purchase and sale to Buyer under the Program Documents; (iv) remain Solvent and pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) only from its own assets, provided, however, that nothing contained in this Section 10 or otherwise in this Agreement shall require any direct or indirect owners of Seller to make any additional capital contributions to Seller; (v) comply in all material respects with the provisions of its Governing Documents; (vi) do all things necessary to observe organizational formalities and to preserve its separate existence, and shall not amend, modify, waive provisions of or otherwise change its Governing Documents with respect to the matters set forth in this Section 10; (vii) maintain all of its books, records and bank accounts separate from those of any other Person; (viii) maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that Seller’s assets may be included in a consolidated financial statement of its Affiliate provided that (I) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Seller from such Affiliate and to indicate that Seller’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (II) such assets shall also be listed on Seller’s own separate balance sheet; (ix) file its own tax returns separate from those of any other Person, except to the extent that Seller is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under Requirements of Law; (x) be, and at all times shall hold itself out to the public as, a legal entity separate and distinct from any other entity, shall use commercially reasonable efforts to correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, and shall not identify itself or any of its Affiliates as a division of the other; (xi) maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; provided, however, that nothing contained in this Section 10 or otherwise in this Agreement shall require any direct or indirect owners of Seller to make any additional capital contributions to Seller; (xii) to the fullest extent permitted by law, not engage in or suffer any Change in Control, dissolution, winding up, liquidation, consolidation or merger in whole or in part or convey or transfer all or substantially all of its properties and assets to any Person (except as contemplated herein), nor shall Seller adopt, file, or effect a Division; (xiii) not commingle its funds or other assets with those of any Affiliate or any other Person; (xiv) maintain its properties, assets and accounts separate from those of any Affiliate or any other Person, (xv) not guarantee any obligation of any Person, including any Affiliate, become obligated for the debts of any other Person, or hold out its credit or assets as being available pay the obligations of any other Person, (xvi) not, without the prior unanimous written consent of all of its Independent Directors or Independent Managers, take any Material Action, (xvii) (I) have at all times at least one (1) Independent Director or Independent Manager whose vote is required to take any Material

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Action, and (II) provide Buyer with up-to-date contact information for each such Independent Director or Independent Manager and a copy of the agreement pursuant to which such Independent Director or Independent Manager consents to and serves as an “Independent Director” or “Independent Manager” for Seller; (xviii) have Governing Documents that provide that for so long as any Obligations remain outstanding, (I) the Independent Manager or Independent Director may be removed only for Cause, (II) that Buyer be given at least two (2) Business Days prior notice of the removal and/or replacement of any Independent Director or Independent Manager, together with the name and contact information of the replacement Independent Director or Independent Manager and evidence of the replacement’s satisfaction of the definition of Independent Director or Independent Manager, (III) that, to the fullest extent permitted by law, and notwithstanding any duty otherwise existing at law or in equity, any Independent Director or Independent Manager shall consider only the interests of Seller, including its respective creditors, in acting or otherwise voting on the Material Action, and (IV) that, except for duties to Seller as set forth in the immediately preceding clause (including duties to the holders of the Equity Interests in Seller or Seller’s respective creditors solely to the extent of their respective economic interests in Seller, but excluding (A) all other interests of the holders of the Equity Interests in Seller, (B) the interests of other Affiliates of Seller, and (C) the interests of any group of Affiliates of which Seller is a part), the Independent Directors or Independent Managers shall not have any fiduciary duties to the holders of the Equity Interests in Seller, any officer or any other Person bound by the Governing Documents; provided, however, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing; (xix) except for capital contributions or capital distributions permitted under the terms and conditions of its Governing Documents and properly reflected on the books and records of Seller, not enter into any transaction with an Affiliate of Seller except on commercially reasonable terms similar to those available to unaffiliated parties in an arm’s-length transaction; (xx) have and maintain a sufficient number of employees, if any, in light of contemplated business operations and pay the salaries of its own employees, if any, only from its own funds; (xxi) use separate stationary, invoices and checks bearing its own name; (xxii) allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including for shared office space and for services performed by an employee of an Affiliate; (xxiii) not pledge its assets to secure the obligations of any other Person other than in accordance with the Program Documents; (xxiv) not form, acquire or hold any Subsidiary or own any Equity Interest in any other entity or make any investment in any Person , (xxv) maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any of its Affiliates or any other Person; (xxvi) not have its obligations Guaranteed by any other person other than as contemplated by the Guarantee and the Pledge Agreement; and (xxvii) have no liabilities, contingent or otherwise, other than (I) in connection with the origination, acquisition, ownership, administration, hedging, financing, securitizing and disposition of the Purchased Assets, (II) its obligations under the Program Documents, and (III) its obligations under the documents evidencing the Purchased Assets. Seller has complied with the covenants set forth in this Section 10 since the date of its formation.

SECTION 11.REPRESENTATIONS AND WARRANTIES

Except as otherwise expressly provided below, Seller represents and warrants to Buyer that as of the Purchase Date for any Purchased Assets and as of the date of this Agreement and any Transaction hereunder and on each date while the Program Documents are in full force and effect and/or any Transaction hereunder is outstanding:

(a)Acting as Principal. Seller will engage in such Transactions as principal (or, if agreed in writing in advance of any Transaction by the other party hereto, as agent for a disclosed principal).

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(b)No Broker. Except as disclosed in writing to Buyer by Seller prior of the Purchase Date for the related Transaction, Seller has not dealt with any broker, investment banker, agent, or other Person, except for Buyer, who may be entitled to any commission or compensation in connection with the sale of Purchased Assets pursuant to this Agreement.

(c)Financial Statements. Guarantor has heretofore furnished to Buyer a copy, certified by its president, chief financial officer, treasurer or a vice president of its (a) Financial Statements for the fiscal year ended December 31, 2020 and for the fiscal quarters ended March 31, 2021 and June 30, 2021, with an unqualified opinion thereon of an Approved CPA and (b) Financial Statements for Guarantor for such quarterly period(s). All such Financial Statements are complete and correct and fairly present, in all respects, the consolidated and consolidating financial condition of each Seller Party and the consolidated and consolidating results of its operations as at such dates and for such monthly periods, all in accordance with GAAP. Since the Annual Financial Statement Date, there has been no material adverse change in the consolidated business, operations or financial condition of Guarantor from that set forth in said Financial Statements nor is Seller or Guarantor aware of any state of facts which (without notice or the lapse of time) would or could be reasonably likely to result in any such material adverse change or could have a Material Adverse Effect. Neither Seller nor Guarantor has, on the Annual Financial Statement Date, any liabilities, direct or indirect, fixed or contingent, matured or unmatured, known or unknown, or liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against in, said balance sheet and related statements, and at the present time there are no unrealized or anticipated losses from any loans, advances or other commitments of either Seller or Guarantor except as heretofore disclosed promptly to Buyer in writing.

(d)Organization, Etc. Each Seller Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Seller Party (a) has all requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect; (b) is qualified to do business and is in good standing in all other jurisdictions in which the nature of the business conducted by it makes such qualification necessary, except where failure so to qualify would not be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect; and (c) has full power and authority to execute, deliver and perform its obligations under the Program Documents.

(e)Authorization, Compliance, Approvals. The execution and delivery of, and the performance by each Seller Party of its obligations under, the Program Documents to which it is a party (a) are within such Seller Party’s powers, (b) have been duly authorized by all requisite action, (c) do not violate any provision of applicable law, rule or regulation, or any order, writ, injunction or decree of any court or other Governmental Authority, or its organizational documents, (d) do not violate any indenture, agreement, document or instrument to which such Seller Party or any of its Subsidiaries is a party, or by which any of them or any of their properties, any of the Repurchase Assets is bound or to which any of them is subject to the extent such conflict or breach would have a Material Adverse Effect, and (e) are not in conflict with, do not result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or except as may be provided by any Program Document, result in the creation or imposition of any Lien (except for any Liens created pursuant to the Program Documents) upon any of the property or assets of such Seller Party or any of its Subsidiaries pursuant to, any such indenture, agreement, document or instrument to the extent that such creation or imposition would have a Material Adverse Effect. No Seller Party is required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any Governmental Authority in connection with or as a condition to the consummation of the Transactions

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contemplated herein and the execution, delivery or performance of the Program Documents to which it is a party.

(f)Litigation. There are no actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or, to the best of Seller Parties’ knowledge, threatened) or other legal or arbitrable proceedings affecting any Seller Party or any of its respective Subsidiaries or affecting any of the Repurchase Assets or any of the other properties of such Seller Party before any Governmental Authority which (i) could reasonably be expected to have an adverse and material effect on the validity or enforceability of the Program Documents or any material action to be taken in connection with the transactions contemplated hereby, or makes a claim or claims against the Seller in an amount greater than $250,000 or against the Guarantor in an aggregate amount greater than the Litigation Threshold, (ii) individually or in the aggregate, if adversely determined, would be reasonably likely to have a Material Adverse Effect, or (iii) requires a filing by any Seller Party with the SEC.

(g)Purchased Assets.

(i)Seller has not assigned, pledged, or otherwise conveyed or encumbered any Purchased Asset to any other Person other than in accordance with this Agreement, and immediately prior to the sale of such Purchased Asset to Buyer, Seller was the sole owner of such Purchased Asset 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 sale to Buyer hereunder or created in favor of Buyer hereunder.

(ii)The provisions of this Agreement are effective to either constitute a sale of Purchased Assets to Buyer or to create in favor of Buyer a valid first priority security interest in all right, title and interest of Seller in, to and under the Repurchase Assets.

(iii)Each Purchased Asset is an Eligible Asset. Each representation and warranty of Seller set forth in the Program Documents are true and correct. Each representation and warranty set forth in Schedule 1 and set forth in the Purchased Asset Documents with respect to each Purchased Asset, are true and correct as of the related Purchase Date for such Purchased Asset except as otherwise disclosed in writing on the related Transaction Request and Confirmation or in an Approved Exceptions Report delivered prior to the Purchase Date. Seller has no knowledge of any fact that could reasonably lead it to expect that any Purchased Asset will not be paid in full. No Purchased Asset is or has been the subject of any compromise, adjustment, extension, satisfaction, subordination, rescission, setoff, counterclaim, defense, abatement, suspension, deferment, deduction, reduction, termination or modification, whether arising out of transactions concerning such Purchased Asset or otherwise, by Seller or any Affiliate of Seller, any Transferor, any Mortgagor, Guarantor or any other Person. The purchase of each proposed Purchased Asset was underwritten in accordance with and satisfies applicable standards established by Seller and Guarantor. None of the Purchased Asset Documents has any marks or notations indicating that it has been sold, assigned, pledged, encumbered or otherwise conveyed to any Person other than Buyer. If any Purchased Asset Document requires the holder or transferee of the related Purchased Asset to be a qualified transferee, qualified institutional lender or qualified lender (however defined), Seller meets such requirement. Assuming that Buyer also meets such requirement, the assignment and pledge of such Purchased Asset to Buyer pursuant to the Program Documents do not violate such Purchased Asset Document. Seller and any other Person that at any time has any or had ownership interest in any of the Servicing Rights related to any of the Purchased Assets have each sold and transferred all Servicing Rights with respect to the Purchased Assets to Buyer.

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(h)Proper Names; Chief Executive Office/Jurisdiction of Organization. Seller does not operate in any jurisdiction under a trade name, division name or name other than those names previously disclosed in writing by Seller to Buyer. Each of Seller’s and Pledgor’s jurisdiction of organization, type of organization and organizational identification number as of the date hereof is as set forth in the Pricing Letter. Guarantor’s jurisdiction of organization, type of organization and organizational identification number as of the date hereof is as set forth in the Pricing Letter. Seller’s exact legal name as of the date hereof is set forth in the preamble and signature pages of this Agreement. Seller’s location (within the meaning of Article 9 of the UCC), chief executive office and the office where Seller keeps all records (within the meaning of Article 9 of the UCC) relating to the Purchased Assets as of the date hereof is at the address of Seller referred to in the Pricing Letter. Seller has not changed its name or location within the past twelve (12) months. Seller and Pledgor shall provide Buyer with thirty (30) days advance notice of any change in its principal office or place of business or jurisdiction. During the five (5) years preceding the date of this Agreement, neither Seller nor Pledgor has been known by or done business under any other name, corporate or fictitious, and neither Seller nor Pledgor have filed or had filed against it any bankruptcy receivership or similar petitions or made any assignments for the benefit of creditors. Seller is a one hundred percent (100%) direct and wholly-owned Subsidiary of Pledgor. The fiscal year of Seller is the calendar year. Seller has not entered into any Guarantees. Seller has no Subsidiaries.

(i)Location of Books and Records. The location where Seller keeps its books and records, including all computer tapes, computer systems and storage media and records related to the Repurchase Assets to the extent not held by another party pursuant to the Program Documents is its chief executive office or as otherwise disclosed in writing to Buyer.

(j)Enforceability. This Agreement and all of the other Program Documents executed and delivered by each Seller Party in connection herewith are legal, valid and binding obligations of such Seller Party and are enforceable against such Seller Party in accordance with their terms except as such enforceability may be limited by (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar Requirements of Law affecting creditors’ rights generally and (ii) general principles of equity.

(k)Ability to Perform. No Seller Party believes, nor does such Seller Party have any reason or cause to believe, that it cannot perform each and every covenant contained in the Program Documents to which it is a party on its part to be performed.

(l)No Default. No Default or Event of Default has occurred and is continuing with respect to Program Documents. No default or event of default (however defined) exists under any Indebtedness, Guarantee Obligations or contractual obligations of Seller that would reasonably be expected to have a Material Adverse Effect. Seller reasonably expects that it is and will be able to pay and perform each agreement, duty, obligation and covenant contained in the Program Documents and Purchased Asset Documents to which it is a party, and that it is not subject to any agreement, obligation, restriction or Requirements of Law that would unduly burden its ability to do so or could reasonably be expected to have a Material Adverse Effect. Seller has no knowledge of any actual or prospective development, event or other fact that could reasonably be expected to have a Material Adverse Effect. Seller has delivered to Buyer all underlying servicing agreements (or provided Buyer with access to a service, internet website or other system where Buyer can successfully access such agreements) with respect to the Purchased Assets, and to Seller’s knowledge no material default or event of default (however defined) exists thereunder.

(m)No Adverse Selection. Seller has not selected the Purchased Assets in a manner so as to adversely affect Buyer’s interests.

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(n)Scheduled Indebtedness. All Indebtedness of each Seller Party which is in effect and/or outstanding as of the date of this Agreement is listed on Schedule 3 hereto (the “Scheduled Indebtedness”) and no material defaults or events of default exist thereunder.

(o)Accurate and Complete Disclosure. The reports, Financial Statements, exhibits and schedules furnished in writing by or on behalf of each Seller Party to Buyer in connection with the negotiation, preparation or delivery of this Agreement or performance hereof and the other Program Documents or included herein or therein or delivered pursuant hereto or thereto, 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. All written information furnished after the date hereof by or on behalf of each Seller Party to Buyer in connection with this Agreement and the other Program Documents and the transactions contemplated hereby and thereby will be true, complete and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified. There is no fact known to Seller after due inquiry, that could reasonably be expected to have a Material Adverse Effect that has not been disclosed herein, in the other Program Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to Buyer for use in connection with the transactions contemplated hereby or thereby.

(p)Margin Regulations. The use of all funds acquired by Seller 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. The proceeds of the Transaction will not be used by Seller for the purpose of buying or carrying, and will not be secured directly or indirectly by, “margin stock” as such term is defined in Regulation U 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.

(q)Investment Company. Neither Seller nor any direct or indirect Subsidiary of Guarantor that is also a direct or indirect parent of Seller is required to be registered as, or is Controlled by, an “investment company”, within the meaning of the Investment Company Act, or is otherwise required to register thereunder. Seller is exempt from the registration requirements of the Investment Company Act pursuant to an exemption other than the exemptions set forth in Section 3(c)(1) and 3(c)(7) of the Investment Company Act.

(r)Solvency/Liens. Except as disclosed in writing to Buyer prior to the Closing Date, no Seller Party or any of their respective Affiliates is or has ever been the subject of an Insolvency Proceeding. Each Seller Party and each of their respective Affiliates is Solvent and the Transactions do not and will not render any Seller Party or any of their respective Affiliates not Solvent. Seller is not entering into the Program Documents or any Transaction with the intent to hinder, delay or defraud any creditor of any Seller Party or any of their respective Affiliates. Seller reasonably believes that it has received or will receive reasonably equivalent value for the Program Documents and each Transaction. Seller has adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations. Seller is generally able to pay, and as of the date hereof is paying, its debts as they come due. Except as disclosed in writing to Buyer, no Seller Party has made any assignments for the benefit of creditors.

(s)ERISA. From the fifth fiscal year preceding the current year through the termination of this Agreement (the “Reporting Period”), with respect to any pension or benefit plan maintained by Seller Party or any ERISA Affiliate, or to which Seller Party or any ERISA Affiliate contributes or has contributed (each, a “Plan”), the benefits under which Plan are guaranteed, in whole or in part, by the PBGC, and, except as would not have a Material Adverse

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Effect, (i) Seller Party and each ERISA Affiliate has funded and will continue to fund each Plan as required by the provisions of Section 412 of the Code; (ii) Seller Party and each ERISA Affiliate has caused and will continue to cause each Plan to pay all benefits when due; (iii) neither Seller Party nor any ERISA Affiliate has been or is obligated to contribute to any multiemployer plan as defined in Section 3(37) of ERISA; (iv) Seller Party (on behalf of ERISA Affiliate, if applicable) will provide to Buyer (A) no later than the date of submission to the PBGC, a copy of any notice of a Plan’s termination (B) no later than the date of submission to the Department of Labor or to the Internal Revenue Service, as the case may be, a copy of any request for waiver from the funding standards or extension of the amortization periods required by Section 412 of the Code and (C) notice of any Reportable Event as such term is defined in ERISA (and has, prior to the date of this Agreement, provided to Buyer a copy of any document described in clauses (iv)(A), (B) or (C) relating to any date in the Reporting Period prior to the date of this Agreement); and (v) Seller Party and each ERISA Affiliate will subscribe from the date of this Agreement to the termination of this Agreement to any contingent liability insurance provided by the PBGC to protect against employer liability upon termination of a guaranteed pension plan, if available to Seller Party or ERISA Affiliate, as applicable.

(t)Taxes.

(i)Each Seller Party and its respective Subsidiaries have timely filed all income, franchise and other material Tax returns that are required to be filed by them and have timely paid all Taxes due and payable by them or imposed with respect to any of their property and all other material fees and other charges imposed on them or any of their property by any Governmental Authority, except for any such Taxes the amount or validity of which is currently being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided in accordance with GAAP.

(ii)There are no Liens for Taxes with respect to any assets of any Seller Party or its Subsidiaries, and no claim is being asserted with respect to Taxes of any Seller Party or its Subsidiaries, except for statutory Liens for Taxes not yet due and payable or for Taxes the amount or validity of which is currently being contested in good faith by appropriate proceedings diligently conducted and, in each case, with respect to which adequate reserves have been provided in accordance with GAAP.

(iii)Seller will be treated as a disregarded entity for U.S. federal income tax purposes.

(u)No Reliance. Each Seller Party has made its own independent decisions to enter into the Program Documents and each Transaction and as to whether such Transaction 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. No Seller Party is relying upon any advice from Buyer as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.

(v)Plan Assets. None of Seller, Pledgor, Guarantor or Manager is, or during the term of this Agreement will become, (i) an “employee benefit plan” as defined in Section 3(3) of ERISA that is subject to Title I of ERISA, a “plan” described in Section 4975(e)(1) of the Code that is subject to Section 4975 of the Code, or an entity deemed to hold “plan assets” within the meaning of 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA, and (ii) either (x) such Seller Party is not and will not be subject to any state or local statute regulating investments of, or fiduciary obligations with respect to, governmental plans within the meaning of Section 3(32) of ERISA (“Similar Law”) or (y) such Seller Party’s execution, delivery, and performance

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of this Agreement and the other Program Documents and the consummation of the transactions contemplated hereunder and thereunder do not and will not violate any applicable Similar Law.

(w)[reserved].

(x)Anti-Money Laundering Laws. Each Seller Party has complied with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 (collectively, the “Anti-Money Laundering Laws”); each Seller Party has established an anti-money laundering compliance program as required by the Anti-Money Laundering Laws, has conducted the requisite due diligence in connection with the origination of each Purchased Asset for purposes of the Anti-Money Laundering Laws, including with respect to the legitimacy of the applicable Mortgagor and the origin of the assets used by the said Mortgagor to purchase the property in question, and maintains, and will maintain, sufficient information to identify the applicable Mortgagor for purposes of the Anti-Money Laundering Laws.

(y)Sanctions and Anti-Corruption Laws. No Seller Party, no Subsidiary of any Seller Party and, to the knowledge of any Seller Party, no director, officer, employee, agent or Affiliate of any Seller Party or any Subsidiary of a Seller Party is a Sanctioned Person. Each Seller Party, their respective Subsidiaries and each of their respective directors, officers and employees and, to the knowledge of any Seller Party, the agents of each Seller Party and each of their respective Subsidiaries, are in compliance with all applicable Sanctions and Anti-Corruption Laws, in each case in all material respects. Each Seller Party and each of their respective Subsidiaries have instituted, or remain subject to, policies and procedures reasonably designed to ensure compliance with applicable Sanctions and Anti-Corruption Laws.

(z)Program Documents. Each Program Document to which Seller is a party has been duly executed and delivered by Seller and constitutes the legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms, except as such enforceability may be limited by Insolvency Laws and general principles of equity. The execution, delivery and performance by Seller of each Program Document to which it is a party do not and will not (a) conflict with, result in a breach of, or constitute (with or without notice or lapse of time or both) a default under, any (i) Governing Document, Indebtedness, Guarantee Obligation or contractual obligation applicable to Seller or any of its properties or assets, (ii) Requirements of Law, or (iii) approval, consent, judgment, decree, order or demand of any Governmental Authority, or (b) result in the creation of any Lien (other than, except with respect to any Purchased Asset, any Liens granted pursuant to a Program Document) on any of the properties or assets of Seller, in the case of (a) to the extent which would reasonably be expected to have a Material Adverse Effect on Seller to perform its obligations hereunder. All approvals, authorizations, consents, orders, filings, notices or other actions of any Person or Governmental Authority required for the execution, delivery and performance by Seller of the Program Documents to which it is a party and the sale of and grant of a security interest in each Purchased Asset to Buyer, have been obtained, effected, waived or given and are in full force and effect. The execution, delivery and performance of the Program Documents do not require compliance by Seller with any “bulk sales” or similar law. There is no material litigation, proceeding or investigation pending or, to the knowledge of Seller threatened, against any Seller Party or any of their respective Affiliates before any Governmental Authority (a) asserting the invalidity of any Program Document, (b) seeking to prevent the consummation of any Transaction, or (c) seeking any determination or ruling that could reasonably be expected to have a Material Adverse Effect.

(aa)Compliance with Laws. Each Seller Party and each of their respective Affiliates have complied in all material respects with all Requirements of Law, and no Purchased Asset contravenes any Requirements of Laws. Neither Seller nor any Affiliate of Seller (a) is a “broker” or “dealer” as defined in, or could be subject to a liquidation proceeding under, the

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Securities Investor Protection Act of 1970, and (b) is not subject to regulation by any Governmental Authority limiting its ability to incur the Obligations.

(ab)Purchased Assets Acquired from Transferors. With respect to each Purchased Asset purchased by Seller or an Affiliate of Seller from a Transferor, (a) such Purchased Asset was acquired and transferred pursuant to a Purchase Agreement, (b) such Transferor received reasonably equivalent value in consideration for the transfer of such Purchased Asset, (c) no such transfer was made for or on account of an antecedent debt owed by such Transferor to Seller or an Affiliate of Seller, (d) no such transfer is or may be voidable or subject to avoidance under the Bankruptcy Code, (e) if Seller acquired the Purchased Asset from an Affiliate, Seller has delivered to Buyer an executed copy of a Contribution and Sale Agreement, prepared based off of the form attached as Exhibit K hereto, which shall also be in form and substance reasonably satisfactory to a commercially reasonable institutional purchaser of assets similar to Purchased Assets, and (f) the representations and warranties made by such Transferor to Seller or such Affiliate in such Purchase Agreement are hereby incorporated herein mutatis mutandis and are hereby remade by Seller to Buyer on each date as of which they speak in such Purchase Agreement. Seller or such Affiliate of Seller has been granted a security interest in each such Purchased Asset, filed one or more UCC financing statements against the Transferor to perfect such security interest, and assigned such financing statements in blank and delivered such assignments to Buyer or Custodian.

(ac)Transfer and Security Interest. The Program Documents constitute a valid and effective transfer to Buyer of all right, title and interest of Seller in, to and under all Purchased Assets (together with all related Servicing Rights), free and clear of any Liens other than Liens created pursuant to this Agreement. With respect to the protective security interest granted by Seller in Section 8 of this Agreement, upon the delivery of the Transaction Request and Confirmations and the Purchased Asset Documents to Custodian, the execution and delivery of the Control Agreement and the filing of the UCC financing statements as provided herein, such security interest shall be a valid first priority perfected security interest to the extent such security interest can be perfected by possession, filing or control under the UCC. Upon receipt by Custodian of each Purchased Asset Document required to be endorsed in blank by Seller and payment by Buyer of the Purchase Price for the related Purchased Asset, Buyer shall either own such Purchased Asset and the related Purchased Asset Documents or have a valid first priority perfected security interest in such Purchased Asset Document. The Purchased Assets constitute the following, as defined in the UCC: a general intangible, instrument, investment property, security, deposit account, financial asset, uncertificated security, securities account, or security entitlement. Seller has not sold, assigned, pledged, granted a security interest in, encumbered or otherwise conveyed any of the Purchased Assets to any Person other than to Buyer pursuant to the Program Documents. Seller has not authorized the filing of and has no knowledge of any UCC financing statements filed against Seller as debtor that include the Purchased Assets, other than any financing statement that has been terminated or filed pursuant to this Agreement.

(ad)Beneficial Ownership Certification. Seller shall at all times either (i) ensure that the Seller has delivered to Buyer a Beneficial Ownership Certification, if applicable, and that the information contained therein is, to Seller’s knowledge, true and correct in all respects or (ii) deliver to Buyer an updated Beneficial Ownership Certification within one (1) Business Day following the date on which the information contained in any previously delivered Beneficial Ownership Certification ceases to be true and correct in all respects. To the extent Seller believes that it is excluded from the requirements of the Beneficial Ownership Regulation, Seller shall certify as such and provide the specific exclusion relied on.

(ae)Use of Proceeds. No Seller Party will, directly or indirectly, use the proceeds of any Transaction, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, (i) to fund any activities or business of or

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with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions, (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in any Transaction, whether as Buyer or otherwise) or (iii) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of Anti-Corruption Laws. Each Seller Party will maintain, or remain subject to, policies and procedures reasonably designed to ensure compliance by such Seller Party, its Subsidiaries and each of its directors, officers, employees and agents, with all applicable Sanctions and Anti-Corruption Laws.

SECTION 12.COVENANTS

On and as of the date of this Agreement and each Purchase Date and at all times until this Agreement is no longer in force and all Transactions have been terminated, Seller covenants as follows:

(a)Preservation of Existence; Compliance with Law. Each Seller Party shall (i) preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business; (ii) comply in all material respects with any applicable Requirements of Law, rules, regulations and orders, whether now in effect or hereafter enacted or promulgated by any applicable Governmental Authority (including, without limitation, all Environmental Laws); (iii) maintain all material licenses, permits or other approvals necessary for Seller Party, as applicable, to conduct its business and to perform its obligations under the Program Documents, and shall conduct its business in all material respects in accordance with any applicable Requirements of Law; (iv) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied; (v) qualify and remain qualified in good standing in each jurisdiction where the failure to be so qualified would have a Material Adverse Effect; (vi) comply in all material respects with its Governing Documents, and comply in all respects with its single purpose entity provisions; and (vii) not materially modify, amend or terminate its Governing Documents (other than any single purpose entity provisions, which shall not be amended, modified or terminated), or divide itself into two or more separate limited liability companies. Seller shall (a) continue to engage in the same (and no other) general lines of business as presently conducted by it, (b) maintain and preserve all of its material rights, privileges, licenses and franchises necessary for the operation of its business, and (c) maintain Seller’s status as a qualified transferee, qualified lender or any similar term (however defined) under the Purchased Asset Documents. Seller shall not (A) change its name, organizational number, tax identification number, fiscal year, method of accounting, identity, structure 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 the Pricing Letter, or (B) move, or consent to Custodian moving, the Purchased Asset Documents from the location thereof on the applicable Purchase Date for the related Purchased Asset, unless in each case Seller has given at least thirty (30) days prior notice to Buyer and has taken all actions required under the UCC to continue the first priority perfected security interest of Buyer in the Purchased Assets. Seller shall enter into each Transaction as principal. Seller shall comply in all material respects with each and every Requirements of Law. No part of the proceeds of any Transaction shall be used for any purpose that violates Regulation T, U or X of the Board of Governors of the Federal Reserve System. Seller shall maintain each of the Custodial Agreement and the Control Agreement in full force and effect. Seller shall not directly or indirectly enter into any agreement that would be violated or breached by any Transaction or the performance by Seller of any Program Document.

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(b)Taxes.

(i)Each Seller Party and its Subsidiaries shall timely file all income, franchise and other material Tax returns that are required to be filed by them and shall timely pay all Taxes due and payable by them or imposed with respect to any of their property and all other material fees and other charges imposed on them or any of their property by any Governmental Authority, except for any such Taxes the amount or validity of which is currently being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided in accordance with GAAP.

(ii)Seller will be treated as a disregarded entity for U.S. federal income tax purposes.

(c)Notice of Proceedings or Adverse Change. Each Seller Party shall give notice to Buyer after a Responsible Officer of Seller Party has any knowledge of the occurrence of any of the following within the timeframe specified below:

(i)immediately following the occurrence of (1) any Default, Event of Default, material default under or related to any Purchased Asset, (2) any event that gives rise to a right of Seller to terminate the Servicing Agreement pursuant to Section 10(a) of the Servicing Agreement, (3) any breach of any representation or warranty applicable to the Loan Servicer in any material respect, or (4) any breach by the Loan Servicer of any of the terms, conditions or covenants set forth in the Servicing Agreement, Servicer Notice or hereunder that are applicable to it, whether or not such event could or does give rise to an event of default thereunder;

(ii)within (a) one (1) Business Day following any event of default that has occurred under any Indebtedness of any Seller Party, or (b) three (3) Business Days following any (x) default that has occurred under any Indebtedness of any Seller Party, (y) litigation, investigation, regulatory action or proceeding that is pending or threatened in writing by or against a Seller Party in any federal or state court or before any Governmental Authority which, if not cured or if adversely determined, would reasonably be expected to have a Material Adverse Effect or constitute a Default or Event of Default, and (z) any Material Adverse Effect with respect to a Seller Party;

(iii)within five (5) Business Days following any litigation or proceeding that is pending or threatened in writing against (a) Seller, Pledgor or Guarantor in which the amount involved exceeds $100,000 with respect to either Seller or Pledgor, or the Litigation Threshold with respect to Guarantor, each in the aggregate, and is not covered by insurance, in which injunctive or similar relief is sought which if adversely determined could have a Material Adverse Effect, and (b) any litigation or proceeding that is pending or threatened in writing in connection with any of the Repurchase Assets, which, if adversely determined, would reasonably be expected to have a Material Adverse Effect;

(iv)within five (5) Business Days, unless otherwise specified herein, notice of any of the following events: (A) a material and adverse change in the insurance coverage of Seller Party, with a copy of evidence of same attached; (B) any material change in accounting policies or financial reporting practices of Seller Party; (C) promptly upon receipt of notice or knowledge of any Lien or security interest (other than security interests created hereby or under any other Program Document) on, or claim asserted against, any of the Repurchase Assets; (D) any Change in Control or any change in direct or indirect ownership or controlling interest of any Seller Party’s direct or indirect owner;

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and (E) any other event, circumstance or condition that has resulted, or is reasonably likely to result, in a Material Adverse Effect;

(v)(A) with respect to any Purchased Asset or related underlying Mortgaged Property: material change in Market Value, material loss or damage, material licensing or permit issues, violation of Requirements of Law, discharge of or damage from Materials of Environmental Concern or any other actual or expected event or change in circumstances that, with respect to each of the foregoing, could reasonably be expected to result in a default or material decline in value or cash flow, and (B) with respect to Seller: material violation of Requirements of Law, or a material decline in the value of Seller’s assets or properties; and

(vi)each change in the location of its principal place of business and chief executive office, from the location referred to in the Pricing Letter.

(d)Financial Reporting. Guarantor shall maintain a system of accounting established and administered in accordance with GAAP consistently applied, and furnish to Buyer, with a certification by the president or chief financial officer of Guarantor (the following in clauses (i) and (ii) hereinafter referred to as the “Financial Statements”):

(i)Within one-hundred and twenty (120) days after the close of each fiscal year, audited consolidated balance sheets and the related consolidated statements of income and retained earnings and of cash flows as at the end of such year for Seller and/or Guarantor for the fiscal year, setting forth in each case in comparative form the figures for the previous year, with an unqualified opinion thereon of an Approved CPA, and a Compliance Certificate;

(ii)Within sixty (60) days after the end of each of the first three fiscal quarters of Guarantor, the management certified consolidated balance sheets and the related consolidated statements of income and retained earnings and of cash flows for Guarantor for such quarterly period(s);

(iii)Within sixty (60) days after the end of each of the first three fiscal quarters of Guarantor and within one-hundred and twenty (120) days after the close of the last fiscal quarter of each fiscal year, a duly completed Compliance Certificate of Guarantor certifying as to Guarantor’s compliance for the prior fiscal quarter with each of the financial covenants set forth in Section 9 of the Guarantee;

(iv)Promptly, from time to time, such other information regarding the business affairs, operations and financial condition of any Seller Party as Buyer may reasonably request;

(v)Promptly, annual financial statements of the Mortgagor with respect to each Purchased Asset, consistent with the terms of the provisions of the Purchased Asset Documents relating to each Mortgaged Property;

(vi)With respect to each Purchased Asset, promptly, but in any event within (a) one (1) Business Day of receipt thereof by a Responsible Officer of Seller or the related Servicer, notices of any events of default or similar event or occurrence under the related Purchased Asset Documents, and (b) two (2) Business Days of receipt thereof by a Responsible Officer of Seller or the related Servicer, a notice of any material events, material litigation or licensing issues;

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(vii)Within fifteen (15) days after the end of each calendar quarter, Seller’s internal summary of the performance of each Purchased Asset; and

(viii)With respect to each Purchased Asset, promptly upon receipt by Seller or the related Servicer, each material report, summary, exhibit or other data required to be delivered to either Seller or the related Servicer under the Purchased Asset Documents relating to each Mortgaged Property.

(e)Further Assurances. Each Seller Party shall (I) execute and deliver to Buyer all further documents, financing statements, agreements and instruments, and take all further actions that may be required under any applicable Requirements of Law, or that Buyer may reasonably request, in order to effectuate the transactions contemplated by this Agreement and the Program Documents or, without limiting any of the foregoing, to grant, preserve, protect and perfect the validity and first-priority of the security interests created or intended to be created hereby, and (II) promptly upon Buyer’s request, deliver documentation in form and substance satisfactory to Buyer which Buyer deems necessary or desirable to evidence compliance with all applicable "know your customer" due diligence checks, including, but not limited to, any information required to be obtained by Buyer pursuant to the Beneficial Ownership Regulation.

(f)True and Correct Information. All information, reports, exhibits, schedules, Financial Statements or certificates of Seller Party or any of its Affiliates thereof or any of their officers furnished to Buyer hereunder and during Buyer’s diligence of Seller Party will be true and complete and will not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading. All required Financial Statements, information and reports delivered by Seller Party to Buyer pursuant to this Agreement shall be prepared in accordance with GAAP, or as applicable to SEC filings, the appropriate SEC accounting requirements.

(g)ERISA Events. No Seller Party shall be in violation of Section 11(v) of this Agreement.

(h)Loan Servicer Approval. Seller shall ensure that the Purchased Assets are serviced and administered only by a Loan Servicer approved in writing by Buyer.

(i)Insurance and Records. Seller and/or Manager shall maintain,and shall cause Loan Servicer to maintain, Fidelity Insurance and errors and omissions insurance in respect of its officers, employees and agents in such amounts acceptable to Buyer, which shall include a provision that such policies cannot be terminated or materially modified without at least thirty (30) days’ prior notice to Buyer. With respect to Loan Servicer, such insurance requirement shall be deemed satisfied if Loan Servicer complies with the insurance requirements set forth in the Servicing Agreement. Seller shall notify Buyer of any material change in the terms of any such insurance. Seller shall maintain endorsements for theft of warehouse lender money and collateral, naming Buyer as a loss payee under its Fidelity Insurance and as a direct loss payee/right of action under its errors and omissions insurance policy. Seller shall maintain and implement administrative and operating procedures (including the ability to recreate records evidencing the Purchased Assets if the original records are destroyed) and shall keep and maintain all documents, books, records and other information (including with respect to the Purchased Assets) that are reasonably necessary or advisable in the conduct of its business.

(j)Books and Records. Seller or its agent shall, to the extent practicable, maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing the Repurchase Assets in the event of the destruction of the originals thereof), and keep and maintain or obtain, as and when required, all documents,

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books, records and other information reasonably necessary or advisable for the collection of all Repurchase Assets.

(k)Illegal Activities. No Seller Party shall engage in any conduct or activity that could subject its assets to forfeiture or seizure.

(l)Material Change in Business. No Seller Party shall make any material change in the nature of its business as carried on at the date hereof.

(m)Limitation on Dividends and Distributions. Following the occurrence and continuation of a Default or an Event of Default, Seller shall not make any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of Seller, whether now or hereafter outstanding, or make any other distribution or dividend in respect of any of the foregoing or to any shareholder or equity owner of Seller, either directly or indirectly, whether in cash or property or in obligations of Seller or any of Seller’s consolidated Subsidiaries.

(n)Structural Changes. No Seller Party shall enter into any merger or consolidation, or adopt, file, or effect a Division, or liquidate, wind up or dissolve, or sell all or substantially all of its assets or properties, or permit any changes in the ownership of the Equity Interests of Seller, without the consent of Buyer. Seller shall ensure that all Equity Interests of Seller shall continue to be directly owned by the owner or owners thereof as of the date hereof. Seller shall ensure that neither the Equity Interests of Seller nor any property or assets of Seller shall be pledged to any Person other than Buyer.

(o)Disposition of Assets; Liens. Seller shall not create, incur, assume or suffer to exist any mortgage, pledge, Lien, charge or other encumbrance of any nature whatsoever on any of the Repurchase Assets, whether real, personal or mixed, now or hereafter owned, other than the Liens created in connection with the transactions contemplated by this Agreement; nor shall Seller cause any of the Purchased Assets to be sold, pledged, assigned or transferred except as permitted hereunder and the other Program Documents.

(p)Transactions with Affiliates. No Seller Party shall enter into any transaction, including, without limitation, the purchase, sale, lease or exchange of property or assets or the rendering or accepting of any service with any Affiliate unless such transaction is (i) not otherwise prohibited in this Agreement, (ii) in the ordinary course of such Seller Party’s business, and (iii) upon fair and reasonable terms no less favorable to Seller Party, as the case may be, than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate.

(q)Organization. No Seller Party shall (i) cause or permit any change to be made in its name, organizational identification number, identity or corporate structure, each as described in Section 11(h) of this Agreement, or (ii) change its jurisdiction of organization, unless it shall have provided Buyer thirty (30) days’ prior written notice of such change and shall have first taken all action required by Buyer for the purpose of perfecting or protecting the lien and security interest of Buyer established hereunder.

(r)Loan Servicer Reports. On a monthly basis on each Reporting Date, Seller shall or shall cause Loan Servicer to furnish to Buyer a report on the Purchased Assets, substantially in the form of Exhibit E to this Agreement.

(s)Confidentiality. Each Seller Party shall comply with all applicable local, state and federal laws, including, without limitation, all privacy and data protection law, rules and regulations that are applicable to the Purchased Assets and/or any applicable terms of this

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Agreement (the “Confidential Information”). Seller Party understands that the Confidential Information may contain “nonpublic personal information”, as that term is defined in Section 509(4) of the Gramm-Leach-Bliley Act (the “GLB Act”), and each Seller Party agrees to maintain such nonpublic personal information that it receives hereunder in accordance with the GLB Act and other applicable federal and state privacy laws.

(t)Sharing of Information. Without limiting the other rights of Buyer under this Agreement, following the occurrence and continuation of an Event of Default, Seller Party hereby allows and consents to Buyer, subject to applicable law, exchanging information related to Seller Party, its credit, its mortgage loan originations and the Transactions hereunder with third party lenders and facility providers (collectively, “Third Party Participants”), and Seller Party shall permit each Third Party Participant to share such similar information with Buyer.

(u)Status. Each Seller Party agrees that should any Seller Party or any Affiliate thereof enter into a repurchase agreement or credit facility with any Person other than Buyer or an Affiliate of Buyer which by its terms provides more favorable terms to counterparty with respect to any guaranties or financial covenants, including without limitation covenants covering the same or similar subject matter referred to in Section 12(h) of this Agreement, Seller shall immediately notify Buyer of such more favorable terms contained in such agreement, identifying such more favorable terms with reasonable specificity.

(v)Acquisition of Mortgaged Property. If a Seller Party or any Affiliate acquires or maintains any right or interest in any Mortgaged Property that is related to a Purchased Asset that is junior to or pari passu with the rights and interests of Buyer therein under this Agreement and the other Program Documents, such Purchased Asset shall immediately be made subject to a Transaction hereunder.

(w)Material Modifications. Seller shall not consent to, permit or suffer to exist any Material Modifications without the prior written consent of Buyer, to be granted or denied in Buyer’s sole discretion. Without limiting the foregoing, Seller shall provide prompt written notice to Buyer of any amendments, modifications or waivers, including but not limited to those constituting Material Modifications, relating to any Mortgage Loan, together with a copy thereof.

(x)Protection of Buyer’s Interest in Purchased Assets. With respect to each Purchased Asset, Seller shall take all action necessary or required by the Program Documents, the Purchased Asset Documents and each and every Requirements of Law, or requested by Buyer, to perfect, protect and more fully evidence the security interest granted in the Purchase Agreements and Buyer’s ownership of and first priority perfected security interest in such Purchased Asset and related Purchased Asset Documents, 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 both collaterally and absolutely and unconditionally assign all rights (but none of the obligations) of Seller under each Purchase Agreement, in each case as additional collateral security for the payment and performance of each of the Obligations. Seller shall (a) not assign, sell, transfer, pledge, hypothecate, grant, create, incur, assume or suffer or permit to exist any security interest in or Lien (other than, except with respect to any Purchased Asset, any Liens granted pursuant to a Program Document) on any Purchased Asset to or in favor of any Person other than Buyer, (b) defend the right, title and interest of Buyer in and to all Purchased Assets against the claims and demands of all Persons whomsoever. Seller shall comply with all requirements of the Custodial Agreement with respect to each Purchased Asset. Notwithstanding the foregoing, (i) if Seller grants a Lien on any Purchased Asset in violation of this Section 12(x) or any other Program Document, Seller shall defend such Purchased Asset against, and take such action as is necessary to remove, any

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such Lien, and be deemed to have simultaneously granted an equal and ratable Lien on such Purchased Asset in favor of Buyer to the extent such Lien has not already been granted to Buyer; provided, that such equal and ratable Lien shall not cure any resulting Event of Default, and (ii) to the extent any additional limited liability company is formed by a Division of Seller (and without prejudice to Section 10 of this Agreement), Seller shall cause any such Division LLC to assign, pledge and grant to Buyer, for no additional consideration, all of its assets, and shall cause any owner of each such Division LLC to pledge all of the Equity Interests and any rights in connection therewith of each such Division LLC to Buyer, for no additional consideration, in support of all Obligations in the same manner and to the same extent as the assignment, pledge and grant by Seller of all of Seller’s assets hereunder, and in the same manner and to the same extent as the pledge by Pledgor of all of Pledgor’s right, title and interest in all of the Equity Interests of Seller and any rights in connection therewith, in each case pursuant to the Pledge Agreement. Seller shall not materially amend, modify, waive or terminate any provision of any Purchase Agreement or Servicing Agreement. Seller shall not, or permit Loan Servicer to make any Material Modification to any Purchased Asset or Purchased Asset Document, without the prior written consent of Buyer, as determined in its sole discretion. Seller shall use appropriate documentation to evidence the interests granted to Buyer hereunder. Seller shall not take any action to cause any Purchased Asset that is not evidenced by an instrument or chattel paper (as defined in the UCC) to be so evidenced. If a Purchased Asset becomes evidenced by an instrument or chattel paper, the same shall be immediately delivered to Custodian on behalf of Buyer, together with endorsements required by Buyer.

(y)Actions of Seller Relating to Indebtedness, Guarantee Obligations, Contractual Obligations and Investments. Seller shall not contract, create, incur, assume or permit to exist any Indebtedness, Guarantee Obligations, contractual obligations or investments, except to the extent (a) arising, or existing or otherwise permitted to exist under the Program Documents, or (b) incurred after the Effective Date to originate or acquire Purchased Assets, or to otherwise provide funding with respect to Purchased Assets.

(z)Delivery of Income. Each Servicer Notice shall require, and Seller shall cause Loan Servicer to, transfer all Income for each Purchased Asset into the Control Account in accordance with the applicable Servicer Notice and Section 5 of this Agreement. Seller shall, and shall cause Loan Servicer to, in connection with each Principal Payment or prepayment under a Purchased Asset, provide or cause to be provided to Buyer sufficient detail to enable Buyer to identify the Purchased Asset to which such payment applies. If Seller receives any rights, whether in addition to, in substitution of, as a conversion of, or in exchange for any Purchased Assets, or otherwise in respect thereof, Seller shall accept the same as Buyer’s agent, hold the same in trust for Buyer and immediately deliver the same to Buyer or its designee in the exact form received, together with duly executed instruments of transfer, stock powers or assignment in blank and such other documentation as Buyer shall reasonably request. If any Income is received by any Seller Party or any Affiliate of any Seller Party, Seller shall, subject to the applicable provisions of the related Servicing Agreement and the Servicer Notice, directly deposit such Income for deposit into the Control Account within two (2) Business Days after receipt, and, until so deposited, hold such Income in trust for Buyer, segregated from other funds of Seller.

(aa)Pledge Agreement. Seller shall not take any direct or indirect action inconsistent with the Pledge Agreement or the security interest granted thereunder to Buyer in the Pledged Collateral. Seller shall not permit any additional Persons to acquire Equity Interests in Seller other than the Equity Interests owned by Pledgor and pledged to Buyer on the Effective Date, and Seller shall not permit any sales, assignments, pledges or transfers of the Equity Interests in Seller other than to Buyer.

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(ab)Beneficial Ownership Certification. Seller shall at all times either (i) ensure that Seller has delivered to Buyer a Beneficial Ownership Certification, if applicable, and that the information contained therein is true and correct in all respects or (ii) deliver to Buyer an updated Beneficial Ownership Certification within one (1) Business Day following the date on which the information contained in any previously delivered Beneficial Ownership Certification ceases to be true and correct in all respects. To the extent Seller believes that it is excluded from the requirements of the Beneficial Ownership Regulation, Seller shall certify as such and provide the specific exclusion relied on.

(ac)Manager and Management Agreement. Manager shall at all times act as manager of Seller, Guarantor and the Purchased Assets. Seller shall not permit or suffer to exist any termination of, or any material modification to, the Management Agreement.

(ad)Failure to Deposit Income. If a Mortgagor, Loan Servicer or any other servicer or paying agent with respect to any Purchased Asset forwards any Income or other amounts with respect to such Purchased Asset to Seller or any Affiliate of Seller rather than directly into the related Loan Servicer Account or the Control Account, Seller shall, or shall cause such Affiliate to deliver an executed Notice to Mortgagor for such Purchased Asset to the applicable Mortgagor, Loan Servicer, other servicer, paying agent or similar Person with respect to such Purchased Asset and make other best efforts to cause such Mortgagor, servicer, paying agent or similar Person with respect to such Purchased Asset to forward such amounts directly to the related Loan Servicer Account or Control Account, as applicable, in accordance with the requirements of this Agreement, the applicable Servicing Agreement or applicable Servicer Notice within one (1) Business Day of Seller’s (or its Affiliate’s) receipt thereof.

SECTION 13.EVENTS OF DEFAULT

If any of the following events (each an “Event of Default”) occur, Buyer shall have the rights set forth in Section 14 of this Agreement, as applicable:

(a)Payment Default. Seller shall default in (i) its obligation to repurchase any Purchased Asset in accordance with this Agreement or (ii) the payment of any other amount payable to Buyer or Custodian by it hereunder or under any other Program Document within one (1) Business Day after the date due including, without limitation, Price Differential or any unpaid Margin Deficit; or

(b)Representation and Warranty Breach. Any representation, warranty or certification made or deemed made herein or in any other Program Document by Seller or any certificate furnished to Buyer pursuant to the provisions hereof or thereof or any information with respect to the Purchased Assets furnished in writing by on behalf of Seller shall prove to have been untrue or misleading in any material respect as of the time made or furnished (other than the representations and warranties set forth in Schedule 1 of this Agreement; unless (i) Seller shall have made any such representations and warranties with actual knowledge that they were materially false or misleading at the time made; or (ii) any such representations and warranties have been determined by Buyer in its sole discretion to be materially false or misleading on a regular basis); provided, however, such breach shall not constitute an Event of Default if such default is susceptible of cure and is remedied within (A) the specified cure period or (B) if no cure period is specified, five (5) Business Days after the occurrence of such breach; provided, further, however, if such breach under clause (B) cannot reasonably be cured within such five (5) Business Day period and Seller Party shall have commenced to cure such breach within such five (5) Business Day period and thereafter diligently and expeditiously proceeds to cure the same, such five (5) Business Day period shall be extended as reasonably necessary for Seller Party, in the exercise of due diligence, to cure such breach, and in no event shall such cure period exceed thirty (30) days after the occurrence of such breach; provided, further, that with

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respect to any breach of the representations and warranties with respect to any Purchased Asset or set forth in Schedule 1 of this Agreement, Seller may elect in its sole discretion to repurchase the applicable Purchased Asset within ten (10) Business Days following the occurrence of such breach, and in such event such breach of the representations and warranties shall be cured and no Event of Default will occur; or

(c)Immediate Covenant Default. The failure of Seller to perform, comply with or observe any term, covenant or agreement applicable to a Seller Party contained in any of Sections 12(a)(i) (Preservation of Existence; Compliance with Law); (b) (Taxes); (d) (Financial Reporting); (f) (True and Correct Information); (g) (ERISA Events); (k) (Illegal Activities); (l) (Material Change in Business); (m) (Limitation on Dividends and Distributions); (n) (Structural Changes); (o) (Disposition of Assets; Liens); (p) (Transactions with Affiliates); (q) (Organization); (w) (Material Modifications); (z) (Delivery of Income); or (cc) (Manager and Management Agreement); or

(d)Additional Covenant Defaults. Any Seller Party shall fail to observe or perform any other covenant or agreement contained in this Agreement (and not identified in Section 13(c) of this Agreement) or any other Program Document, and if such default shall be capable of being remedied, and such failure to observe or perform shall continue unremedied for a period of ten (10) Business Days after notice or actual knowledge thereof; provided, however, that such ten (10) Business Day period shall be extended for up to thirty (30) days so long as such Seller Party is diligently pursuing such cure; or

(e)Judgments. A judgment or judgments for the payment of money in excess of $250,000 with respect to either Seller or Pledgor, or the Litigation Threshold with respect to Guarantor, each in the aggregate, shall be rendered against Seller, Pledgor or Guarantor by one or more courts, administrative tribunals or other bodies having jurisdiction over same and the same is not satisfied, discharged (or provision has not been made for such discharge) or bonded, or a stay of execution thereof has not been procured, within thirty (30) days from the date of entry thereof; or

(f)Other Obligations to Buyer or its Affiliates. Any Seller Party or any Affiliate of a Seller Party defaults beyond any applicable grace period in paying any amount or performing any obligation due to Buyer or any Affiliate of Buyer under any other financing, hedging, security or other agreement (other than under this Agreement) between any Seller Party or any Affiliate of a Seller Party and Buyer or any Affiliate of Buyer, including, without limitation, any covenant or obligation of Guarantor under the Program Guarantee; or

(g)Cross-Default. Seller, Pledgor, Guarantor or any of their other Affiliates shall be in default under any note, indenture, loan agreement, guaranty, Hedge Agreement, or any other material contract or contracts in the aggregate, in excess of $250,000 with respect to either Seller or Pledgor, or the Litigation Threshold with respect to Guarantor or any of its other Affiliates, after expiration of applicable notice and cure periods expressly set forth thereunder, which default (1) involves the failure to pay a matured obligation, or (2) permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness contract; or

(h)Insolvency Event. An Insolvency Event shall have occurred with respect to Seller, Pledgor or Guarantor; or

(i)Enforceability. For any reason, this Agreement or any Program Document at any time shall not be in full force and effect in all material respects or shall not be enforceable in all material respects in accordance with its terms, or any Lien granted pursuant thereto shall fail to be perfected and of first priority, or any Person (other than Buyer) shall contest the

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validity, enforceability, perfection or priority of any Lien granted pursuant to this Agreement or any party thereto (other than Buyer) shall seek to disaffirm, terminate, limit or reduce its obligations hereunder or under any Program Document; or

(j)Liens. Seller shall grant, or suffer to exist, any Lien on any Repurchase Asset (except any Lien in favor of Buyer); or at least one of the following fails to be true: (A) the Repurchase Assets shall have been sold to Buyer, or (B) the Liens contemplated hereby are first priority perfected Liens on any Repurchase Assets in favor of Buyer; or

(k)Change in Control. A Change in Control shall have occurred; or

(l)Going Concern. Guarantor’s audited Financial Statements or notes thereto or other opinions or conclusions stated therein shall be qualified or limited by reference to the status of Seller Party as a “going concern” or reference of similar import; or

(m)Inability to Perform. A Responsible Officer of Seller, Pledgor or Guarantor, as applicable, shall admit in writing or in any manner in any public forum (including, without limitation, in an earnings call or investors meeting) (i) its inability to, or its intention not to, perform any of Seller’s, Pledgor’s or Guarantor’s, as applicable, obligations under this Agreement or any Program Document or (ii) its breach of Seller’s, Pledgor’s or Guarantor’s, as applicable, obligations under this Agreement or any Program Document; or

(n)Governmental Action. Any Seller Party shall become the subject of a cease and desist order of any Governmental Authority or enter into a memorandum of understanding or consent agreement with the Governmental Authority, any of which, would have, or is purportedly the result of any condition which would be reasonably likely to have, a Material Adverse Effect or a Governmental Authority takes any action to (i) condemn, seize or appropriate, or assume custody or control of, all or any substantial part of the property of any Seller Party, (ii) displace the management of any Seller Party or curtail its authority to conduct its business, (iii) terminate the activities of Seller as contemplated by the Program Documents, or (iv) remove, limit or restrict the approval of Seller of the foregoing as an issuer, buyer or a seller of securities, and in each case such action is not discontinued or stayed within thirty (30) days; or

(o)Unenforceable Provisions. Any provision of the Program Documents, any right or remedy of Buyer or obligation, covenant, agreement or duty of Seller thereunder, or any Lien, security interest or control granted under or in connection with the Program Documents, Pledged Collateral or Purchased Assets terminates, is declared null and void, ceases to be valid and effective, ceases to be the legal, valid, binding and enforceable obligation of Seller or any other Person, or the validity, effectiveness, binding nature or enforceability thereof is contested, challenged, denied or repudiated by Seller or any Affiliate thereof, in each case directly, indirectly, in whole or in part; or

(p)Security Interest. Buyer ceases for any reason to have a valid and perfected first priority security interest in any Purchased Asset or any Pledged Collateral; or

(q)Investment Company Act. Any of Seller, Pledgor or Guarantor is required to register as an “investment company” (as defined in the Investment Company Act); or

(r)Failure to Deposit Income. Loan Servicer, any Mortgagor, any Seller Party or any other Person fails to deposit to the Control Account all Income and other amounts as required by Section 5 of this Agreement, the Servicer Notice or any other provisions of this Agreement when due; provided that no Event of Default under this subsection (t) shall occur if (i) such failure to deposit all Income or any other amounts as required by the provisions of this Agreement is due to a failure of a Loan Servicer or Mortgagor and such failure is cured within

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two (2) Business Days and, if such failure is of a Loan Servicer, such Loan Servicer is replaced with a replacement loan servicer acceptable to Buyer pursuant to a servicing agreement acceptable to Buyer, in each case, in Buyer’s sole discretion, within thirty (30) days;

(s)Guarantor’s Financial Standing. 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 Guarantor as a “going concern” or a reference of similar import, other than a qualification or limitation expressly related to Buyer’s rights in the Purchased Assets; or

(t)Division. Seller adopts, files, or effects a Division.

SECTION 14.REMEDIES

(a)If an Event of Default occurs and is continuing, the following rights and remedies are available to Buyer; provided, that an Event of Default shall be deemed to be continuing unless expressly waived by Buyer in writing.

(i)At the option of Buyer, exercised by written or electronic notice to Seller (which option shall be deemed to have been exercised, even if no notice is given, automatically and immediately upon the occurrence of an Insolvency Event of a Seller Party), the Repurchase Date for each Transaction hereunder, if it has not already occurred, shall be deemed immediately to occur (the “Accelerated Repurchase Date”).

(ii)If Buyer exercises or is deemed to have exercised the option referred to in subsection (a)(i) of this Section 14(a), (1) Seller’s obligations in such Transactions to repurchase all Purchased Assets, at the Repurchase Price therefor on the Accelerated Repurchase Date, shall thereupon become immediately due and payable, (2) all Income paid after such exercise or deemed exercise shall be retained by Buyer and applied to the aggregate unpaid Repurchase Price and any other amounts owed by Seller hereunder and (3) Seller shall have no further right to cure any Events of Default.

(iii)To the extent permitted by any applicable Requirements of Law, the Repurchase Price with respect to each such Transaction shall be increased to an amount equal to the aggregate amount obtained by daily application of, on a 360 day per year basis for the actual number of days during the period from and including the date of the occurrence of the related Event of Default or deemed Event of Default, to but excluding the date of payment of the Repurchase Price as so increased, (x) the Post-Default Rate in effect following an Event of Default to (y) the Repurchase Price for such Transaction as of the Accelerated Repurchase Date (decreased as of any day by (i) any amounts applied by Buyer pursuant to clause (C) of this subsection, and (ii) any proceeds from the sale of Purchased Assets applied to the Repurchase Price pursuant to subsection (a)(iv) of this Section.

(iv)All Income actually received by Buyer pursuant to Section 5 of this Agreement shall be applied in Buyer’s sole discretion to the aggregate unpaid Obligations hereunder owed by Seller Parties.

(v)During the existence of one or more Events of Default and, in any event, at any time on and after the Accelerated Repurchase Date, Buyer shall have the right to obtain (A) a physical transfer of the servicing of the Purchased Assets in accordance with a servicing transfer under Section 16(c) of this Agreement, and (B) physical possession of all files of Seller relating to the Purchased Assets and the Repurchase Assets and all documents relating to the Purchased Assets which are then or may thereafter come in to

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the possession of Seller or any third party acting for Seller (including Loan Servicer) and Seller shall deliver to Buyer such assignments as Buyer shall request. In addition, at any time thereafter Buyer may deliver to any Mortgagor, and any servicer, paying agent or similar Person with respect to any Purchased Asset (as applicable), a duly completed Notice to Mortgagor held by Custodian pursuant to Section 3(b)(xiv) of this Agreement), and Buyer may complete any assignments, allonges, endorsements, powers or other documents or instruments executed in blank and Seller shall deliver to Buyer such assignments and other documents with respect thereto as Buyer shall request. Buyer shall be entitled to specific performance of all agreements of Seller contained in the Program Documents.

(vi)Buyer may immediately, at any time, and from time to time, exercise either of the following remedies with respect to any or all of the Purchased Assets: (i) sell such Purchased Assets on a servicing-released basis and/or without providing any representations and warranties on an “as-is where is” basis, in a recognized market and by means of a public or private sale at such price or prices as Buyer accepts, and apply the net proceeds thereof in accordance with Section 5 of this Agreement, or (ii) retain such Purchased Assets and give Seller credit against the Repurchase Price for such Purchased Assets (or if the amount of such credit exceeds the Repurchase Price for such Purchased Assets, to credit against Obligations due and any other amounts (without duplication) then owing to Buyer by any other Person pursuant to any Program Document, in such order and in such amounts as determined by Buyer), in an amount equal to the market value of such Purchased Assets on the date of the related Event of Default. Until such time as Buyer exercises either such remedy with respect to a Purchased Asset, Buyer may hold such Purchased Asset for its own account and retain all Income with respect thereto.

(vii)Seller shall be liable to Buyer for (A) the amount of all reasonable legal or other expenses (including, without limitation, all costs and expenses of Buyer in connection with the enforcement of this Agreement or any other agreement evidencing a Transaction, whether in action, suit or litigation or bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally, further including, without limitation, the reasonable fees and expenses of counsel (including the costs of internal counsel of Buyer) incurred in connection with or as a result of an Event of Default which is continuing, (B) damages in an amount equal to the cost (including all fees, expenses and commissions) of Buyer entering into replacement transactions and entering into or terminating hedge transactions in connection with or as a result of an Event of Default which is continuing, (C) any other loss, damage, cost or expense directly arising or resulting from the occurrence and continuation of an Event of Default in respect of a Transaction, (D) any amount by which the Obligations due to Buyer exceed the aggregate of the net proceeds and credits referred to in Section 14(a)(iv) of this Agreement, (E) the amount of all actual out-of-pocket expenses, including reasonable legal fees and expenses, actually incurred by Buyer in connection with or as a consequence of an Event of Default, (iii) any costs and losses payable under Section 15(b) of this Agreement, and (F) any other actual loss, damage, cost or expense resulting from the occurrence of an Event of Default.

(viii)During the existence of one or more Events of Default and, in any event, at any time on and after the Accelerated Repurchase Date, Buyer shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or any applicable Requirements of Law.

(b)Buyer may exercise one or more of the remedies available hereunder immediately upon the occurrence of an Event of Default that is continuing on such date and at any time thereafter without notice to Seller. All rights and remedies of Buyer under the Program

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Documents, including those set forth in this Section 14, are cumulative and not exclusive of any other rights or remedies that Buyer may have and may be exercised at any time when an Event of Default exists. Such rights and remedies may be enforced without prior judicial process or hearing. Seller agrees 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. Seller hereby expressly waives any defenses Seller might have to require Buyer to enforce its rights by judicial process or otherwise arising from the use of nonjudicial process, disposition of any or all of the Purchased Assets, or any other election of remedies.

(c)Seller Parties recognize that the market for the Purchased Assets and/or Repurchase Assets may not be liquid and as a result it may not be possible for Buyer to sell all of the Purchased Assets and/or Repurchase Assets on a particular Business Day, or in a transaction with the same purchaser, or in the same manner and agree that the Purchased Assets are of such a nature that they may decline rapidly in value, and may not have a ready or liquid market. Accordingly, Buyer shall not be required to sell more than one Purchased Asset on a particular Business Day, to the same purchaser or in the same manner. Buyer may determine whether, when and in what manner a Purchased Asset shall be sold, it being agreed that both a good faith public and a good faith private sale shall be deemed to be commercially reasonable. Buyer shall not be required to give notice to Seller or any other Person prior to exercising any remedy in respect of an Event of Default. If no prior notice is given, Buyer shall give notice to Seller of the remedies exercised by Buyer promptly thereafter. In view of the nature of the Purchased Assets and Repurchase Assets, Seller Parties agree that liquidation of any Purchased Asset and/or Repurchase Asset may be conducted in a private sale. Seller Parties acknowledge and agree that any such private sale may result in prices and other terms less favorable to Buyer than if such sale were a public sale, and notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. Seller Parties further agree that it would not be commercially unreasonable for Buyer to dispose of any Purchased Asset and/or Repurchase Asset by using internet sites that provide for the auction or sale of assets similar to the Purchased Assets and/or Repurchase Assets, or that have the reasonable capability of doing so, or that match buyers and Seller of assets.

(d)Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and each Seller Party hereby expressly waives any defenses such Seller Party might otherwise have to require Buyer to enforce its rights by judicial process. Each Seller Party also waives any defense (other than a defense of payment or performance) such Seller Party might otherwise have arising from the use of nonjudicial process, enforcement and sale of all or any portion of the Repurchase Assets, or from any other election of remedies. Each Seller Party 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.

(e)To the extent permitted by any applicable Requirements of Law, Seller shall be liable to Buyer for interest on any amounts owing by Seller hereunder, from the date Seller become liable for such amounts hereunder until such amounts are (i) paid in full by Seller or (ii) satisfied in full by the exercise of Buyer’s rights hereunder. Interest on any sum payable by Seller to Buyer under this Section 14(e) shall be at a rate equal to the Post-Default Rate.

(f)Without limiting the rights of Buyer hereto to pursue all other legal and equitable rights available to Buyer for any Seller Party’s failure to perform its obligations under this Agreement, each Seller Party acknowledges and agrees that the remedy at law for any failure to perform obligations hereunder would be inadequate and Buyer 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 Buyer from pursuing any other remedies for such breach, including the recovery of monetary damages.

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(g)After the occurrence and during the continuance of an Event of Default, Seller hereby appoints Buyer as attorney-in-fact of Seller for purposes of carrying out the Program Documents, including executing, endorsing and recording any instruments or documents and taking any other actions that Buyer deems necessary or advisable to accomplish such purposes, which appointment is coupled with an interest and is irrevocable.

(h)Buyer may, without prior notice to Seller, exercise any or all of its set-off rights including those set forth in Section 22 of this Agreement and pursuant to any other Program Document, provided that Buyer will endeavor to provide Seller with notice of such exercise promptly thereafter. This Section 14(h) shall be without prejudice and in addition to any right of set-off, combination of accounts, Lien or other rights to which Buyer is at any time otherwise entitled.

(i)All amounts in the Control Account and all Income paid after the occurrence and during the continuance of an Event of Default, and, in any event, at all times after the Accelerated Repurchase Date shall be retained by Buyer and applied in accordance with Section 5(d) of this Agreement.

SECTION 15.INDEMNIFICATION AND EXPENSES; RECOURSE

(a)Seller shall indemnify Buyer and each of its Affiliates (each such Person being called an “Indemnified Party”) against, and hold each Indemnified Party harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnified Party), and shall indemnify and hold harmless each Indemnified Party from all fees and time charges and disbursements for attorneys who may be employees of any Indemnified Party, incurred by any Indemnified Party or asserted against any Indemnified Party by any Person (including Seller or any other Seller Party) arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Program Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Purchased Asset or the use or proposed use of the proceeds from any Transaction, (iii) any actual or alleged presence or Release of Materials of Environmental Concern on or from any property owned or operated by Seller or any of its Affiliates, or any liability under any Environmental Law related in any way to any Purchased Asset, or Seller or any of its Affiliates, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by Seller or any of its Affiliates, and regardless of whether any Indemnified Party is a party thereto; provided that such indemnity shall not, as to any Indemnified Party, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnified Party or (y) result from a claim brought by Seller or any of its Affiliates against an Indemnified Party for breach in bad faith of such Indemnified Party's obligations hereunder or under any other Program Document, if Seller or any of its Affiliates has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. This Section 15(a) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

(b)Seller agrees to pay as and when billed by Buyer all of the out-of-pocket costs and expenses incurred by Buyer in connection with the development, preparation and execution of this Agreement, any other Program Document or any other documents prepared in connection herewith or therewith. In connection therewith, Seller shall reimburse Buyer for any of Buyer’s reasonable attorney’s fees and expenses (but excluding any expenses with respect to due diligence which shall be reimbursed pursuant to Section 17 of this Agreement) incurred by

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Buyer in connection with the preparation of the Program Documents. Seller shall pay as and when billed all of the out-of-pocket costs and expenses incurred by Buyer in connection with any amendment, supplement or modification to, this Agreement, any other Program Document or any other documents prepared in connection herewith or therewith. Seller agrees to pay as and when billed by Buyer all of the reasonable out-of-pocket costs and expenses incurred in connection with the consummation and administration of the transactions contemplated hereby and thereby including without limitation search and filing fees and all the reasonable fees, disbursements and expenses of counsel to Buyer. Seller agrees to pay Buyer all the reasonable out of pocket due diligence, inspection, testing and review costs and expenses incurred by Buyer with respect to Mortgage Loans submitted by Seller for purchase under this Agreement, including, but not limited to, those out of pocket costs and expenses incurred by Buyer pursuant to Sections 15(a) and 17 of this Agreement.

(c)The obligations of Seller from time to time to pay the Repurchase Price, the Price Differential, the Obligations hereunder and all other amounts due under this Agreement shall be full recourse obligations of Seller.

SECTION 16.SERVICING

(a)Each servicer of any Purchased Asset (including, without limitation Loan Servicer) shall service the Purchased Assets for the benefit of Buyer and Buyer’s successors and assigns. Seller shall cause each such servicer (including, without limitation, Loan Servicer) to service the Purchased Assets at Seller’s sole cost and for the benefit of Buyer in accordance with Accepted Servicing Practices; provided that, without prior written consent of Buyer, as determined in its sole discretion, no servicer (including, without limitation, Loan Servicer) shall authorize or otherwise permit any Material Modifications.

(b)Seller agrees that Buyer is the owner of all Servicing Rights and all Servicing Records, including, but not limited to, any and all servicing agreements (including, without limitation, the Servicing Agreement or any other servicing and/or subservicing agreement relating to the servicing of any or all of the Purchased Assets), together with all files, documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing documentation, payment history records, and any other records relating to or evidencing the servicing and/or subservicing of Purchased Assets (the “Servicing Records”), so long as the Purchased Assets are subject to this Agreement. Seller covenants to safeguard such Servicing Records and to deliver them promptly to Buyer or its designee (including Custodian) at Buyer’s request.

(c)Upon the occurrence and during the continuance of an Event of Default, Buyer may, in its sole discretion, (i) sell its right to the Purchased Assets on a servicing released basis and/or (ii) terminate Loan Servicer or any other servicer or sub servicer of the Purchased Assets (including, without limitation, Seller, in its capacity as servicer of the Purchased Assets), with or without cause, in each case without payment of any termination fee.

(d)Upon the occurrence of (i) an event under the Servicing Agreement that gives rise to the right of Seller to terminate the Servicing Agreement pursuant to Article V thereof, (ii) the Loan Servicer being otherwise terminated or removed as servicer for any reason, including but not limited to by reason of a breach of any of Loan Servicer’s obligations under the Servicer Notice, (iii) the Loan Servicer resigning as servicer for any reason, or (iv) an Insolvency Event with respect to the Loan Servicer, Buyer shall have the right in its sole discretion to appoint a replacement Loan Servicer pursuant to a servicing agreement in form and substance acceptable to Buyer in Buyer’s sole discretion.

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(e)Seller shall not employ sub servicers or any other servicer other than Loan Servicer pursuant to the Servicing Agreement to service the Purchased Assets without the prior written approval of Buyer, in Buyer’s sole discretion. If the Purchased Assets are serviced by a sub servicer or any other servicer, Seller shall, irrevocably assign all rights, title and interest (if any) in the servicing agreements related to each of the Purchased Assets to Buyer. Seller shall cause all servicers (including, without limitation, Loan Servicer) and sub servicers engaged by Seller to execute a Servicer Notice with Buyer acknowledging Buyer’s ownership of the Purchased Assets and Servicing Rights and Buyer’s security interest and agreeing that each servicer and/or sub servicer shall promptly transfer all Income and other amounts with respect to the Purchased Assets to Buyer in accordance with the applicable Servicing Agreement and so long as any Purchased Asset is owned by Buyer hereunder, following notice from Buyer to Seller and each such servicer of an Event of Default under this Agreement, each such servicer (including Loan Servicer) or sub servicer shall take no action with regard to such Purchased Asset other than as specifically directed by Buyer. Seller shall cause each servicing agreement (including the Servicing Agreement) to be consistent with the terms of this Agreement and each servicer (including Loan Servicer) to comply with such terms.

(f)Other than as set forth in the Servicer Notice, the payment of servicing fees shall be subordinate to payment of amounts outstanding under any Transaction and this Agreement.

(g)For the avoidance of doubt, Seller retains no economic rights to the servicing of the Purchased Assets. As such, Seller expressly acknowledges that the Purchased Assets are sold to Buyer on a “servicing released” basis with such servicing retained by Buyer.

(h)On or prior to each Purchase Date and to the extent that they have not already done so, Seller and Loan Servicer responsible for servicing the related Purchased Asset shall enter into the Servicing Agreement and a fully-executed Servicer Notice. Each Servicing Agreement shall automatically terminate on the thirtieth (30th) day following its execution and at the end of each thirty (30) day period thereafter, unless, in each case, Buyer shall agree, by prior written notice to Loan Servicer to be delivered on or before the Payment Date immediately preceding each such scheduled termination date, to extend the termination date an additional thirty (30) days. Neither Seller nor Loan Servicer may assign its rights or obligations under any Servicing Agreement without the prior written consent of Buyer.

SECTION 17. DUE DILIGENCE

Each Seller Party acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the Purchased Assets, Seller Parties, Loan Servicer and other parties which may be involved in or related to Transactions (but, with respect to Loan Servicer, subject to the requirements of the Servicing Agreement) (collectively, “Third Party Transaction Parties”), as deemed appropriate by Buyer in its sole good faith discretion, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, and Seller Parties and Loan Servicer each agree that upon reasonable prior notice to Seller Parties or Loan Servicer, as applicable, unless an Event of Default shall have occurred and be continuing, in which case no notice is required, Buyer or its authorized representatives will be permitted at reasonable times, upon reasonable notice, to examine, inspect, and make copies and extracts of, the Mortgage Asset Files and any and all documents, records, agreements, instruments or information relating to such Purchased Assets in the possession or under the control of any Seller Party or Loan Servicer; providedhowever, that unless a Default or Event of Default has occurred and is continuing, Seller shall only be responsible one (1) time in any one (1) year period to pay for Buyer’s reasonable out-of-pocket costs and expenses incurred in connection with such a review. Any inspection during any time that a Default or Event of Default has occurred and is continuing shall be at Seller’s sole cost and expense. Seller Parties

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will use commercially reasonable efforts to cause Third Party Transaction Parties to cooperate with any due diligence requests of Buyer. Seller Parties and Loan Servicer shall also make available to Buyer upon reasonable prior notice a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Asset Files and the Purchased Assets. Without limiting the generality of the foregoing, Seller acknowledges that Buyer may purchase Purchased Assets from Seller based solely upon the information provided by Seller to Buyer in the Transaction Request and Confirmation and the representations, warranties and covenants contained herein, and that Buyer, at its option, has the right at any time to cause Loan Servicer or its agent to conduct a partial or complete due diligence review on some or all of the Purchased Assets purchased in a Transaction, including, without limitation, ordering new Qualified Appraisals on the related Mortgaged Properties and otherwise re-generating the information used to originate such Purchased Asset and reviewing intercreditor agreements, property management agreements, formation documents of the property owners and their direct and indirect owners, financial statements, environmental and engineering reports, underlying title policies including owner’s and UCC-9 title insurance policies, legal opinions and other documents as may be mutually agreed among Seller and Buyer. For the avoidance of doubt, Buyer shall have the right to perform due diligence on the Purchased Assets prior to the Purchase Date and as necessary during the term of this Agreement, as determined by Buyer in is sole discretion, subject to the terms of the Mortgage Loan Documents. Buyer may underwrite such Purchased Assets itself or engage a mutually agreed upon third party underwriter to perform such underwriting. Seller and Loan Servicer agree to cooperate with Buyer and any third party underwriter in connection with such underwriting, including, but not limited to, providing Buyer and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Purchased Assets in the possession, or under the control, of Seller Parties or Loan Servicer. Seller further agrees that it shall pay, to the extent Seller has received an invoice therefor, all reasonable out-of-pocket costs and expenses incurred by Buyer in connection with Buyer’s activities pursuant to this Section 17.

SECTION 18.ASSIGNABILITY

The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by any Seller Party without the prior written consent of Buyer. Buyer may from time to time, without the consent of Seller, assign all or a portion of its rights and obligations under this Agreement and the Program Documents to any party including, without limitation, any Affiliate of Buyer, pursuant to an executed assignment and acceptance by Buyer and assignee (“Assignment and Acceptance”), specifying the percentage or portion of such rights and obligations assigned; provided, however, that so long as no Event of Default has occurred and is continuing, any such assignee is not a Prohibited Transferee; providedfurther, however, Seller shall not be charged for, incur or be required to reimburse Buyer or any other Person for any cost or expense relating to such assignment. Upon such assignment and assumption, (a) such assignee shall be a party hereto and to each Program 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 Buyer hereunder, and (b) Buyer shall, to the extent that such rights and obligations have been so assigned by it be released from its obligations hereunder and under the Program Documents. Subject to the foregoing, this Agreement and any Transactions 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 hereunder, any benefit of any legal or equitable right, power, remedy or claim under this Agreement. Unless otherwise stated in the Assignment and Acceptance, Seller shall continue to take directions solely from Buyer unless otherwise notified by Buyer in writing.

Buyer may sell participations to one or more Persons in or to all or a portion of its rights and obligations under this Agreement; providedhowever, that so long as no Event of

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Default has occurred and is continuing, any such assignee is not a Prohibited Transferee; provided, further, however, that (i) Buyer’s obligations under this Agreement shall remain unchanged, (ii) Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) Seller shall continue to deal solely and directly with Buyer in connection with Buyer’s rights and obligations under this Agreement and the other Program Documents and (iv) Seller shall not be charged for, incur or be required to reimburse Buyer or any other Person for any cost or expense relating to such participation. Seller agrees that any participant shall be entitled to the benefits of Section 6(a) and Section 7 of this Agreement (subject to the limitations and requirements under Section 7 of this Agreement (it being understood that the applicable documentation required under Section 7(e) of this Agreement shall be delivered to the participating Buyer)); provided that, no participant will be entitled to any greater payment under Section 6(a) or Section 7 of this Agreement, than its participating Buyer would have been entitled to receive with respect to the applicable participated rights and obligations.

Buyer may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 18, disclose to the assignee or participant or proposed assignee or participant, as the case may be, any information relating to any Seller Party or to any aspect of the Transactions that has been furnished to Buyer by or on behalf of any Seller Party; provided that such assignee or participant agrees to hold such information subject to the confidentiality provisions of this Agreement and any confidentiality provisions applicable to any of the documents related thereto.

In the event Buyer assigns all or a portion of its rights and obligations under this Agreement, the parties hereto agree to negotiate in good faith an amendment to this Agreement to add agency provisions similar to those included in agreements for similar syndicated repurchase facilities and that Seller shall not be charged for, incur or be required to reimburse Buyer or any other Person for any cost or expense relating to such sale, participation, assignment or transfer.

SECTION 19.TRANSFER AND MAINTENANCE OF REGISTER.

(a)Subject to acceptance and recording thereof pursuant to Section 19(b) of this Agreement from and after the effective date specified in each Assignment and Acceptance the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of Buyer under this Agreement. Any assignment or transfer by Buyer of rights or obligations under this Agreement that does not comply with this Section 19 shall be treated for purposes of this Agreement as a sale by such Buyer of a participation in such rights and obligations in accordance with Section 19(b) of this Agreement.

(b)Buyer shall maintain, on Seller’s behalf, a register (the “Register”) on which it will record each Assignment and Acceptance and participation. The Register shall include the names and addresses of Buyer (including all assignees, successors and participants) and the percentage or portion of such rights and obligations assigned; provided that, no Buyer shall have any obligation to disclose all or any portion of the Register to the extent that it relates to participants (including the identity of any participant or any information relating to a participant’s interest in any rights or obligations under this Agreement and the other Program Documents) to any Person except to the extent that such disclosure is necessary to establish that such rights or obligations are in registered form in accordance with Section 5f.103-1(c) of the Treasury Regulations. Failure to make any such recordation, or any error in such recordation shall not affect Seller’s obligations in respect of such rights. The entries in the Register shall be conclusive absent manifest error and the parties shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Buyer or participant, as applicable, for all

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purposes of this Agreement. No assignment shall be effective unless recorded in the Register. This Section 19(b) shall be construed so that all Obligations are at all times maintained in “registered form” within the meaning of Section 163(f), 871(h)(2) and 881(c)(2) of the Code and any related Treasury regulations (or any other relevant or successor provisions of the Code or of such Treasury regulations).

SECTION 20.HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

Title to all Purchased Assets and Repurchase Assets shall pass to Buyer and Buyer shall have free and unrestricted use of all Purchased Assets. Nothing in this Agreement shall preclude Buyer from engaging in repurchase transactions with the Purchased Assets or otherwise pledging, repledging, transferring, hypothecating, or rehypothecating the Purchased Assets to any Person, subject to Buyer’s obligations to resell the Purchased Assets to Seller as provided in this Agreement. Nothing contained in this Agreement shall obligate Buyer to segregate any Purchased Assets delivered to Buyer by Seller.

SECTION 21.TAX TREATMENT

Notwithstanding anything to the contrary in this Agreement or any other Program Documents, each party to this Agreement acknowledges that it is its intent for U.S. federal, state and local income and franchise tax purposes to treat each (i) Transaction as Indebtedness of Seller that is secured by the Purchased Assets and (ii) the Purchased Assets as owned by Seller in the absence of an Event of Default which is continuing. All parties to this Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless required by any Requirements of Law (in which case such party shall promptly notify the other party of such Requirements of Law).

SECTION 22.SET-OFF

In addition to any rights and remedies of Buyer hereunder and by law, Buyer shall have the right, without prior notice to any Seller Party, any such notice being expressly waived by each Seller Party to the extent permitted by applicable law, to set-off and appropriate and apply against any Obligation from any Seller Party or any Affiliate thereof to Buyer or any of its 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 or cash, 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 Buyer or any Affiliate thereof to or for the credit or the account of any Seller Party or any Affiliate thereof. Buyer agrees promptly to notify Seller Parties after any such set-off and application made by Buyer; provided that the failure to give such notice shall not affect the validity of such set-off and application.

Buyer shall at any time have the right, in each case until such time as Buyer determines otherwise, to retain, to suspend payment or performance of, or to decline to remit, any amount or property that Buyer would otherwise be obligated to pay, remit or deliver to Seller hereunder if an Event of Default or Default has occurred and is continuing.

SECTION 23.SURVIVAL

Each representation and warranty made or deemed to be made by entering into a Transaction, herein or pursuant hereto shall survive the making of such representation and warranty, and Buyer shall not be deemed to have waived any Default or Event of Default that may arise because any such representation or warranty shall have proved to be false or misleading, notwithstanding that Buyer may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time the Transaction was

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made. Notwithstanding any such termination or the occurrence and continuation of an Event of Default, all of the representations and warranties and covenants hereunder shall continue and survive (other than the representations and warranties set forth in Schedule 1, which shall survive with respect to the Purchased Asset until each such Purchased Asset is repurchased in accordance with this Agreement). The obligations of each Seller Party under Sections 6, 7, 15, and 31 of this Agreement shall survive the termination of this Agreement.

SECTION 24.NOTICES AND OTHER COMMUNICATIONS

Except as otherwise expressly permitted by this Agreement, all notices, requests and other communications provided for herein (including without limitation any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including without limitation by electronic transmission) delivered to the intended recipient at the “Address for Notices” specified below its name on the signature pages hereof or thereof); and as to any party, at such other address as shall be designated by such party in a written notice to each other party. 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. Except as otherwise provided in this Agreement and except for notices given under Section 3 of this Agreement (which shall be effective only on receipt), all such communications shall be deemed to have been duly given when successfully transmitted electronically or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid.

SECTION 25.USE OF ELECTRONIC MEDIA

Seller acknowledges and agrees that Buyer may require or permit certain transactions with Buyer be conducted electronically using Electronic Records and/or Electronic Signatures. Seller consents to the use of Electronic Records and/or Electronic Signatures whenever expressly required or permitted by Buyer and acknowledges and agrees that Seller shall be bound by their respective Electronic Signature and by the terms, conditions, requirements, information and/or instructions contained in any such Electronic Records.

Seller agrees to adopt as its Electronic Signature its user identification codes, passwords, personal identification numbers, access codes, a facsimile image of a written signature and/or other symbols or processes as provided or required by Buyer from time to time (as a group, any subgroup thereof or individually, hereinafter referred to as Seller’s Electronic Signature). Seller acknowledges that Buyer will rely on any and all Electronic Records and on Seller’s Electronic Signature transmitted or submitted to Buyer.

Buyer shall not be liable for the failure of either its or Seller’s internet service provider, or any other telecommunications company, telephone company, satellite company or cable company to timely, properly and accurately transmit any Electronic Record or fax copy.

Before engaging in Electronic Transactions with Seller, Buyer may provide Seller, or require Seller to create, user identification codes, passwords, personal identification numbers and/or access codes, as applicable, to permit access to Buyer’s computer information processing system. Seller shall be fully responsible for protecting and safeguarding any and all user identification codes, passwords, personal identification numbers and access codes provided or required by Buyer. Seller shall adopt and maintain security measures to prevent the loss, theft or unauthorized or improper disclosure or use of any and all user identification codes, passwords, personal identification numbers and/or access codes by Persons other than the individual Person who is authorized to use such information.

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Seller understands and agrees that they shall be fully responsible for protecting and safeguarding their computer hardware and software from any and all (a) computer “viruses,” “time bombs,” “trojan horses” or other harmful computer information, commands, codes or programs that may cause or facilitate the destruction, corruption, malfunction or appropriation of, or damage or change to, any of Seller’s computer information processing systems, including without limitation, all hardware, software, Electronic Records, information, data and/or codes and (b) computer “worms,” “trap doors” or other harmful computer information, commands, codes or programs that enable unauthorized access to Seller’s computer information processing systems, including without limitation, all hardware, software, Electronic Records, information, data and/or codes.

If Buyer, from time to time, establishes minimum security standards, Seller shall comply with such minimum security standards within the time period established by Buyer. Buyer shall have the right to confirm Seller’s compliance with any such minimum security standards. Seller’s compliance with such minimum security standards shall not relieve Seller from any of its liability set forth herein.

Whether or not Buyer establishes minimum security standards, Seller shall continue to be fully responsible for adopting and maintaining security measures that are consistent with the risks associated with conducting Electronic Transactions with Buyer. Seller’s failure to adopt and maintain appropriate security measures or to comply with any minimum security standards established by Buyer may result in, among other things, termination of Seller’s access to Buyer’s computer information processing systems.

SECTION 26.ENTIRE AGREEMENT; SEVERABILITY; SINGLE AGREEMENT

This Agreement, together with the other Program Documents, constitute the entire understanding between Buyer and Seller Parties with respect to the subject matter they cover and shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions involving Purchased Assets. By acceptance of this Agreement, Buyer and Seller Parties each acknowledge that they have not made, and are 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.

Buyer and Seller acknowledge, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact, that all Transactions hereunder constitute a single business and contractual relationship and that each has been entered into in consideration of the other Transactions. Accordingly, each of Buyer and each Seller Party agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that Buyer shall be entitled to set off claims and apply property held by it in respect of any Transaction against obligations owing to it in respect of any other Transaction hereunder; (iii) that payments, deliveries, and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries, and other transfers in respect of any other Transactions 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.

SECTION 27.GOVERNING LAW

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK

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WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF, PROVIDED THAT THE PARTIES INTEND THAT THE PROVISIONS OF SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER PARTY SHALL BE GOVERNED BY E-SIGN.

SECTION 28.SUBMISSION TO JURISDICTION; WAIVERS

BUYER AND EACH SELLER PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY:

(i)SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER PROGRAM 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;

(ii)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;

(iii)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, RETURN RECEIPT REQUESTED, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE OTHER PARTY SHALL HAVE BEEN NOTIFIED;

(iv)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

(v)WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER PROGRAM DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

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SECTION 29.NO WAIVERS, ETC.

No failure on the part of Buyer to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any Program Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any Program 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. An Event of Default shall be deemed to be continuing unless expressly waived by Buyer in writing.

SECTION 30.NETTING

If Buyer and Seller are “financial institutions” as now or hereinafter defined in Section 4402 of Title 12 of the United States Code (“Section 4402”) and any rules or regulations promulgated thereunder (a) all amounts to be paid or advanced by one party to or on behalf of the other under this Agreement or any Transaction hereunder shall be deemed to be “payment obligations” and all amounts to be received by or on behalf of one party from the other under this Agreement or any Transaction hereunder shall be deemed to be “payment entitlements” within the meaning of Section 4402, and this Agreement shall be deemed to be a “netting contract” as defined in Section 4402; (b) the payment obligations and the payment entitlements of the parties hereto pursuant to this Agreement and any Transaction hereunder shall be netted as follows. If either party (the “Defaulting Party”) shall fail to honor any payment obligation under this Agreement or any Transaction hereunder, the other party (the “Nondefaulting Party”) shall be entitled to reduce the amount of any payment to be made by the Nondefaulting Party to the Defaulting Party by the amount of the payment obligation that the Defaulting Party failed to honor.

SECTION 31.CONFIDENTIALITY

Buyer and each Seller Party hereby acknowledge and agree that all written or computer-readable information provided by one party to any other regarding the terms set forth in any of the Program Documents or the Transactions contemplated thereby (the “Confidential Terms”) shall be kept confidential and shall not be divulged to any party without the prior written consent of such other party except to the extent that (i) it is necessary to do so in working with legal counsel, auditors, taxing authorities or other governmental agencies or regulatory bodies or in order to comply with any applicable federal or state laws or any court orders, (ii) any of the Confidential Terms are in the public domain other than due to a breach of this covenant, (iii) in the event of an Event of Default Buyer determines such information to be necessary or desirable to disclose in connection with the marketing and sales of the Purchased Assets or otherwise to enforce or exercise Buyer’s rights hereunder or (iv) by Buyer in connection with any marketing material undertaken by Buyer.

Notwithstanding the foregoing or anything to the contrary contained herein or in any other Program Document, the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment and tax structure of the Transactions, any fact relevant to understanding the federal, state and local tax treatment of the Transactions, 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 and tax structure; provided that no Seller Party or Subsidiary of Affiliate thereof may disclose the name of or identifying information with respect to Buyer, its Affiliates or any other Indemnified Party, or any pricing terms (including, without limitation, the Pricing Rate and Purchase Price) or other nonpublic business or financial information (including any sublimits and financial covenants) that is unrelated to the federal, state and local tax treatment of the Transactions and is not relevant to understanding the federal, state and local tax treatment of the

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Transactions, without the prior written consent of Buyer. The provisions set forth in this Section 31 shall survive the termination of this Agreement.

SECTION 32.INTENT

(a)The parties intend and recognize that (i) this Agreement, together with all Transactions, constitutes a single agreement; (ii) this Agreement and each Transaction, to the extent that it has a Repurchase Date less than one year after the Purchase Date, qualifies as a “repurchase agreement” as that term is defined in Section 101 of the Bankruptcy Code; (iii) this Agreement and each Transaction is a “securities contract” as that term is defined in Section 741 of the Bankruptcy Code; (iv) this Agreement is a “master netting agreement” as that term is defined in Section 101(38A)(A) of the Bankruptcy Code; (v) each payment hereunder has been made by, to or for the benefit of a “financial institution” as defined in section 101(22) of the Bankruptcy Code, a “financial participant” as defined in section 101(22A) of the Bankruptcy Code or “repo participant” as defined in section 101(46) of the Bankruptcy Code; and (vi) the grant of a security interest set forth in Section 8 of this Agreement constitutes “a security agreement or other arrangement or other credit enhancement” that is “related to” this Agreement and Transactions hereunder within the meaning of Sections 101(38A)(A), 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code. Seller and Buyer further recognize and intend that this Agreement is an agreement to provide financial accommodations and is not subject to assumption pursuant to Bankruptcy Code Section 365(a).

(b)Buyer’s right to liquidate the Purchased Assets delivered to it in connection with the Transactions hereunder or to accelerate or terminate this Agreement or otherwise exercise any other remedies pursuant to Section 14 of this Agreement is a contractual right to liquidate, accelerate or terminate such Transaction as described in Bankruptcy Code Sections 555, 559 and 561 and the Buyer shall be entitled to, without limitation, the liquidation, termination, acceleration, offset, net out and non-avoidability rights afforded to parties to repurchase agreements, securities contracts, and master netting agreements under Sections 362(b)(6), 362(b)(7), 362(b)(27), 362(o), 546(e), 546(f), 546(j), 555, 559 and 561 of the Bankruptcy Code.

(c)The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).

(d)It is understood that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).

(e)Each party agrees that this Agreement is intended to create mutuality of obligations among the parties, and as such, this Agreement constitutes a contract which (i) is between all of the parties and (ii) places each party in the same right and capacity.

SECTION 33.DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

The parties acknowledge that they have been advised that (a) in the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and

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Exchange Commission (“SEC”) under Section 15 of the 1934 Act, the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 do not protect the other party with respect to any Transaction hereunder and (b) in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.

SECTION 34.CONFLICTS

In the event of any conflict between the terms of this Agreement, any other Program Document and any Transaction Request and Confirmation, the documents shall control in the following order of priority: first, the terms of the Transaction Request and Confirmation shall prevail, then the terms of the Pricing Letter shall prevail, then the terms of this Agreement shall prevail, and then the terms of the other Program Document shall prevail.

SECTION 35.MISCELLANEOUS

(a)Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. Delivery of an executed counterpart of a signature page of this Agreement in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Agreement.

(b)Captions. The captions and headings appearing herein are for included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.

(c)Acknowledgment. Each Seller Party hereby acknowledges that (i) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Program Documents; (ii) Buyer has no fiduciary relationship to any Seller Party; and (iii) no joint venture exists between Buyer and any Seller Party.

(d)Documents Mutually Drafted. Seller Parties and Buyer agree that this Agreement each other Program Document prepared in connection with the Transactions 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.

(e)Amendments. This Agreement and each other Program Document may be amended from time to time only by prior written agreement of Buyer and Seller.

(f)Authorizations. Any of the Persons whose signatures and titles appear on Schedule 2 are authorized, acting singly, to act for such Seller Party, under this Agreement. Any of the Persons whose signatures and titles appear on Schedule 2 are authorized, acting singly, to act for Buyer under this Agreement.

SECTION 36.GENERAL INTERPRETIVE PRINCIPLES

For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) 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; (b) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally

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accepted accounting principles; (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; (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 Paragraphs and other subdivisions; (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; (f) the term “include” or “including” shall mean without limitation by reason of enumeration; (g) all times specified herein or in any other Program Document (unless expressly specified otherwise) are local times in New York, New York unless otherwise stated; and (h) all references herein or in any Program Document to “good faith” means good faith as defined in Section 1-201(19) of the UCC as in effect in the State of New York.

[THIS SPACE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date set forth above.

BUYER:

UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York

By:    /s/ Michael Zoccoli    
Name: Michael Zoccoli
Title: Executive Director

By:    /s/ Andrew Lisa    
Name: Andrew Lisa
Title: Associate Director

Address for Notices:

Michael Zoccoli
Executive Director
UBS Investment Bank
1285 Avenue of the Americas
New York, New York 10019

Email: michael.zoccoli@ubs.com

With a copy to:

Chad Eisenberger
Executive Director & Counsel
UBS Business Solutions LLC
1285 Avenue of the Americas
New York, New York 10019
E-mail: chad.eisenberger@ubs.com

Signature Page to Uncommitted Master Repurchase Agreement

USActive 54634370.26

SELLER:

TERRA MORTGAGE CAPITAL III, LLC, as Seller

By:    Gregory Pinkus    
Name: Gregory PInkus
Title: Authorized Signatory

Address for Notices:

550 Fifth Avenue

6th Floor

New York, NY 10036
Emails: AssetManagement@mavikcapital.com; accounting@mavikcapital.com; greg@mavikcapital.com; don@mavikcapital.com; vik@mavikcapital.com; mikef@mavikcapital.com

With a copy to:

Kirkland & Ellis LLP

300 N LaSalle

Chicago, IL 60654

Attn: Rachel Brown

Email: Rachel.brown@kirkland.com

Signature Page to Uncommitted Master Repurchase Agreement

SCHEDULE 1

REPRESENTATIONS AND WARRANTIES
REGARDING EACH INDIVIDUAL PURCHASED ASSET THAT IS A
COMMERCIAL MORTGAGE LOAN

With respect to each Purchased Asset that is a Commercial Mortgage Loan, Seller hereby represents and warrants, as of the date herein specified or, if no such date is specified, as of the Purchase Date, that; provided that such representations and warranties with respect to any Purchased Asset shall be deemed to be modified by any Approved Exceptions Report with respect to such Purchased Asset:

1.Whole Loan; Ownership of Purchased Assets. Except with respect to any Purchased Asset that is a Participation Interest, each Purchased Asset is a whole loan and not a Participation Interest in a Mortgage Loan. Each Participation Interest is a senior portion (or a pari passu portion of a senior portion) of a whole Mortgage Loan evidenced by a senior note. At the time of the sale, transfer and assignment to Buyer, no Mortgage Note or Mortgage was subject to any assignment (other than assignments to Seller), participation (other than with respect to any Purchased Asset that is a Participation Interest) or pledge, and Seller had good title to, and was the sole record, beneficial owner of, each Purchased Asset free and clear of any and all Liens, charges, pledges, encumbrances, participations (other than with respect to a Purchased Asset that is a Participation Interest), any other ownership interests (other than with respect to a Purchased Asset that is a Participation Interest) on, in or to such Purchased Asset other than any servicing rights appointment or similar agreement. Seller has full right and authority to sell, assign and transfer each Purchased Asset, and, upon the completion of the assignee information therein and Buyer’s countersignature where applicable, the assignment to Buyer constitutes a legal, valid and binding assignment of such Purchased Asset free and clear of any and all Liens, pledges, charges or security interests of any nature encumbering such Purchased Asset.

2.Loan Document Status. Each related Mortgage Note, Mortgage, Assignment of Leases (if a separate instrument), guaranty and other agreement executed by or on behalf of the related Mortgagor, guarantor or other obligor in connection with such Purchased Asset is the legal, valid and binding obligation of the related Mortgagor, guarantor or other obligor (subject to any non-recourse provisions contained in any of the foregoing agreements and any applicable state anti-deficiency, one action, or market value limit deficiency legislation), as applicable, and is enforceable in accordance with its terms, except (i) as such enforcement may be limited by (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and (ii) those certain provisions in such Purchased Asset Documents (including, without limitation, provisions requiring the payment of default interest, late fees or prepayment/yield maintenance fees, charges and/or premiums) are, or may be, further limited or rendered unenforceable by or under applicable law, but (subject to the limitations set forth in clause (i) above) such limitations or unenforceability will not render such Purchased Asset Documents invalid as a whole or materially interfere with the mortgagee’s realization of the principal benefits and/or security provided thereby (clauses (i) and (ii) collectively, the “Standard Qualifications”).

Except as set forth in the immediately preceding sentences, there is no valid offset, defense, counterclaim or right of rescission available to the related Mortgagor with respect to any of the related Mortgage Notes, Mortgages or other Purchased Asset Documents, including, without limitation, any such valid offset, defense, counterclaim or right based on intentional fraud by Seller in connection with the origination of the Purchased Asset, that would

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deny the mortgagee the principal benefits intended to be provided by the Mortgage Note, Mortgage or other Purchased Asset Documents.

3.Mortgage Provisions. The Purchased Asset Documents for each Purchased Asset contain provisions that render the rights and remedies of the holder thereof adequate for the practical realization against the Mortgaged Property of the principal benefits of the security intended to be provided thereby, including realization by judicial or, if applicable, non-judicial foreclosure subject to the limitations set forth in the Standard Qualifications.

4.Mortgage Status; Waivers and Modifications. Since origination and except by written instruments set forth in the related Mortgage Asset File (a) the material terms of such Mortgage, Mortgage Note, Purchased Asset guaranty, and related Purchased Asset Documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect that could be reasonably expected to have a material adverse effect on such Mortgage Loan; (b) no related Mortgaged Property or any portion thereof has been released from the lien of the related Mortgage in any manner which materially interferes with the security intended to be provided by such Mortgage or the use or operation of the remaining portion of such Mortgaged Property; and (c) neither the related Mortgagor nor the related guarantor has been released from its material obligations under the Purchased Asset. With respect to each Purchased Asset, except as contained in a written document included in the related Mortgage Asset File, there have been no modifications, amendments or waivers, that could be reasonably expected to have a material adverse effect on such Purchased Asset consented to by Seller on or after the Purchase Date.

5.Hospitality Provisions. The Purchased Asset Documents for each Purchased Asset that is secured by a hospitality property operated pursuant to a franchise or license agreement includes an executed comfort letter or similar agreement signed by the related Mortgagor and franchisor or licensor of such property that, subject to the applicable terms of such franchise or license agreement and comfort letter or similar agreement, is enforceable by the holder of the Purchased Asset against such franchisor or licensor either (A) directly or as an assignee of the originator, or (B) upon Seller’s or its designee’s providing notice of the transfer of the Purchased Asset in accordance with the terms of such executed comfort letter or similar agreement. The Mortgage or related security agreement for each Purchased Asset secured by a hospitality property creates a security interest in the revenues of such Mortgaged Property for which a UCC financing statement has been filed in the appropriate filing office. For the avoidance of doubt, no representation is made as to the perfection of any security interest in revenues to the extent that possession or control of such items or actions other than the filing of Uniform Commercial Code financing statements is required to effect such perfection.

6.Lien; Valid Assignment. Subject to the Standard Qualifications, each Assignment of Mortgage and assignment of Assignment of Leases from Seller constitutes a legal, valid and binding assignment from Seller. Each related Mortgage and Assignment of Leases is freely assignable without the consent of the related Mortgagor. Each related Mortgage is a legal, valid and enforceable first lien on the related Mortgagor’s fee (or if identified on the Transaction Request and Confirmation, leasehold) interest in the Mortgaged Property in the principal amount of such Purchased Asset or allocated loan amount (subject only to Permitted Encumbrances (as defined below) and the exceptions to paragraph (7) set forth in part 1 of this Schedule 1 (each such exception, a “Title Exception”)), except as the enforcement thereof may be limited by the Standard Qualifications. Such Mortgaged Property (subject to and excepting Permitted Encumbrances and the Title Exceptions) as of origination was, and as of the Purchase Date, to the best knowledge of Seller (as defined in the Agreement to which this Schedule 1 is attached), is free and clear of any recorded mechanics’ liens, recorded materialmen’s liens and other recorded encumbrances which are prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy

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(as described below), and, to Seller’s best knowledge and subject to the rights of tenants (as tenants only) (subject to and excepting Permitted Encumbrances and the Title Exceptions), no rights exist which under law could give rise to any such lien or encumbrance that would be prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy (as described below). Notwithstanding anything herein to the contrary, no representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of UCC financing statements is required in order to effect such perfection.

7.Permitted Liens; Title Insurance. Each Mortgaged Property securing a Purchased Asset is covered by an American Land Title Association loan title insurance policy or a comparable form of loan title insurance policy approved for use in the applicable jurisdiction (or, if such policy is yet to be issued, by a pro forma policy, a preliminary title policy with escrow instructions or a “marked up” commitment, in each case binding on the title insurer) (the “Title Policy”) in the original principal amount of such Purchased Asset (or with respect to a Purchased Asset secured by multiple properties, an amount equal to at least the allocated loan amount with respect to the Title Policy for each such property) after all advances of principal (including any advances held in escrow or reserves), that insures for the benefit of the owner of the Indebtedness secured by the Mortgage, the first priority lien of the Mortgage, which lien is subject only to (a) the lien of current real property taxes, water charges, sewer rents and assessments not yet due and payable; (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record; (c) the exceptions (general and specific) and exclusions set forth in such Title Policy or appearing of record; (d) other matters to which like properties are commonly subject; (e) the rights of tenants (as tenants only) under leases (including subleases) pertaining to the related Mortgaged Property and condominium declarations; and (f) if the related Purchased Asset is cross-collateralized and cross-defaulted with another Purchased Asset (each, a “Crossed Mortgage Loan”), the lien of the Mortgage for another Purchased Asset that is cross-collateralized and cross-defaulted with such Crossed Mortgage Loan, provided that none of which items (a) through (f), individually or in the aggregate, materially and adversely interferes with the value or current use of the Mortgaged Property or the security intended to be provided by such Mortgage or the Mortgagor’s ability to pay its obligations when they become due (collectively, the “Permitted Encumbrances”). Except as contemplated by clause (f) of the preceding sentence, none of the Permitted Encumbrances are mortgage liens that are senior to or coordinate and co-equal with the lien of the related Mortgage. Such Title Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, all premiums thereon have been paid and no claims have been made by Seller thereunder and no claims have been paid thereunder. Neither Seller, nor to the best knowledge of Seller, any other holder of the Purchased Asset, has done, by act or omission, anything that would materially impair the coverage under such Title Policy.

8.Junior Liens. It being understood that B notes secured by the same Mortgage as a Purchased Asset are not subordinate mortgages or junior liens, except for any Crossed Mortgage Loan, there are, as of origination, and to the best knowledge of Seller, as of the Purchase Date, no subordinate mortgages or junior liens securing the payment of money encumbering the related Mortgaged Property (other than Permitted Encumbrances and the Title Exceptions, taxes and assessments, mechanics and materialmen’s liens (which are the subject of the representation in paragraph (5) above), and equipment and other personal property financing. Seller has no knowledge of any mezzanine debt secured directly by interests in the related Mortgagor.

9.Assignments of Leases. There exists as part of the related Mortgage Asset File an Assignment of Leases (either as a separate instrument or incorporated into the related Mortgage). Subject to the Permitted Encumbrances and the Title Exceptions, each related Assignment of Leases creates a valid first-priority collateral assignment of, or a valid first-priority lien or

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security interest in, rents and certain rights under the related lease or leases, subject only to a license granted to the related Mortgagor to exercise certain rights and to perform certain obligations of the lessor under such lease or leases, including the right to operate the related leased property, except as the enforcement thereof may be limited by the Standard Qualifications. The related Mortgage or related Assignment of Leases, subject to applicable law, provides that, upon an event of default under the Purchased Asset, a receiver is permitted to be appointed for the collection of rents or for the related mortgagee to enter into possession to collect the rents or for rents to be paid directly to the mortgagee.

10.UCC Filings. If the related Mortgaged Property is operated as a hospitality property, Seller has filed and/or recorded or caused to be filed and/or recorded (or, if not filed and/or recorded, have been submitted in proper form for filing and/or recording), UCC financing statements in the appropriate public filing and/or recording offices necessary at the time of the origination of the Purchased Asset to perfect a valid security interest in all items of physical personal property reasonably necessary to operate such Mortgaged Property owned by such Mortgagor and located on the related Mortgaged Property (other than any non-material personal property, any personal property subject to a purchase money security interest, a sale and leaseback financing arrangement as permitted under the terms of the related Purchased Asset Documents or any other personal property leases applicable to such personal property), to the extent perfection may be effected pursuant to applicable law by recording or filing, as the case may be. Subject to the Standard Qualifications, each related Mortgage (or equivalent document) creates a valid and enforceable lien and security interest on the items of personalty described above. No representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of UCC financing statements are required in order to effect such perfection.

11.Condition of Property. Seller or the originator of the Purchased Asset inspected or caused to be inspected each related Mortgaged Property within six (6) months of origination of the Purchased Asset and within twelve (12) months of the Purchase Date.

An engineering report or property condition assessment was prepared in connection with the origination of each Purchased Asset no more than twelve months prior to the Purchase Date. To Seller’s knowledge, based solely upon due diligence customarily performed in connection with the origination of comparable Purchased Assets, as of the Purchase Date, each related Mortgaged Property was free and clear of any material damage (other than (i) any damage or deficiency that is estimated to cost less than $50,000 to repair, (ii) any deferred maintenance for which escrows were established at origination and (iii) any damage fully covered by insurance) that would affect materially and adversely the use or value of such Mortgaged Property as security for the Purchased Asset.

12.Taxes and Assessments. All real estate taxes, governmental assessments and other similar outstanding governmental charges (including, without limitation, water and sewage charges), or installments thereof, that could be a lien on the related Mortgaged Property that would be of equal or superior priority to the lien of the Mortgage and that prior to the Purchase Date have become delinquent in respect of each related Mortgaged Property have been paid, or an escrow of funds has been established in an amount sufficient to cover such payments and reasonably estimated interest and penalties, if any, thereon. For purposes of this representation and warranty, real estate taxes and governmental assessments and other outstanding governmental charges and installments thereof shall not be considered delinquent until the earlier of (a) the date on which interest and/or penalties would first be payable thereon and (b) the date on which enforcement action is entitled to be taken by the related taxing authority.

13.Condemnation. As of the date of origination and to Seller’s knowledge as of the Purchase Date, there is no proceeding pending, and, to Seller’s knowledge as of the date of

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origination and as of the Purchase Date, there is no proceeding threatened, for the total or partial condemnation of such Mortgaged Property that would have a material adverse effect on the value, use or operation of the Mortgaged Property.

14.Actions Concerning Mortgage Loan. To Seller’s knowledge, based on evaluation of the Title Policy (as defined in paragraph 7), an engineering report or property condition assessment as described in paragraph 11, applicable local law compliance materials as described in paragraph 25, reasonable and customary bankruptcy, civil records, UCC-1, and judgment searches of the borrowers and guarantors, and the ESA (as defined in paragraph 41), on and as of the date of origination and as of the Purchase Date, there was no pending or filed action, suit or proceeding involving any Mortgagor, guarantor, or Mortgagor’s interest in the Mortgaged Property, an adverse outcome of which would reasonably be expected to materially and adversely affect (a) such Mortgagor’s title to the Mortgaged Property, (b) the validity or enforceability of the Mortgage, (c) such Mortgagor’s ability to perform under the related Purchased Asset, (d) such guarantor’s ability to perform under the related guaranty, (e) the principal benefit of the security intended to be provided by the Purchased Asset Documents or (f) the current principal use of the Mortgaged Property.

15.Escrow Deposits. All escrow deposits and payments required to be escrowed with lender pursuant to each Purchased Asset are in the possession, or under the control, of Seller or its servicer, and there are no deficiencies (subject to any applicable grace or cure periods) in connection therewith, and all such escrows and deposits (or the right thereto) that are required to be escrowed with lender under the related Purchased Asset Documents are being conveyed by Seller to Buyer or its servicer.

16.No Holdbacks. The principal amount of the Purchased Asset stated on the Transaction Request and Confirmation has been fully disbursed as of the Purchase Date and there is no requirement for future advances thereunder (except in those cases where the full amount of the Purchased Asset has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the satisfaction of certain conditions relating to leasing, repairs or other matters with respect to the related Mortgaged Property, the Mortgagor or other considerations determined by Seller to merit such holdback).

17.Insurance. Each related Mortgaged Property is, and is required pursuant to the related Mortgage to be, insured by a property insurance policy providing coverage for loss in accordance with coverage found under a “special cause of loss form” or “all risk form” that includes replacement cost valuation issued by an insurer meeting the requirements of the related Purchased Asset Documents and having a claims-paying or financial strength rating of the Insurance Rating Requirements, in an amount (subject to a customary deductible) not less than the lesser of (1) the original principal balance of the Purchased Asset and (2) the full insurable value on a replacement cost basis of the improvements, furniture, furnishings, fixtures and equipment owned by the Mortgagor and included in the Mortgaged Property (with no deduction for physical depreciation), but, in any event, not less than the amount necessary or containing such endorsements as are necessary to avoid the operation of any coinsurance provisions with respect to the related Mortgaged Property.

Each related Mortgaged Property is also covered, and required to be covered pursuant to the related Purchased Asset Documents, by business interruption or rental loss insurance which (subject to a customary deductible) covers a period of not less than 12 months (or with respect to each Purchased Asset on a single asset with a principal balance of $50 million or more, 18 months).

If any material part of the improvements, exclusive of a parking lot, located on a Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency

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Management Agency as having special flood hazards, the related Mortgagor is required to maintain insurance in an amount that is at least equal to the lesser of (1) the outstanding principal balance of the Purchased Asset and (2) the maximum amount of such insurance available under the National Flood Insurance Program.

If the Mortgaged Property is located within 25 miles of the coast of the Gulf of Mexico or the Atlantic coast of Florida, Georgia, South Carolina or North Carolina, the related Mortgagor is required to maintain coverage for windstorm and/or windstorm related perils and/or “named storms”.

The Mortgaged Property is covered, and required to be covered pursuant to the related Purchased Asset Documents, by a commercial general liability insurance policy issued by an insurer meeting the Insurance Rating Requirements including coverage for property damage, contractual damage and personal injury (including bodily injury and death) in amounts as are generally required by Seller for loans originated for securitization, and in any event not less than $1 million per occurrence and $2 million in the aggregate.

An architectural or engineering consultant has performed an analysis of each of the Mortgaged Properties located in seismic zones 3 or 4 in order to evaluate the structural and seismic condition of such property, for the sole purpose of assessing either the scenario expected limit (“SEL”) or the probable maximum loss (“PML”) for the Mortgaged Property in the event of an earthquake. In such instance, the SEL or PML, as applicable, was based on a 475-year return period, an exposure period of 50 years and a 10% probability of exceedance. If the resulting report concluded that the SEL or PML, as applicable, would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Mortgaged Property was obtained by an insurer rated at least “A:VII” by A.M. Best Company or “A3” (or the equivalent) from Moody’s or “A-” by S&P, in an amount not less than 100% of the SEL or PML, as applicable.

The Purchased Asset Documents require insurance proceeds in respect of a property loss to be applied either (a) to the repair or restoration of all or part of the related Mortgaged Property, with respect to all property losses in excess of 5% of the then outstanding principal amount of the related Purchased Asset, the lender (or a trustee appointed by it) having the right to hold and disburse such proceeds as the repair or restoration progresses, or (b) to the payment of the outstanding principal balance of such Purchased Asset together with any accrued interest thereon.

All premiums on all insurance policies referred to in this section required to be paid as of the Purchase Date have been paid, and such insurance policies name the lender under the Purchased Asset and its successors and assigns as a loss payee under a mortgagee endorsement clause or, in the case of the general liability insurance policy, as named or additional insured. Such insurance policies will inure to the benefit of Buyer. Each related Purchased Asset obligates the related Mortgagor to maintain all such insurance and, at such Mortgagor’s failure to do so, authorizes the lender to maintain such insurance at the Mortgagor’s cost and expense and to charge such Mortgagor for related premiums. All such insurance policies (other than commercial liability policies) require at least ten (10) days’ prior notice to the lender of termination or cancellation arising because of nonpayment of a premium and at least thirty (30) days prior notice to the lender of termination or cancellation (or such lesser period, not less than ten (10) days, as may be required by applicable law) arising for any reason other than non-payment of a premium and no such notice has been received by Seller.

18.Access; Utilities; Separate Tax Lots. Each Mortgaged Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has access via an irrevocable easement or irrevocable right of way permitting ingress and egress to/from a public

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road, (b) is served by or has uninhibited access rights to public or private water and sewer (or well and septic) and all required utilities, all of which are appropriate for the current use of the Mortgaged Property, and (c) constitutes one or more separate tax parcels which do not include any property which is not part of the Mortgaged Property or is subject to an endorsement under the related Title Policy insuring the Mortgaged Property, or in certain cases, an application has been, or will be, made to the applicable governing authority for creation of separate tax lots, in which case the Purchased Asset requires the Mortgagor to escrow an amount sufficient to pay taxes for the existing tax parcel of which the Mortgaged Property is a part until the separate tax lots are created or the non-recourse carveout guarantor under the Purchased Asset has indemnified the mortgagee for any loss suffered in connection therewith.

19.No Encroachments. To Seller’s knowledge based solely on surveys obtained in connection with origination (which may have been a previously existing “as built” survey) and the lender’s Title Policy (or, if such policy is not yet issued, a pro forma title policy, a preliminary title policy with escrow instructions or a “marked up” commitment) obtained in connection with the origination of each Purchased Asset, all material improvements that were included for the purpose of determining the Appraised Value of the related Mortgaged Property at the time of the origination of such Purchased Asset are within the boundaries of the related Mortgaged Property, except encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy. No improvements on adjoining parcels encroach onto the related Mortgaged Property except for encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy. No material improvements encroach upon any easements except for encroachments the removal of which would not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements have been obtained under the Title Policy.

20.No Contingent Interest or Equity Participation. No Purchased Asset has a shared appreciation feature, any other contingent interest feature or a negative amortization feature (except that an ARD Loan (as defined below) may provide for the accrual of the portion of interest in excess of the rate in effect prior to the Anticipated Repayment Date (as defined below)) or an equity participation by Seller.

21.[reserved].

22.Compliance with Usury Laws. The interest rate (exclusive of any default interest, late charges, yield maintenance charges, exit fees, or prepayment premiums) of such Purchased Asset complied as of the date of origination with, or was exempt from, applicable state or federal laws, regulations and other requirements pertaining to usury.

23.Authorized to do Business. To the extent required under applicable law, as of the Purchase Date or as of the date that such entity held the Mortgage Note, each holder of the Mortgage Note was authorized to transact and do business in the jurisdiction in which each related Mortgaged Property is located, or the failure to be so authorized does not materially and adversely affect the enforceability of such Purchased Asset by the trust.

24.Trustee under Deed of Trust. With respect to each Mortgage which is a deed of trust, as of the date of origination and, to Seller’s knowledge, as of the Purchase Date, a trustee, duly qualified under applicable law to serve as such, currently so serves and is named in the deed of trust or has been substituted in accordance with the Mortgage and applicable law or may be substituted in accordance with the Mortgage and applicable law by the related mortgagee.

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25.Local Law Compliance. To Seller’s knowledge, based upon any of a letter from any Governmental Authorities, a legal opinion, an architect’s letter, a zoning consultant’s report, an endorsement to the related Title Policy, or other affirmative investigation of local law compliance consistent with the investigation conducted by Seller for similar commercial, multifamily and manufactured housing community mortgage loans intended for securitization, with respect to the improvements located on or forming part of each Mortgaged Property securing a Purchased Asset as of the date of origination of such Purchased Asset and as of the Purchase Date, there are no material violations of applicable zoning ordinances, building codes and land laws (collectively “Zoning Regulations”) other than those which (i) constitute a legal non-conforming use or structure, as to which the Mortgaged Property may be restored or repaired to the full extent necessary to maintain the use of the structure immediately prior to a casualty or the inability to restore or repair to the full extent necessary to maintain the use or structure immediately prior to the casualty would not materially and adversely affect the use or operation of the Mortgaged Property, (ii) are insured by the Title Policy or other insurance policy, (iii) are insured by law and ordinance insurance coverage in amounts customarily required by Seller for loans originated for securitization that provides coverage for additional costs to rebuild and/or repair the property to current Zoning Regulations or (iv) would not have a material adverse effect on the Purchased Asset. The terms of the Purchased Asset Documents require the Mortgagor to comply in all material respects with all applicable governmental regulations, zoning and building laws.

26.Licenses and Permits. Each Mortgagor covenants in the Purchased Asset Documents that it shall keep all material licenses, permits and applicable governmental authorizations necessary for its operation of the Mortgaged Property in full force and effect, and to Seller’s knowledge based upon a letter from any government authorities or other affirmative investigation of local law compliance consistent with the investigation conducted by Seller for similar commercial, multifamily and manufactured housing community mortgage loans intended for securitization, all such material licenses, permits and applicable governmental authorizations are in effect. The Purchased Asset requires the related Mortgagor to be qualified to do business in the jurisdiction in which the related Mortgaged Property is located.

27.Recourse Obligations. The Purchased Asset Documents for each Purchased Asset provide that such Purchased Asset is non-recourse to the related parties thereto except that (a) the related Mortgagor and at least one individual or entity shall be fully liable for actual losses, liabilities, costs and damages arising from certain acts of the related Mortgagor and/or its principals specified in the related Purchased Asset Documents, which acts generally include the following: (i) acts of fraud or intentional material misrepresentation, (ii) misappropriation of rents (following an Event of Default), insurance proceeds or condemnation awards, (iii) intentional material physical waste of the Mortgaged Property, and (iv) any breach of the environmental covenants contained in the related Purchased Asset Documents, and (b) the Purchased Asset shall become full recourse to the related Mortgagor and at least one individual or entity, if the related Mortgagor files a voluntary petition under federal or state bankruptcy or Insolvency Law.

28.Mortgage Releases. The terms of the related Mortgage or related Purchased Asset Documents do not provide for release of any material portion of the Mortgaged Property from the lien of the Mortgage except (a) a partial release, accompanied by principal repayment, or a partial Defeasance, (as defined in paragraph (33)) of not less than a specified percentage at least equal to the lesser of (i) 110% of the related allocated loan amount of such portion of the Mortgaged Property and (ii) the outstanding principal balance of the Purchased Asset, (b) upon payment in full of such Purchased Asset, (c) upon a Defeasance (as defined in paragraph (33)), (d) releases of out-parcels that are unimproved or other portions of the Mortgaged Property which will not have a material adverse effect on the underwritten value of the Mortgaged Property and which were not afforded any material value in the appraisal obtained at the

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origination of the Purchased Asset and are not necessary for physical access to the Mortgaged Property or compliance with zoning requirements, or (e) as required pursuant to an order of condemnation or taking by a State or any political subdivision or authority thereof.

29.Financial Reporting and Rent Rolls. The Purchased Asset Documents for each Purchased Asset require the Mortgagor to provide the owner or holder of the Mortgage with quarterly (other than for single-tenant properties) and annual operating statements, and quarterly or monthly (other than for single-tenant properties) rent rolls for properties that have leases contributing more than 5% of the in-place base rent and annual financial statements, which annual financial statements with respect to each Purchased Asset with more than one borrower are in the form of an annual combined balance sheet of the borrower entities (and no other entities), together with the related combined statements of operations, members’ capital and cash flows, including a combining balance sheet and statement of income for the Mortgaged Properties on a combined basis.

30.Acts of Terrorism Exclusion. With respect to each Purchased Asset with a principal balance on the related Purchase Date that exceeds $20 million, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) do not specifically exclude Acts of Terrorism, as defined in the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2007 and further amended by the Terrorism Risk Insurance Program Reauthorization Act of 2015 (collectively referred to as “TRIA”), from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each other Purchased Asset, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) did not, as of the date of origination of the Purchased Asset, and, to Seller’s knowledge, do not, as of the Purchase Date, specifically exclude Acts of Terrorism, as defined in TRIA, from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each Purchased Asset, the related Purchased Asset Documents generally only require that the related borrower take commercially reasonable efforts to obtain insurance against damage resulting from Acts of Terrorism and other acts of sabotage unless lack of such insurance will result in a downgrade of the ratings of the related Purchased Asset. With respect to each Purchased Asset, the related Purchased Asset Documents do not expressly waive or prohibit the mortgagee from requiring coverage for Acts of Terrorism, as defined in TRIA, or damages related thereto except to the extent that any right to require such coverage may be limited by commercial availability on commercially reasonable terms; provided, however, that if TRIA or a similar or subsequent statute is not in effect, then, provided that terrorism insurance is commercially available, the Mortgagor under each Purchased Asset is required to carry terrorism insurance, but in such event the Mortgagor shall not be required to spend on terrorism insurance coverage more than two times the amount of the insurance premium that is payable in respect of the property and business interruption/rental loss insurance required under the related Purchased Asset Documents (without giving effect to the cost of terrorism and earthquake components of such casualty and business interruption/rental loss insurance) at such time, and if the cost of terrorism insurance exceeds such amount, the Mortgagor is required to purchase the maximum amount of terrorism insurance available with funds equal to such amount.

31.Due on Sale or Encumbrance. Subject to specific exceptions set forth below, each Purchased Asset contains a “due on sale” or other such provision for the acceleration of the payment of the unpaid principal balance of such Purchased Asset if, without the consent of the holder of the Mortgage (which consent, in some cases, may not be unreasonably withheld) and/or complying with the requirements of the related Purchased Asset Documents (which provide for transfers without the consent of the lender which are customarily acceptable to Seller lending on the security of property comparable to the related Mortgaged Property, including, without limitation, transfers of worn-out or obsolete furnishings, fixtures, or equipment promptly

    Sched. 1-9

replaced with property of equivalent value and functionality and transfers by leases entered into in accordance with the Purchased Asset Documents), (a) the related Mortgaged Property, or any equity interest of greater than 50% in the related Mortgagor, is directly or indirectly pledged, transferred or sold, other than as related to (i) family and estate planning transfers or transfers upon death or legal incapacity, (ii) transfers to certain affiliates as defined in the related Purchased Asset Documents, (iii) transfers that do not result in a Change in Control of the related borrower or transfers of passive interests so long as the guarantor retains Control, (iv) transfers to another holder of direct or indirect equity in the Mortgagor, a specific Person designated in the related Purchased Asset Documents or a Person satisfying specific criteria identified in the related Purchased Asset Documents, such as a qualified equityholder, (v) transfers of stock or similar equity units in publicly traded companies or (vi) a substitution or release of collateral within the parameters of paragraphs (28) and (33) herein by reason of any mezzanine debt that existed at the origination of the related Purchased Asset (and which is disclosed in writing to Buyer and approved by Buyer in its sole discretion prior to the Purchase Date of such Purchased Asset), or (b) the related Mortgaged Property is encumbered with a subordinate lien or security interest against the related Mortgaged Property, other than (i) any subordinate debt that existed at origination and is permitted under the related Purchased Asset Documents, (ii) purchase money security interests, (iii) any Crossed Mortgage Loan, or (iv) Permitted Encumbrances. For purposes of the foregoing representation, “Control” means the power to direct the management and policies of an entity, directly or indirectly, whether through the ownership of voting securities or other beneficial interests, by contract or otherwise.

32.Single-Purpose Entity. Each Purchased Asset requires the Mortgagor to be a Single-Purpose Entity for at least as long as the Purchased Asset is outstanding. Both the Purchased Asset Documents and the organizational documents of the Mortgagor with respect to each Purchased Asset with principal balance on the related Purchase Date that exceeds $5 million provide that the Mortgagor is a Single-Purpose Entity, and each Purchased Asset with a principal balance on the related Purchase Date that exceeds $20 million has a counsel’s opinion regarding non-consolidation of the Mortgagor. For this purpose, a “Single-Purpose Entity” shall mean an entity, other than an individual, whose organizational documents (or if the Purchased Asset has a principal balance on the related Purchase Date that is $5 million or less, its organizational documents or the related Purchased Asset Documents) provide substantially to the effect that it was formed or organized solely for the purpose of owning and operating one or more of the Mortgaged Properties securing the Purchased Assets and prohibit it from engaging in any business unrelated to such Mortgaged Property or Properties, and whose organizational documents further provide, or which entity represented in the related Purchased Asset Documents, substantially to the effect that it does not have any assets other than those related to its interest in and operation of such Mortgaged Property or Properties, or any Indebtedness other than as permitted by the related Mortgage(s) or the other related Purchased Asset Documents, that it has its own books and records and accounts separate and apart from those of any other person (other than a Mortgagor for a Crossed Mortgage Loan), and that it holds itself out as a legal entity, separate and apart from any other person or entity.

33.Defeasance. With respect to any Purchased Asset that, pursuant to the Purchased Asset Documents, can be defeased (a “Defeasance”), (i) the Purchased Asset Documents provide for Defeasance as a unilateral right of the Mortgagor, subject to satisfaction of conditions specified in the Purchased Asset Documents; (ii) the Purchased Asset cannot be defeased within two years after the closing date of the related securitization of such Purchased Asset; (iii) the Mortgagor is permitted to pledge only United States “government securities” within the meaning of Section 1.860G-2(a)(8)(ii) of the Treasury Regulations, the revenues from which will, in the case of a full Defeasance, be sufficient to make all scheduled payments under the Purchased Asset when due, including the entire remaining principal balance on the maturity date (or on or after the first date on which payment may be made without payment of a yield maintenance charge or prepayment premium) or, if the Purchased Asset is an ARD Loan, the entire principal

    Sched. 1-10

balance outstanding on the Anticipated Repayment Date (or on or after the first date on which payment may be made without payment of a yield maintenance charge or prepayment premium), and if the Purchased Asset permits partial releases of real property in connection with partial Defeasance, the revenues from the collateral will be sufficient to pay all such scheduled payments calculated on a principal amount equal to a specified percentage at least equal to the lesser of (a) 110% of the allocated loan amount for the real property to be released and (b) the outstanding principal balance of the Purchased Asset; (iv) the Mortgagor is required to provide a certification from an independent certified public accountant that the collateral is sufficient to make all scheduled payments under the Mortgage Note as set forth in clause (iii) above; (v) if the Mortgagor would continue to own assets in addition to the Defeasance collateral, the portion of the Purchased Asset secured by Defeasance collateral is required to be assumed (or the mortgagee may require such assumption) by a Single-Purpose Entity; (vi) the Mortgagor is required to provide an opinion of counsel that the mortgagee has a perfected security interest in such collateral prior to any other claim or interest; and (vii) the Mortgagor is required to pay all rating agency fees associated with defeasance (if rating confirmation is a specific condition precedent thereto) and all other reasonable expenses associated with Defeasance, including, but not limited to, accountant’s fees and opinions of counsel.

34.Ground Leases. For purposes of this Agreement, a “Ground Lease” shall mean a lease creating a leasehold estate in real property where the fee owner as the ground lessor or sub ground lessor conveys for a term or terms of years its entire interest in the land and buildings and other improvements, if any, comprising the premises demised under such lease to the ground lessee (who may, in certain circumstances, own the building and improvements on the land), subject to the reversionary interest of the ground lessor as fee owner and does not include industrial development agency (IDA) or similar leases for purposes of conferring a tax abatement or other benefit.

With respect to any Purchased Asset where the Purchased Asset is secured by a leasehold estate under a Ground Lease in whole or in part, and the related Mortgage does not also encumber the related lessor’s fee interest in such Mortgaged Property, based upon the terms of the Ground Lease and any estoppel or other agreement received from the ground lessor in favor of Seller, its successors and assigns, Seller represents and warrants that:

(a)The Ground Lease or a memorandum regarding such Ground Lease has been duly recorded or submitted for recordation in a form that is acceptable for recording in the applicable jurisdiction. The Ground Lease or an estoppel or other agreement received from the ground lessor permits the interest of the lessee to be encumbered by the related Mortgage and does not restrict the use of the related Mortgaged Property by such lessee, its successors or assigns in a manner that would materially adversely affect the security provided by the related Mortgage;

(b)The lessor under such Ground Lease has agreed in a writing included in the related Mortgage Asset File (or in such Ground Lease) that the Ground Lease may not be amended or modified, or canceled or terminated by agreement of lessor and lessee, without the prior written consent of the lender (except termination or cancellation if (i) notice of a default under the Ground Lease is provided to lender and (ii) such default is curable by lender as provided in the Ground Lease but remains uncured beyond the applicable cure period), and no such consent has been granted by Seller since the origination of the Purchased Asset except as reflected in any written instruments which are included in the related Mortgage Asset File;

(c)The Ground Lease has an original term (or an original term plus one or more optional renewal terms, which, under all circumstances, may be exercised, and will be enforceable, by either borrower or the mortgagee) that extends not less than 20

    Sched. 1-11

years beyond the stated maturity of the related Purchased Asset, or 10 years past the stated maturity if such Purchased Asset fully amortizes by the stated maturity (or with respect to a Purchased Asset that accrues on an actual 360 basis, substantially amortizes);

(d)The Ground Lease either (i) is not subject to any liens or encumbrances superior to, or of equal priority with, the Mortgage, except for the related fee interest of the ground lessor and the Permitted Encumbrances, or (ii)  is subject to a subordination, non-disturbance and attornment agreement to which the mortgagee on the lessor’s fee interest in the Mortgaged Property is subject;

(e)The Ground Lease does not place commercially unreasonable restrictions on the identity of the Mortgagee and the Ground Lease is assignable to the holder of the Purchased Asset and its successors and assigns without the consent of the lessor thereunder, and in the event it is so assigned, it is further assignable by the holder of the Purchased Asset and its successors and assigns without the consent of the lessor;

(f)Seller has not received any written notice of material default under or notice of termination of such Ground Lease. To Seller’s knowledge, there is no material default under such Ground Lease and no condition that, but for the passage of time or giving of notice, would result in a material default under the terms of such Ground Lease and to the best knowledge of Seller, such Ground Lease is in full force and effect as of the Purchase Date;

(g)The Ground Lease or ancillary agreement between the lessor and the lessee requires the lessor to give to the lender written notice of any default, and provides that no notice of default or termination is effective against the lender unless such notice is given to the lender;

(h)A lender is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the Ground Lease through legal proceedings) to cure any default under the Ground Lease which is curable after the lender’s receipt of notice of any default before the lessor may terminate the Ground Lease;

(i)The Ground Lease does not impose any restrictions on subletting that would be viewed as commercially unreasonable by Seller in connection with loans originated for securitization;

(j)Under the terms of the Ground Lease, an estoppel or other agreement received from the ground lessor and the related Mortgage (taken together), any related insurance proceeds or the portion of the condemnation award allocable to the ground lessee’s interest (other than (i) de minimis amounts for minor casualties or (ii) in respect of a total or substantially total loss or taking as addressed in clause (k) below) will be applied either to the repair or to restoration of all or part of the related Mortgaged Property with (so long as such proceeds are in excess of the threshold amount specified in the related Mortgage Loan Documents) the lender or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses, or to the payment of the outstanding principal balance of the Purchased Asset, together with any accrued interest;

(k)In the case of a total or substantially total taking or loss, under the terms of the Ground Lease, an estoppel or other agreement and the related Mortgage (taken together), any related insurance proceeds, or portion of the condemnation award

    Sched. 1-12

allocable to ground lessee’s interest in respect of a total or substantially total loss or taking of the related Mortgaged Property to the extent not applied to restoration, will be applied first to the payment of the outstanding principal balance of the Purchased Asset, together with any accrued interest; and

(l)Provided that the lender cures any defaults which are susceptible to being cured, the ground lessor has agreed to enter into a new lease with lender upon termination of the Ground Lease for any reason, including rejection of the Ground Lease in a bankruptcy proceeding.

35.Servicing. The servicing and collection practices used by Seller with respect to the Purchased Asset have been, in all material respects, legal and have met customary industry standards for servicing of similar commercial loans.

36.Origination and Underwriting. The origination practices of Seller (or the related originator if Seller was not the originator) with respect to each Purchased Asset have been, in all material respects, legal and as of the date of its origination, such Purchased Asset and the origination thereof complied in all material respects with, or was exempt from, all requirements of federal, state or local law relating to the origination of such Purchased Asset; provided that such representation and warranty does not address or otherwise cover any matters with respect to federal, state or local law otherwise covered in this Schedule 1.

37.No Material Default; Payment Record. No Purchased Asset has been more than thirty (30) days delinquent, without giving effect to any grace or cure period, in making required payments since origination, and as of the date hereof, no Purchased Asset is more than thirty (30) days delinquent (beyond any applicable grace or cure period) in making required payments as of the Purchase Date. To the best knowledge of Seller, there is (a) no material default, breach, violation or event of acceleration existing under the related Purchased Asset, or (b) no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration, which default, breach, violation or event of acceleration, in the case of either clause (a) or clause (b), materially and adversely affects the value of the Purchased Asset or the value, use or operation of the related Mortgaged Property, provided, however, that this representation and warranty does not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of an exception scheduled to any other representation and warranty made by Seller in this Schedule 1. No Person other than the holder of such Purchased Asset may declare any event of default under the Purchased Asset or accelerate any Indebtedness under the Mortgage Loan Documents.

38.Bankruptcy. As of the date of origination of the related Purchased Asset and to Seller’s knowledge as of the Purchase Date, no Mortgagor, guarantor or tenant occupying a single-tenant property is a debtor in state or federal bankruptcy, insolvency or similar proceeding.

39.Organization of Mortgagor. With respect to each Purchased Asset, in reliance on certified copies of the organizational documents of the Mortgagor delivered by the Mortgagor in connection with the origination of such Purchased Asset, the Mortgagor is an entity organized under the laws of a state of the United States of America, the District of Columbia or the Commonwealth of Puerto Rico. Except with respect to any Crossed Mortgage Loan, no Purchased Asset has a Mortgagor that is an Affiliate of another Mortgagor under another Purchased Asset. (An “Affiliate” for purposes of this paragraph (40) means, a Mortgagor that is under direct or indirect common ownership and control with another Mortgagor.)

    Sched. 1-13

40.Environmental Conditions. A Phase I environmental site assessment (or update of a previous Phase I and or Phase II site assessment) and, with respect to certain Purchased Assets, a Phase II environmental site assessment (collectively, an “ESA”) meeting ASTM requirements conducted by a reputable environmental consultant in connection with such Purchased Asset within 12 months prior to its origination date (or an update of a previous ESA was prepared), and such ESA either (i) did not identify the existence of recognized Environmental Conditions at the related Mortgaged Property or the need for further investigation with respect to any Environmental Condition that was identified, or (ii) if the existence of an Environmental Condition or need for further investigation was indicated in any such ESA, then at least one of the following statements is true: (A) an amount reasonably estimated by a reputable environmental consultant to be sufficient to cover the estimated cost to cure any material noncompliance with applicable Environmental Laws or the Environmental Condition has been escrowed by the related Mortgagor and is held or controlled by the related lender; (B) if the only Environmental Condition relates to the presence of asbestos-containing materials, radon in indoor air, lead based paint or lead in drinking water, and the only recommended action in the ESA is the institution of such a plan, an operations or maintenance plan has been required to be instituted by the related Mortgagor that can reasonably be expected to mitigate the identified risk; (C) the Environmental Condition identified in the related environmental report was remediated or abated in all material respects prior to the date hereof, and, if and as appropriate, a no further action or closure letter was obtained from the applicable governmental regulatory authority (or the Environmental Condition affecting the related Mortgaged Property was otherwise listed by such Governmental Authority as “closed” or a reputable environmental consultant has concluded that no further action is required); (D) a secured creditor environmental policy or a pollution legal liability insurance policy that covers liability for the Environmental Condition was obtained from an insurer rated no less than A- (or the equivalent) by Moody’s, S&P and/or Fitch, Inc.; (E) a party not related to the Mortgagor was identified as the responsible party for such Environmental Condition and such responsible party has financial resources reasonably estimated to be adequate to address the situation; or (F) a party related to the Mortgagor having financial resources reasonably estimated to be adequate to address the situation is required to take action. To Seller’s knowledge, except as set forth in the ESA, there is no Environmental Condition (as such term is defined in ASTM E1527-05 or its successor) at the related Mortgaged Property.

41.Appraisal. The Mortgage Asset File contains an appraisal of the related Mortgaged Property with an appraisal date within six (6) months of the Purchased Asset origination date, and within six (6) months of the Purchase Date. The appraisal is signed by an appraiser who is either a Member of the Appraisal Institute and/or has been licensed and certified to prepare appraisals in the state where the Mortgaged Property is located. Each appraiser has represented in such appraisal or in a supplemental letter that the appraisal satisfies the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation and has certified that such appraiser had no interest, direct or indirect, in the Mortgaged Property or the Mortgagor or in any loan made on the security thereof, and its compensation is not affected by the approval or disapproval of the Purchased Asset.

42.Transaction Request and Confirmation. The information pertaining to each Purchased Asset which is set forth in the Transaction Request and Confirmation is true and correct in all material respects as of the Purchase Date and contains all information required by the Agreement to be contained therein.

43.Cross-Collateralization. No Purchased Asset is cross-collateralized or cross-defaulted with any other mortgage loan that is not a Purchased Asset.

    Sched. 1-14

44.Advance of Funds by Seller. After origination, no advance of funds has been made by Seller to the related Mortgagor other than in accordance with the Mortgage Loan Documents, and, to Seller’s knowledge, no funds have been received from any person other than the related Mortgagor or an Affiliate for, or on account of, payments due on the Purchased Asset (other than as contemplated by the Mortgage Loan Documents, such as, by way of example and not in limitation of the foregoing, amounts paid by the tenant(s) into a lender-controlled lockbox if required or contemplated under the related lease or Purchased Asset Documents). Neither Seller nor any Affiliate thereof has any obligation to make any capital contribution to any Mortgagor under a Purchased Asset, other than contributions made on or prior to the date hereof.

45.Compliance with Anti-Money Laundering Laws. Seller has complied in all material respects with all applicable Anti-Money Laundering Laws and regulations, including without limitation the USA PATRIOT Act of 2001 with respect to the origination of the Purchased Asset, the failure to comply with which would have a material adverse effect on the Purchased Asset.

For purposes of this Schedule 1, the following terms shall have the following meanings:

“Anticipated Repayment Date”: With respect to any Purchased Asset that is indicated on the Transaction Request and Confirmation as having a Revised Rate, the date upon which such Purchased Asset commences accruing interest at such Revised Rate.

“ARD Loan”: Any Purchased Asset the terms of which provide that if, after an Anticipated Repayment Date, the Mortgagor has not prepaid such Purchased Asset in full, any principal outstanding on that date will accrue interest at the Revised Rate rather than the initial rate specified in the related Purchased Asset Documents.

“Revised Rate”: With respect to those Purchased Assets on the Transaction Request and Confirmation indicated as having a revised rate, the increased interest rate after the Anticipated Repayment Date (in the absence of a default) for each applicable Purchased Asset, as calculated and as set forth in the related Purchased Asset Documents.

    Sched. 1-15

REPRESENTATIONS AND WARRANTIES
REGARDING EACH INDIVIDUAL PURCHASED ASSET THAT IS A
PARTICIPATION INTEREST

With respect to each Purchased Asset that is a Participation Interest, Seller hereby represents and warrants, as of the date herein specified or, if no such date is specified, as of the Purchase Date, that; provided that such representations and warranties with respect to any Purchased Asset shall be deemed to be modified by any Approved Exceptions Report with respect to such Purchased Asset:

1.The representations and warranties set forth in this Schedule 1 regarding Commercial Mortgage Loans shall be deemed incorporated herein with respect to each underlying Mortgage Loan related to such Participation Interest.

2.The information set forth in the Transaction Request and Confirmation is complete, true and correct in all material respects. Seller has delivered to Buyer a true, correct and complete copy of all related Purchased Asset Documents, which have not been amended, modified, supplemented or restated since the related date of origination except as such amendment, modification, supplement or restatement has been delivered to Buyer prior to the Purchase Date and, in the case of any Material Modification occurring on or after the related Purchase Date, with respect to which Buyer has provided prior written consent.

3.There exists no material default, breach, violation or event of acceleration (and no event that, with the passage of time or the giving of notice, or both, would constitute any of the foregoing) under the documents evidencing or securing the Purchased Asset, in any such case to the extent the same materially and adversely affects the value of the Purchased Asset and the related underlying real property.

4.Except with respect to the enforceability of any provisions requiring the payment of default interest, late fees, additional interest, prepayment premiums or yield maintenance charges, neither the Purchased Asset nor any of the related Purchased Asset Documents is subject to any right of rescission, set-off, abatement, diminution, valid counterclaim or defense, including the defense of usury, nor will the operation of any of the terms of any such Purchased Asset Documents, or the exercise (in compliance with procedures permitted under applicable law) of any right thereunder, render any Purchased Asset Documents subject to any right of rescission, set-off, abatement, diminution, valid counterclaim or defense, including the defense of usury (subject to anti-deficiency or one form of action laws and to bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditor’s rights generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law)), and no such right of rescission, set-off, abatement, diminution, valid counterclaim or defense has been asserted with respect thereto.

5.The Purchased Asset Documents have been duly and properly executed by the originator of the Purchased Asset, and each is the legal, valid and binding obligation of the parties thereto, enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law). The Purchased Asset is not usurious.

6.The terms of the related Purchased Asset Documents have not been impaired, waived, altered or modified in any material respect (other than by a written instrument that is

    Sched. 1-16

included in the related Mortgage Asset File delivered to Buyer prior to the Purchase Date).

7.The assignment of the Purchased Asset constitutes the legal, valid and binding assignment of such Purchased Asset from Seller to or for the benefit of Buyer enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

8.All representations and warranties in the Purchased Asset Documents and in the underlying documents for the Commercial Mortgage Loan secured by a first lien on a multifamily or commercial property to which such Purchased Asset relates are true and correct in all material respects, and there has been no adverse change with respect to the Purchased Asset, the related underlying Mortgage Loan, the related Mortgagor in respect thereof or the underlying Mortgaged Property that would render any such representation or warranty not true or correct in any material respect as of the Purchase Date.

9.The servicing and collection practices used by Seller for the Purchased Asset have complied with applicable law in all material respects and are consistent with those employed by prudent servicers of comparable Purchased Assets.

10.Seller is not a debtor in any state or federal bankruptcy or Insolvency Proceeding.

11.As of the Purchase Date, there is no payment default, giving effect to any applicable notice and/or grace period, and there is no other material default under any of the related Purchased Asset Documents, giving effect to any applicable notice and/or grace period; no such material default or breach has been waived by Seller or on its behalf or by Seller’s predecessors in interest with respect to the Purchased Assets; and no event has occurred that, with the passing of time or giving of notice would constitute a material default or breach; provided, however, that the representations and warranties set forth in this sentence do not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of any subject matter otherwise covered by any other representation or warranty made by Seller in this Schedule 1. No Purchased Asset has been accelerated and no foreclosure or power of sale proceeding has been initiated in respect of the related Mortgage. Seller has not waived any material claims against the related Mortgagor under any non-recourse exceptions contained in the Mortgage Note.

12.No Purchased Asset has been satisfied, canceled, subordinated (except to the senior Mortgage Loan from which the Purchased Asset is derived), released or rescinded, in whole or in part, and the related Mortgagor has not been released, in whole or in part, from its obligations under any related Purchased Asset Document.

13.Each recordable Purchased Asset Document or related assignment thereof delivered by Seller to Buyer in connection with such Purchased Asset is in form and substance acceptable for recording in the applicable jurisdiction.

14.Since each related Purchase Date, there has been no material and adverse change in the financial position of the Purchased Assets.

    Sched. 1-17

SCHEDULE 2

RESPONSIBLE OFFICERS

SELLER AUTHORIZATIONS

Any of the Persons whose signatures and titles appear below are authorized, acting singly, to act for Seller under this Agreement:

Name	Title	Authorized Signature
Gregory Pinkus	CFO	/s/ Gregory Pinkus
Vikram Uppal	CEO	/s/ Vikram Uppal

Schedule 2 to Uncommitted Master Repurchase Agreement

BUYER AUTHORIZATIONS

Any of the Persons whose signatures and titles appear below are authorized, acting singly, to act for Buyer under this Agreement:

AUTHORIZED REPRESENTATIVES OF UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York

Name	Title	Signature
Michael Zoccoli	Executive Director	/s/ Michael Zoccoli
Andrew Lisa	Associate Director	/s/ Andrew Lisa

Signature Page to Schedule 2 to Uncommitted Master Repurchase Agreement

SCHEDULE 3

SCHEDULED INDEBTEDNESS

Indebtedness	6/30/2021
Term Loan (Goldman Sachs)	$107,016,023
Unsecured Notes	$85,125,000
Obligations under participation agreements	$114,329,732
Mortgage Loan Payable	$40,401,127
Secured Borrowing (Consolidated A-note on 610 Walnut)*	$25,850,983
Revolving Line of Credit (Western Alliance Bank)**	$9,213,759
Total Indebtedness	$381,936,624
*Committed balance is $42,500,000
**Committed balance is $75,000,000

    Sch. 3-1

EXHIBIT A

FORM OF FUTURE FUNDING TRANSACTION REQUEST AND CONFIRMATION

[DATE]

UBS AG, by and through its branch office at
1285 Avenue of the Americas, New York, New York
1285 Avenue of the Americas, 13th Floor
New York, New York 10019
Attention: Michael Zoccoli

Re:    Uncommitted Master Repurchase Agreement, dated as of November 8, 2021 (the “Repurchase Agreement”), by and between Terra Mortgage Capital III, LLC, (“Seller”) and UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (“Buyer”).

Purchased Asset: [_______________________]
Original Principal Amount of Note: $[________________]
Purchase Price: $[________________]
Current Repurchase Price: $[________________]
Future Funding Amount: $[________________]

Ladies and Gentlemen:

Pursuant to the Repurchase Agreement, Seller hereby requests that Buyer enter into a Future Funding Transaction in connection with the Purchased Asset listed on the Transaction Request and Confirmation attached hereto as Annex 1 in accordance with the Repurchase Agreement.

In connection with this Future Funding Transaction Request and Confirmation, the undersigned hereby certifies that: (i) each of the conditions precedent set forth in Section 3(d) of the Repurchase Agreement have been satisfied as of the date hereof; (ii) attached hereto as Annex 2 is an updated copy of the Purchase Closing Statement for such Purchased Asset; and (iii) attached hereto is (x) an updated copy of the Summary Diligence Materials relating to such Purchased Asset described on Annex 3 hereto, and (y) with respect to the Purchased Asset, an updated copy of the Transaction Request and Confirmation is attached hereto as Annex 1.

Seller hereby acknowledges that this Future Funding Transaction Request and Confirmation shall not be binding upon Buyer unless and until Buyer has countersigned this Future Funding Transaction Request and Confirmation and delivered it to Seller.

By countersigning this Future Funding Transaction Request and Confirmation, Buyer confirms its agreement to enter into a Future Funding Transaction in connection with the Purchased Asset listed in Annex I hereto in accordance with the terms listed in Annex I, pursuant to the Repurchase Agreement.

All capitalized terms used herein but not otherwise defined shall have the meanings specified in the Repurchase Agreement. The Repurchase Agreement is incorporated by reference into this Future Funding Transaction Request and Confirmation, and is made a part hereof as if it were fully set forth herein and as evidenced hereby until all amounts due in connection with this Future Funding Transaction are paid in full.

USActive 54634370.26    Exh. A-1

Terra Mortgage Capital III, LLC, a Delaware limited liability company

By:        
Name:
Title:

USActive 54634370.26    Exh. A-2

Buyer hereby agrees to enter into the Future Funding Transaction set forth in this Future Funding Transaction Request and Confirmation pursuant to the provisions of the Repurchase Agreement and the terms hereof.

With respect to the representations and warranties of Seller made pursuant to Section 11 of the Repurchase Agreement and Schedule 1 thereto, Buyer hereby acknowledges and consents to the exceptions to such representations and warranties, if any, solely to the extent expressly set forth below:

[Each item, if any, in the related Approved Exceptions Report to be listed here.]

Agreed and Accepted:

UBS AG, by and through its branch office at
1285 Avenue of the Americas, New York, New York

By:        
Name:
Title:

By:        
Name:
Title:

USActive 54634370.26    Exh. A-3

Annex 1 to Exhibit A

ORIGINAL TRANSACTION REQUEST AND CONFIRMATION

[Copy to be attached]

USActive 54634370.26    Annex 1 to Exhibit A

Annex 2 to Exhibit A

PURCHASE CLOSING STATEMENT

UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York
Terra Mortgage Capital III, LLC Facility

Funding Memorandum

To:    U.S. Real Estate Finance Group

From:    Terra Mortgage Capital III, LLC

Date:    [_____]

Subject:    [ASSET NAME]

Please wire the following:

WIRE I:

Funding for:    Loan Amount    Purchase Price Percentage    Advance Amount

[ASSET NAME]    $[_________]    [___]%    $[_________]

Total Advance Amount    $[_________]    [___]%    $[_________]

Expenses            $[___]

Total Amount of Wire            $[___________]

Wire Instructions

Bank:    [____________]

ABA No.    [____________]

Account Name:    [____________]

Account No:    [____________]

Ref:    [____________]

Notify:    [____________]

_____________________________

Name:

Title:

USActive 54634370.26    Annex 2 to Exhibit A

Annex 3 to Exhibit A

SUMMARY DUE DILIGENCE MATERIALS

For Commercial Mortgage Loans:

1. Underwriting

2. Appraisal

3. Engineering

4. Environmental

5. Current Financial Statements

6. Current Rent Roll (if applicable)

7. Closing Binder

For Participation Interests:

1. Underwriting

2. Appraisal

3. Engineering

4. Environmental

5. Current Financial Statements

6. Current Rent Roll (if applicable)

7. Closing Binder

8. Documents Evidencing Participation Agreement

9. Participation Certificate (if any)

USActive 54634370.26    Annex 3 to Exhibit A

EXHIBIT B

COMPLIANCE CERTIFICATE

I, ___________________, do hereby certify that I am the [duly elected, qualified and authorized] [CFO/PRESIDENT] of Terra Property Trust, Inc., a Maryland corporation (“Guarantor”). This Certificate is delivered to you in connection with the Uncommitted Master Repurchase Agreement dated as of November 8, 2021, among Terra Mortgage Capital III, LLC (“Seller”) and UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (as amended from time to time, the “Agreement”), as the same may have been amended from time to time. Capitalized terms shall have the meaning specified in the Agreement. I hereby certify that, not in my individual capacity, but in my capacity as [_______] of Guarantor, as of the date of the financial statements attached hereto, Guarantor is and, for the immediately preceding fiscal quarter, has been in compliance with all the terms of the Agreement and, without limiting the generality of the foregoing, I certify that:

Cash and Cash Equivalents. The Cash Liquidity of Guarantor and its consolidated Subsidiaries is $[___________]. This calculation is provided in Schedule 1 hereto.

Total Liquidity. Guarantor and its Subsidiaries have a Total Liquidity of $[__________]. This calculation is provided in Schedule 1 hereto.

Tangible Net Worth. Guarantor and its Subsidiaries have a Tangible Net Worth of $[____________]. This calculation is provided in Schedule 1 hereto.

Interest Coverage Ratio. The Interest Coverage Ratio of Guarantor and its consolidated Subsidiaries [ Consolidated EBITDA divided by Interest Expense] is [_____] to 1.00. This calculation is provided in Schedule 1 hereto.

Financial Statements. The financial statements attached hereto as Schedule 2 fairly present in all material respects the financial condition and results of operations of Guarantor and its consolidated Subsidiaries, in accordance with GAAP, consistently applied, as at the end of, and for, the period indicated thereon (subject to normal year-end adjustments).

IN WITNESS WHEREOF, I have set my hand this __ day of __________ 20[__].

USActive 54634370.26    Exh. B-1

By:        
Name:
Title:

USActive 54634370.26

SCHEDULE 1 TO
OFFICER’S COMPLIANCE CERTIFICATE

CALCULATIONS OF FINANCIAL COVENANTS
As of the month ended [DATE]

USActive 54634370.26    Exh. B-3

SCHEDULE 2 TO
OFFICER’S COMPLIANCE CERTIFICATE

FINANCIAL STATEMENTS

USActive 54634370.26

EXHIBIT C

FORM OF POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that Terra Mortgage Capital III, LLC (“Seller”) hereby irrevocably constitute and appoint UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (“Buyer”) 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 Seller and in the name of Seller or in its own name, from time to time in Buyer’s discretion:

1.in the name of Seller 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 assets purchased by Buyer under the Uncommitted Master Repurchase Agreement (as amended, restated or modified, the “Repurchase Agreement”) dated November 8, 2021 (the “Assets”) 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 Buyer for the purpose of collecting any and all such moneys due with respect to any such Assets whenever payable;

2.to pay or discharge taxes and liens levied or placed on or threatened against the Assets;

3. (i) to direct any party liable for any payment under any Assets to make payment of any and all moneys due or to become due thereunder directly to Buyer or as Buyer shall direct; (ii) 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 Assets; (iii) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Assets; (iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Assets or any proceeds thereof and to enforce any other right in respect of any Assets; (v) to defend any suit, action or proceeding brought against Seller with respect to any Assets; (vi) to settle, compromise or adjust any suit, action or proceeding described in clause (v) above and, in connection therewith, to give such discharges or releases as Buyer may deem appropriate; and (vii) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Assets as fully and completely as though Buyer were the absolute owner thereof for all purposes, and to do, at Buyer’s option and Seller’s expense, at any time, and from time to time, all acts and things which Buyer deems necessary to protect, preserve or realize upon the Assets and Buyer’s liens thereon and to effect the intent of this Agreement, all as fully and effectively as Seller might do;

4.for the purpose of carrying out the transfer of servicing with respect to the Assets from Loan Servicer to a successor servicer appointed by Buyer in its sole discretion and to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish such transfer of servicing; and

5.for the purpose of delivering any notices of sale to mortgagors or other third parties, including without limitation, with respect to the Assets, those required by law.

Seller 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.

USActive 54634370.26    Exh. C-1

Seller also authorizes Buyer, from time to time, to execute, in connection with any sale, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Assets.

The powers conferred on Buyer hereunder are solely to protect Buyer’s interests in the Assets and shall not impose any duty upon it to exercise any such powers. Buyer 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 Seller for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct.

TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND BUYER ON ITS OWN BEHALF AND ON BEHALF OF BUYER’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.

IN WITNESS WHEREOF, Seller has caused this power of attorney to be executed and Seller’s seal to be affixed this 8th day of November, 2021.

[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURES FOLLOW.]

TERRA MORTGAGE CAPITAL III, LLC, a Delaware limited liability company

By:    
Name:
Title:

Signature Page to the Power of Attorney

USActive 54634370.26

Acknowledgment of Execution by Seller (Principal):

STATE OF     )
    )    ss.:
COUNTY OF     )

On the ___ day of October, 2021 before me, the undersigned, a Notary Public in and for said State, personally appeared ____________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity as ____________________ for Terra Mortgage Capital III, LLC and that by his signature on the instrument, the person upon behalf of which the individual acted, executed the instrument.

IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day and year in this certificate first above written.

    
Notary Public

[SEAL]

My Commission expires:

    

EXHIBIT D

FORM OF DISTRIBUTION WORKSHEET

[Due from UBS]

USActive 54634370.26    Exh. D-1

EXHIBIT E

FORM OF SELLER REPORT

[Due from Seller]

USActive 54634370.26    Exh. E-1

EXHIBIT F

FORM OF TRANSACTION REQUEST AND CONFIRMATION

[DATE]

UBS AG, by and through its branch office at
1285 Avenue of the Americas, New York, New York
1285 Avenue of the Americas, 13th Floor
New York, New York 10019
Attention: Michael Zoccoli

Re:    Uncommitted Master Repurchase Agreement, dated as of November 8, 2021 (the “Repurchase Agreement”), by and between Terra Mortgage Capital III, LLC (“Seller”) and UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (“Buyer”).

Eligible Asset:
Original Principal Amount of Note:
Purchase Price:

Ladies and Gentlemen:

Pursuant to the Agreement, Seller hereby requests that Buyer enter into a Transaction to purchase the Eligible Assets listed on the Purchase Closing Statement attached hereto as Annex 1 in accordance with the Agreement.

In connection with this Transaction Request and Confirmation, the undersigned hereby certifies that: (i) each of the Transaction conditions precedent set forth in Section 3 of the Agreement has been satisfied as of the date hereof, or will be satisfied on the proposed Purchase Date (other than the conditions precedent set forth in clauses (i) and (xii) of Section 3(b) of the Agreement); (ii) attached hereto as Annex 1 is the Purchase Closing Statement for the Eligible Asset; and (iii) attached hereto is the Summary Diligence Materials relating to the Eligible Asset described on Annex 2 hereto.

Seller hereby acknowledges that this Transaction Request and Confirmation shall not be binding upon Buyer unless and until Buyer has countersigned this Transaction Request and Confirmation and delivered it to Seller.

By countersigning this Transaction Request and Confirmation, Buyer hereby confirms its agreement to enter into a Transaction to purchase the Eligible Assets which are Purchased Assets listed in Annex 1 hereto in accordance with the terms listed in Annex 1, pursuant to the Repurchase Agreement.

All capitalized terms used herein but not otherwise defined shall have the meanings specified in the Repurchase Agreement. The Repurchase Agreement is incorporated by reference into this Transaction Request and Confirmation, and is made a part hereof as if it were fully set forth herein and as evidenced hereby until all amounts due in connection with this Transaction are paid in full.

USActive 54634370.26    Exh. F-1

TERRA MORTGAGE CAPITAL III, LLC, a Delaware limited liability company

By:        
Name:
Title:

Buyer hereby agrees to purchase the Eligible Assets set forth in this Transaction Request and Confirmation pursuant to the provisions of the Repurchase Agreement and the terms hereof.

With respect to the representations and warranties of Seller made pursuant to Section 11 of the Repurchase Agreement and Schedule 1 thereto, Buyer hereby acknowledges and consents to the exceptions to such representations and warranties, if any, solely to the extent expressly set forth below:

[Each item, if any, in the related Approved Exceptions Report to be listed here.]

Agreed and Accepted:

UBS AG, by and through its branch office at
1285 Avenue of the Americas, New York, New York

By:        
Name:
Title:

By:        
Name:
Title:

USActive 54634370.26    Exh. F-3

Annex 1 to Exhibit F

PURCHASE CLOSING STATEMENT

UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York
Terra Mortgage Capital III, LLC Facility

Funding Memorandum

To:    U.S. Real Estate Finance Group

From:    Terra Mortgage Capital III, LLC

Date:    [_____]

Subject:    [ASSET NAME]

Please wire the following:

WIRE I:

Funding for:    Loan Amount    Purchase Price Percentage    Advance Amount

[ASSET NAME]    $[_________]    [___]%    $[_________]

Total Advance Amount    $[_________]    [___]%    $[_________]

Expenses            $[___]

Total Amount of Wire            $[___________]

Wire Instructions

Bank:    [____________]

ABA No.    [____________]

Account Name:    [____________]

Account No:    [____________]

Ref:    [____________]

Notify:    [____________]

_____________________________

Name:

Title:

USActive 54634370.26    Annex 1 to Exhibit F

Annex 2 to Exhibit F

SUMMARY DUE DILIGENCE MATERIALS

For Commercial Mortgage Loans:

1. Underwriting

2. Appraisal

3. Engineering

4. Environmental

5. Current Financial Statements

6. Current Rent Roll (if applicable)

7. Closing Binder

For Participation Interests:

1. Underwriting

2. Appraisal

3. Engineering

4. Environmental

5. Current Financial Statements

6. Current Rent Roll (if applicable)

7. Closing Binder

8. Documents Evidencing Participation Agreement

9. Participation Certificate (if any)

USActive 54634370.26    Annex 2 to Exhibit F

EXHIBIT G

FORM OF NOTICE TO MORTGAGOR

NOTICE TO MORTGAGOR

[ ]

[Name of Borrower]
[Address]
[ ]
Fax:
Phone:

[Name of Borrower]
[Address]
[ ]
Fax:
Phone:

Re:    Transfer of Loan

Ladies and Gentlemen:

We hereby notify you that your asset [Identify Asset] (the “Loan”) has been transferred to UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (“UBS”) and [_______________________] will be the servicer of your loan. As such all future payments shall be made to the following account:

Wire Instructions:    __________________________
Account #:    __________________________
Account Name:    __________________________
Attention:    __________________________
Reference:     __________________________

This direction shall remain in effect unless and until UBS has notified you otherwise in writing. In addition, no modification, waiver, deferral, or release (in whole or in part) of any party’s obligations in respect of the Loan, or of any collateral for any obligations in respect of the referenced loan, shall be effective without the prior written consent of UBS. Notwithstanding the foregoing, neither you nor any servicer shall take any material action or effect any modification or amendment to the referenced loan without first having given prior notice thereof to UBS in each such instance and receiving the prior written consent of UBS.

Please send all questions and correspondence to the following address:

__________________________
__________________________
__________________________
__________________________

USActive 54634370.26    Exh. G-1

Very truly yours,

TERRA MORTGAGE CAPITAL III, LLC, a Delaware limited liability company, as Seller

By:    
Name:
Title:
Date:

EXHIBIT H

REQUEST FOR REPURCHASE AND CONFIRMATION

[DATE]

To:     UBS AG, by and through its branch office at
1285 Avenue of the Americas, New York, New York
1285 Avenue of the Americas, 13th Floor
New York, New York 10019
Attention: Michael Zoccoli
Telephone No: (212) 713-1439
E-mail: michael.zoccoli@ubs.com

Re:    Uncommitted Master Repurchase Agreement, dated as of November 8, 2021 (the “Agreement”), by and between Terra Mortgage Capital III, LLC, (“Seller”) and UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (“Buyer”). Capitalized terms used herein but not defined shall have the meanings assigned to them in the Agreement.

In connection with the Purchased Assets currently subject to a Transaction under the Agreement, we request the repurchase of those certain Purchased Asset(s) described on Schedule A attached hereto [and release of any and all liens placed by Buyer thereon].

USActive 54634370.26    Exh. H-1

Very truly yours,

TERRA MORTGAGE CAPITAL III, LLC, a Delaware limited liability company, as Seller

By:        
Name:
Title:

SCHEDULE A

Seller requests to repurchase the following Purchased Asset(s):

1.[    ]

USActive 54634370.26    Exh. H-3

EXHIBIT I

FORM OF CUSTODIAL DELIVERY LETTER

On this [___] day of [________], 20[__], Terra Mortgage Capital III, LLC (“Seller”), as Seller under that certain Uncommitted Master Repurchase Agreement, dated as of November 8, 2021 (as amended from time to time the “Repurchase Agreement”) by and between Seller and UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (“Buyer”), does hereby deliver to Wells Fargo Bank, National Association (“Custodian”), as custodian under that certain Custodial Agreement, dated as of November 8, 2021, as amended from time to time, among Buyer, Seller and Custodian, the Asset Files with respect to the Purchased Assets to be transferred to Buyer pursuant to the Repurchase Agreement, which Purchased Assets are listed on the Transaction Request and Confirmation attached hereto and which Purchased Assets shall be subject to the terms of the Custodial Agreement on the date hereof.

With respect to the Mortgage Asset Files delivered hereby, for the purposes of issuing the Trust Receipt, Custodian shall review the Mortgage Asset Files to ascertain delivery of the documents [described][listed] in [Schedule][Exhibit] [__] of the Custodial Agreement.

Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Custodial Agreement.

USActive 54634370.26    Exh. I-1

IN WITNESS WHEREOF, Seller has caused their names to be signed hereto by their officers thereunto duly authorized as of the day and year first above written.

TERRA MORTGAGE CAPITAL III, LLC, a Delaware limited liability company, as Seller

By:        
Name:
Title:

EXHIBIT J

FORM OF LOAN SERVICER NOTICE

[DATE]

[SERVICER]
[ADDRESS]
Attention: ___________

Re:    Uncommitted Master Repurchase Agreement, dated as of November 8, 2021 (as such agreement may be amended, modified and/or restated, the “Repurchase Agreement”), by and between Terra Mortgage Capital III, LLC, (“Seller”), and UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (“Buyer”).

Ladies and Gentlemen:

[SERVICER] (“Loan Servicer”) is servicing certain mortgage loans and/or participation interests for Seller pursuant to that certain [Servicing Agreement], dated as of [__________], by and between Loan Servicer and [_________] (“Original Owner”) (as amended, restated, supplemented or otherwise modified from time to time, the “Servicing Agreement”). A copy of the Servicing Agreement is attached hereto as Exhibit A. Pursuant to the Repurchase Agreement, Loan Servicer is hereby notified that Seller has sold to Buyer and may in the future continue to sell to Buyer certain mortgage loans and/or participation interests (as more fully defined in the Repurchase Agreement, the “Purchased Assets”), and such Purchased Assets are subject to a security interest in favor of Buyer. Capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Repurchase Agreement.

Section 1.    Acts as Loan Servicer.

(a)    Loan Servicer is hereby further notified pursuant to this instruction letter that Seller has sold, and expects from time to time to sell Purchased Assets to Buyer on a “servicing released” basis pursuant to the Repurchase Agreement, a copy of which is attached hereto as Exhibit B, and that the Purchased Assets, together with all Servicing Rights with respect thereto, are sold, transferred and assigned to Buyer pursuant to the Repurchase Agreement and, in connection therewith, the Purchased Assets and all Servicing Rights are also being pledged to Buyer. All of the rights (but none of the obligations, which shall remain solely with Seller) of Seller and each of its Affiliates under the Servicing Agreement with respect to the Purchased Assets, including but not limited to the related Servicing Rights, are assigned to Buyer pursuant to the Repurchase Agreement at the time of sale, and Loan Servicer acknowledges and consents to such assignment. Notwithstanding the foregoing, Buyer has agreed to retain Loan Servicer, for a term of 30-days, as may be extended in writing by Buyer for one or more additional 30-day periods, which extension notice may be included by Buyer in the monthly remittance instructions delivered by Buyer to Loan Servicer under the Repurchase Agreement, to service the Purchased Assets at Seller’s sole cost and expense for the benefit of Buyer pursuant to the Servicing Agreement, and subject to the terms of this instruction letter. Where there is a conflict between the Servicing Agreement and this instruction letter, as with respect to the servicing of, and Servicing Rights in connection with, the Purchased Assets, this instruction letter shall govern. Each party to the Servicing Agreement agrees that Buyer is and shall be a direct express third-party beneficiary of the Servicing Agreement with all of the rights of Seller with respect to the Purchased Assets, but none of the obligations of Seller. Loan Servicer acknowledges and agrees that Buyer shall have direct recourse against Loan Servicer (i) with respect to the rights of Buyer

USActive 54634370.26    Exh. J-1

as specified in this instruction letter in connection with (A) Loan Servicer’s willful misfeasance, bad faith or gross negligence in the performance of its duties under the Servicing Agreement or this instruction letter, (b) a breach of Loan Servicer’s representations and warranties as set forth in the Servicing Agreement, or (c) by reason of reckless disregard of Loan Servicer’s obligations or duties under the Servicing Agreement or this instruction letter, and (ii) the right, subject to all terms and conditions of the Repurchase Agreement, to exercise all rights of Seller as an “Owner” under the Servicing Agreement with respect to the Purchased Assets. Each party to the Servicing Agreement acknowledges and agrees that (I) it retains no economic rights to the servicing of the Purchased Assets, (II) Buyer has granted to Seller a revocable license to cause Loan Servicer to service the Purchased Assets pursuant to the Servicing Agreement, as supplemented and modified by this instruction letter, for the benefit of Buyer only, (III) neither Loan Servicer nor any other Person other than Buyer owns or has any rights with respect to the Servicing Rights of the Purchased Assets, and (IV) in no event shall Loan Servicer or any other Person have any rights to any Income generated by or otherwise received in connection with any of the Purchased Assets to compensate Loan Servicer for any fees, costs or expenses (however defined), including but not limited to reimbursement of any servicing advances in connection with any of the Purchased Assets or transactions contemplated by or services otherwise rendered pursuant to the Servicing Agreement with respect to the Purchased Assets.

(b)    Loan Servicer agrees to service the Purchased Assets pursuant to the Servicing Agreement and this instruction letter for the benefit of Buyer, and, except as otherwise expressly provided herein and subject to the terms and conditions of the Repurchase Agreement, Buyer shall have all of the rights, but none of the duties or obligations (including, without limitation, any obligations regarding the payment of any fees, indemnification, costs, reimbursement or expenses) of Seller [or any Original Owner] under the Servicing Agreement. It is expressly acknowledged and agreed that certain terms relating to the servicing of the Purchased Assets and the rights of Buyer and its Affiliates are contained in the Repurchase Agreement, and it is further acknowledged and agreed that these rights shall be incorporated by reference herein and in the Servicing Agreement, as amended hereby. Loan Servicer has been provided with, and has reviewed a copy of the Repurchase Agreement, in particular, Section 16 thereof, and agrees to take no action that would violate or be otherwise inconsistent with the requirements set forth in the Repurchase Agreement. Loan Servicer shall not make any servicing advances with respect to any of the Purchased Assets without Buyer’s prior written consent.

(c)    Loan Servicer agrees to notify Buyer and Seller in writing (a) of any default (or any payment default that is reasonably foreseeable in accordance with the Servicing Standard (as defined in the Servicing Agreement) with respect to any Purchased Asset (or any underlying Mortgage Loan), (b) if Loan Servicer becomes aware that a loan file for any Purchased Asset is incomplete in any way that could be reasonably likely to adversely affect Loan Servicer’s ability to service the Purchased Assets, (c) if Loan Servicer becomes aware that property insurance is not maintained on any Mortgaged Property securing a Purchased Asset (or any underlying Mortgage Loan) and/or (d) of any other acts, omissions or events with respect to which notice is required to be given to any party pursuant to the Servicing Agreement.

(d)    Loan Servicer further agrees (a) to provide Buyer with copies of any notice, report, advice or summary relating to the Purchased Assets prepared or provided by Loan Servicer pursuant to the Servicing Agreement, or prepared by any other Person as and when received by Loan Servicer, and (b) upon the request of Buyer or its designee, to promptly provide Buyer or its designee a [Servicing Tape]1 for any month (or any portion thereof) as requested by Buyer or its designee.

1 Insert applicable term from Servicing Agreement.

USActive 54634370.26    Exh. J-2

Section 2.     Assignment. Loan Servicer may, only, to the extent provided in the Servicing Agreement, and with Buyer’s prior written consent, assign any or all of its rights, duties and/or obligations under the Servicing Agreement, or enter into any subservicing agreements with subservicers for the servicing and administration of all or part of the Purchased Assets; provided, that, Loan Servicer will remain primarily obligated and liable to Buyer for the servicing, subservicing and administering of the Purchased Assets in accordance with the provisions of the Servicing Agreement and this instruction letter without diminution of any such duties and obligation or liability by virtue of any other servicing or subservicing agreement.

Section 3.    Material Modifications. Loan Servicer agrees to notify Buyer in writing whenever a borrower under a Purchased Asset requests any review, approval or action described in Sections 12(w) of the Repurchase Agreement (any such review, approval or action, a “Material Modification”), and Loan Servicer further agrees that Loan Servicer will not make any Material Modification or take any action requiring Loan Servicer to make a Material Modification, without Buyer’s prior written consent, as determined in its sole discretion.

Section 4.    Collections. Notwithstanding anything to the contrary in the Servicing Agreement, Loan Servicer hereby agrees that it shall (i) maintain, for the duration of the Repurchase Agreement, a schedule identifying the loan and participation interests that are subject to this notice, maintain a segregated account (the “Servicer Account”), which shall not be commingled with any other moneys other than Income relating to the Purchased Assets, (ii) give Buyer written notice of any change of the location or account number of the Servicer Account promptly after the date of such change, (iii) deposit any and all Income received by Loan Servicer relating to the Purchased Assets, other than payments received with respect to a Purchased Asset that are designated for payment of escrows pursuant to the express terms of the Purchased Asset Documents, into the Servicer Account and (iv) within two (2) Business Days of receipt thereof by Loan Servicer, remit all Income (other than payments received with respect to a Purchased Asset that are designated for payment of escrows pursuant to the express terms of the Purchased Asset Documents) related in any way to any of the Purchased Assets, including all amounts in the Servicer Account, and all such other amounts related to the Purchased Assets that are otherwise required to be remitted to Seller or any other Person pursuant to the Servicing Agreement, in accordance with the wiring instructions provided below (such account information, the “Control Account”), or in accordance with any other instructions that may be delivered to Loan Servicer by Buyer or its designee:

Bank:    [_________]

ABA #:    [_________]

Acct #:    [_________]

Acct Name:    [_________]

Under no circumstances shall Loan Servicer remit any such amounts in accordance with any instructions delivered to Loan Servicer by Seller, or any other Person (other than Buyer or Buyer’s designee), without Buyer’s prior written consent.

Section 5.    Event of Default. Loan Servicer further agrees, upon its receipt of written notification (a “Default Notice”), from Buyer that an Event of Default has occurred and is continuing under the Repurchase Agreement, that, solely with respect to the Purchased Assets (i) Buyer or its designee shall assume all of the rights (but none of the duties and obligations) of Seller [or any Original Owner] under the Servicing Agreement, except as otherwise provided herein, (ii) Loan Servicer shall follow the instructions of Buyer or its designee with respect to the Purchased Assets and deliver to Buyer or its designee any information with respect to the Purchased Assets reasonably requested by Buyer or its designee and in accordance with the obligations under the Servicing Agreement, (iii) Loan Servicer shall not follow any instructions received from Seller or any other Person (other than Buyer or Buyer’s designee) with respect to

USActive 54634370.26    Exh. J-3

the Purchased Assets, (iv) Buyer may, in its sole discretion, sell its right to the Purchased Assets on a servicing released basis, and (v) Loan Servicer shall treat this instruction letter as a separate and distinct servicing agreement between Loan Servicer and Buyer (incorporating the terms of the Servicing Agreement by reference), subject to no setoff or counterclaims arising in Loan Servicer’s favor (or in the favor of any third party claiming through Loan Servicer) under any other agreement or arrangement between Loan Servicer, Seller or otherwise. Notwithstanding anything to the contrary herein or in the Servicing Agreement, in no event shall Buyer be liable for any fees, indemnities, costs, reimbursements or expenses incurred by Loan Servicer or Seller, or any of their respective Affiliates, or otherwise owed to Loan Servicer or Seller, or any of Loan Servicer’s or Seller’s respective Affiliates, at any time.

Section 6.    Reliance by Loan Servicer. Loan Servicer may rely and shall be protected in acting or refraining from acting upon any notice, request, each consent, order, certificate, report, opinion or document (including, but not limited to, electronically confirmed facsimiles thereof) believed by it to be genuine and to have been signed or presented by the proper party or parties. Loan Servicer shall have no obligation to review or confirm that actions taken pursuant to the foregoing in accordance with this instruction letter comply with any other agreement or document to which it is not a party. In particular, Loan Servicer need not investigate whether Buyer is entitled under the Repurchase Agreement to give a Default Notice.

Section 7.    Servicing Fees and Expenses. Notwithstanding anything to the contrary herein or in the Servicing Agreement, all [Servicing Fees and Servicing Expenses]2 (each as defined in the Servicing Agreement), together with any other unreimbursed fees (including, without limitation, termination fees), costs, advances and expenses otherwise due and payable thereunder to Loan Servicer (to the extent related to the Purchased Assets), shall not be withheld from Income prior to the remittance thereof to the Control Account. Instead, all such amounts shall be deposited by Loan Servicer as Income directly into the Control Account. All such amounts which are otherwise due and owing to Loan Servicer under the Servicing Agreement shall be separately and independently paid to Loan Servicer directly by Seller. For the avoidance of doubt, all Servicing Rights belong to Buyer, and no such Servicing Rights are owned by Loan Servicer or Seller in any respect.

Buyer, its Affiliates, and any director, officer, employee or agent of any of them, together with their successors and assigns, shall be indemnified and held harmless by Loan Servicer against any loss, liability or expense (including reasonable attorneys’ fees of outside counsel) incurred by reason of (i) Loan Servicer’s willful misfeasance, bad faith or gross negligence in the performance of its duties under the Servicing Agreement or this instruction letter, (ii) a breach of Loan Servicer’s representations and warranties as set forth in the Servicing Agreement or (iii) by reason of reckless disregard of Loan Servicer’s obligations or duties under the Servicing Agreement or this instruction letter.

Section 8.    Servicing Termination.

(a)    Notwithstanding anything to the contrary herein or in the Servicing Agreement, Loan Servicer’s rights to service the Purchased Assets shall automatically terminate (i) upon Loan Servicer receiving a written termination notice from Buyer or its designee, or (ii) on the thirtieth (30th) day following the execution of this instruction letter, or if the term of this instruction letter is extended in writing by Buyer or its designee for the applicable additional thirty (30) day period, on the thirtieth (30th) day following the effective date of such extension (in each case, a “Servicing Termination”). In no event shall the term of the Servicing Agreement be extended for more than thirty (30) days in any single extension.

2 Insert applicable terms from Servicing Agreement.

USActive 54634370.26    Exh. J-4

(b)    In the event of a Servicing Termination, Loan Servicer hereby agrees to (i) deliver to Buyer or its designee all Income and all other funds that are related to the Purchased Assets, including all amounts in the Control Account (and no [Servicing Fees, Servicing Expenses], termination fees or any other unreimbursed costs, fees or expenses otherwise due and payable to Loan Servicer under the Servicing Agreement shall be withheld by Loan Servicer (all such amounts being payable to Loan Servicer directly by Seller pursuant to this instruction letter)), together with original and electronic copies of all related servicing files, documents and records, together with all related documents and statements held by Loan Servicer with respect to the applicable Purchased Asset(s) so affected (herein, the “Servicing Files”), and account for all Income and other funds, (ii) cooperate in all respects with the transfer of servicing to Buyer or its designee and (iii) direct any party liable for any payment under any such Purchased Assets to make payment of any and all moneys due or to become due thereunder directly to Buyer or as Buyer shall direct including, without limitation, sending “goodbye” letters in form and substance acceptable to Buyer. The out-of-pocket costs and expenses of such transfer shall be paid by Seller. The transfer of servicing and such records by Loan Servicer shall be in accordance with [Accepted Servicing Practices (as defined in the Servicing Agreement)]3 and the other terms of the Servicing Agreement, and such transfer shall include the transfer of the net amount of all escrows held for the related mortgagors.

Section 9.    Due Diligence. Loan Servicer acknowledges that Buyer or its designee has the right to perform continuing due diligence reviews with respect to the Purchased Assets and with respect to Loan Servicer for purposes of verifying compliance with the representations, warranties and specifications made under the Repurchase Agreement or otherwise. Loan Servicer agrees that, upon reasonable prior notice, Loan Servicer shall provide reasonable access to Buyer or its designee and any of its agents, representatives or permitted assigns to the offices of Loan Servicer during normal business hours, and permit them to examine, inspect, and, at the expense of Seller, make copies and extracts of the Servicing Files in the possession or under the control of Loan Servicer.

Section 10.    No Modification of the Servicing Agreement. Without the prior written consent of Buyer, neither Loan Servicer, Seller nor any other party to the Servicing Agreement shall agree to (a) any material modification, amendment or waiver of the Servicing Agreement; or (b) the assignment, transfer, or material delegation of any of their respective rights or obligations under the Servicing Agreement. Neither Seller, Loan Servicer nor any other party to the Servicing Agreement shall, without the prior written consent of Buyer, agree with respect to any of the Purchased Assets, to either the addition of any new servicers or subservicers under, or any termination of, the Servicing Agreement (except in connection with a simultaneous termination of the Repurchase Agreement).

Section 11.    No Modification of Loan Servicer Notice. No provision of this letter may be amended, countermanded or otherwise modified without the prior written consent of Buyer. This instruction letter may not be revoked and/or rescinded and no provision of this instruction letter may be amended, countermanded or otherwise modified without the prior written consent of Buyer.

Section 12.    Liability of Seller. Notwithstanding anything to the contrary herein or in the Servicing Agreement, Seller’s liability to Loan Servicer under the Servicing Agreement with respect to any fees, indemnities, costs, reimbursements and expenses in respect of which it may be liable as “Seller” thereunder shall be limited to the fees, indemnities, costs, reimbursements and expenses incurred by Seller with respect to the Purchased Assets (as though Seller and Loan Servicer were the only parties to the Servicing Agreement and the Servicing Agreement related solely to the Purchased Assets), and in no event shall Seller be liable to Loan Servicer or any of

3 Standard of servicing in Servicing Agreement to be reviewed.

USActive 54634370.26    Exh. J-5

Seller’s Affiliates for any fees, indemnities, costs, reimbursements or expenses incurred by Seller’s Affiliates under the Servicing Agreement or in respect of any fees, indemnities, costs, reimbursements or expenses related to any assets other than Purchased Assets, and Seller shall not be subject to any setoff right in favor of Loan Servicer or Seller’s Affiliates in respect thereof.

Section 13.    Notice. Any notices to Loan Servicer hereunder shall be delivered in accordance with the provisions of the Servicing Agreement and this instruction letter. Notices hereunder to Buyer shall be delivered to the following address:

UBS AG, by and through its branch office at
1285 Avenue of the Americas, New York, New York
1285 Avenue of the Americas, 13th Floor
New York, New York 10019
Attention: Michael Zoccoli
Telephone No: (212) 713-1439
E-mail: michael.zoccoli@ubs.com

with copies to:

UBS AG, by and through its branch office at
1285 Avenue of the Americas, New York, New York
299 Park Avenue
New York, New York 10171
Attention: Chad Eisenberger
Telephone No: 212-821-4885
E-mail: chad.eisenberger@ubs.com

and

Cadwalader, Wickersham & Taft LLP
227 West Trade Street
Charlotte, North Carolina 28202
Attention: Aaron Benjamin
Telephone: (704) 348-5384
Telecopy: (704) 348-5200
Email: aaron.benjamin@cwt.com

Section 14.    Governing Law. This instruction letter shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to the conflict of laws principles thereof, provided that the parties intend that the provisions of Sections 5-1401 and 5-1402 of the New York General Obligations Law shall apply to this instruction letter.

Section 15.    Acknowledgement; Counterparts. By countersigning below, each of the parties to the Servicing Agreement acknowledges and agrees to the terms of this instruction letter. This instruction letter may be executed and delivered in two or more counterparts, each of which when so executed and delivered shall be an original, but all of which together shall constitute one and the same instrument

[NO FURTHER TEXT ON THIS PAGE]

USActive 54634370.26    Exh. J-6

Please acknowledge receipt of this instruction letter by signing in the signature block below and forwarding an executed copy to Buyer promptly upon receipt.

Very truly yours,

BUYER:

UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York

By:        
Name:
Title:

USActive 54634370.26    Exh. J-7

Acknowledged, agreed and accepted:

TERRA MORTGAGE CAPITAL III, LLC, a Delaware limited liability company

By:        
Name:
Title:

[ORIGINAL OWNER]

By:        
Name:
Title:

USActive 54634370.26    Exh. J-8

EXHIBIT A

[Servicing Agreement]

USActive 54634370.26    Exh. A to Exhibit J

EXHIBIT B

Repurchase Agreement

USActive 54634370.26    Exh. B to Exhibit J

EXHIBIT K

FORM OF SALE AND CONTRIBUTION AGREEMENT

THIS SALE AND CONTRIBUTION AGREEMENT (this “Agreement”) is made as of this [__] day of [______], 201[_] (the “Effective Date”), by and between [_________] (the “Seller” ) and [___________] (the “Buyer” and together with the Seller, the “Parties”).

RECITALS

WHEREAS, the Seller owns 100% of the outstanding membership interests in the Buyer (such membership interests, the “Buyer Interests”);

WHEREAS, the Buyer has entered into a master repurchase agreement dated as of [______], 201[_] (the “Repurchase Agreement”) with [_________] (the “Repo Buyer”), pursuant to which the Buyer intends to sell the [Whole Loan[s]] [Senior Interest[s]] set forth on Schedule 1 (the “Specified Assets”) to the Repo Buyer in exchange for a cash payment of approximately [___________] ($[________]) (the “Cash Payment”); and

WHEREAS, the Seller owns the Specified Assets and for good and valuable consideration desires to sell and contribute the Specified Assets to Buyer in order for Buyer to sell the Specified Assets to the Repo Buyer pursuant to the terms of the Repurchase Agreement.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows (all capitalized terms used, but not defined, herein shall have the meanings ascribed to such terms in the Repurchase Agreement):

Section 1.    Sale and Contribution.

In consideration for the Cash Payment and an increase in the value of the Buyer Interests (the “Contribution”), on the Effective Date, the Seller hereby irrevocably sells, contributes, conveys, assigns, transfers and sets over to Buyer, without recourse, free and clear of any liens, claims or other encumbrances, all of its right, title and interest in and to the Specified Assets. The Seller agrees to endorse or execute any instruments in favor of the Buyer or its assigns or to enter into additional agreements in furtherance of the conveyance of the Specified Assets to the Buyer or its assigns. For operational efficiency, the Seller may directly deliver the Specified Assets to the Repo Buyer at the direction of the Buyer.

Section 2.    Payment of Purchase Price.

The Cash Payment for the purchase of the Specified Assets on the Effective Date shall be payable in full by the Buyer to the Seller on the Effective Date by delivery of immediately available funds, to the extent of funds made available to the Buyer in connection with its subsequent sale of the Specified Assets to the Repo Buyer under the Repurchase Agreement. Buyer shall instruct Repo Buyer to remit the Cash Payment directly to Seller’s account (pursuant to wire instructions to be provided by Seller) on the Effective Date.

Section 3.    The Cash Payment paid, or caused to be paid, to Seller, and the Contribution made by Seller and received by Buyer in exchange for the Specified Assets, is equal to the fair market value consideration that a non-affiliate investor would pay for the Specified Assets in an arm’s length transaction.

USActive 54634370.26    Exh. K-1

Section 4    Intention of the Parties.

It is the intention of the Parties that the sale and/or contribution of the Specified Assets from the Seller to the Buyer made hereunder shall constitute a sale and/or contribution, which sale and/or contribution, as the case may be, is absolute and irrevocable and provides the Buyer with the full benefits of ownership of the Specified Assets. The transfer of the Specified Assets hereunder is made without recourse to the Seller. In view of the intention of the Parties hereto that the sale and/or contribution of the Specified Assets made hereunder shall constitute a sale and/or contribution of such Specified Assets rather than loans secured thereby, the Seller agrees that it will mark its books and records relating to the Specified Assets evidencing that the Buyer has acquired the Specified Assets as provided in this Agreement and to note in its financial statements that the Specified Assets have been absolutely transferred to the Buyer. Upon the request of the Buyer, the Seller will execute and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate to perfect and maintain the perfection of the Buyer’s ownership interest in the Specified Assets. The Buyer hereby accepts the foregoing sale, assignment, transfer and conveyance of the Seller’s right, title and interest in the Specified Assets.

Section 5.    Characterization by the Parties.

If, notwithstanding the intention of the Parties expressed in Section 3 any sale or contribution by the Seller to the Buyer of the Specified Assets hereunder shall be characterized as a secured loan and not a sale or contribution, or such sale or contribution, as the case may be, shall for any reason be ineffective or unenforceable, then this Agreement shall be deemed to constitute a security agreement under the UCC and other applicable law. For this purpose and without being in derogation of the Parties’ intention that the sale of the Specified Assets hereunder shall constitute a true sale and absolute assignment thereof, the Seller hereby grants, transfers and assigns to the Buyer a security interest in all of Seller’s right, title and interest in, to and under the Specified Assets to secure the prompt and complete payment of a loan deemed to have been made in an amount equal to the fair market value of the Specified Assets which security interest shall be prior to all other adverse claims thereto. The Buyer and its assigns shall have, in addition to the rights and remedies which they may have under this Agreement, all other rights and remedies provided to a secured creditor under the UCC and other applicable law, which rights and remedies shall be cumulative.

Section 6.    Representations and Warranties.

(a)    Each of Buyer and Seller represents and warrants to the other that (i) it is duly organized, validly existing and in good standing under the laws and regulations of the state of its organization, (ii) it is duly authorized to execute and deliver this Agreement, to enter into the transaction contemplated hereunder and to perform its obligations hereunder and has taken all necessary action to authorize such execution, delivery and performance, (iii) the person signing this Agreement on its behalf is duly authorized to do so on its behalf, (iv) it has obtained all authorizations of any governmental body required in connection with this Agreement and the transaction hereunder and such authorizations are in full force and effect and (v) the execution, delivery and performance of this Agreement and the transaction hereunder will not violate any law, ordinance or rule applicable to it or its organizational documents or any agreement by which it is bound or by which any of its assets are affected.

(b)    Each of Buyer and Seller represents and warrants to the other that it is not entering into this Agreement or the transactions contemplated by this Agreement with the actual

USActive 54634370.26    Exh. K-2

intent to hinder, delay or defraud any of its creditors. Buyer further represents that it is solvent as of the date hereof.

Section 7.    Non-Recourse.

The sale and contribution of the Specified Assets hereunder by the Seller to the Buyer is without recourse and Seller has no obligation to repurchase the Specified Assets or provide any additional cash to the Buyer as a result of a margin deficit or for any other purpose.

Section 8.    Construction.

Should any provision of this Agreement require judicial interpretation, it is agreed that a court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against any Person by reason of the rule of construction that a document is to be construed more strictly against the Person who itself or through its agent prepared the same, it being agreed that all parties have participated in the preparation of this Agreement.

Section 9.    Entire Agreement.

This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersede and cancel all prior agreements with respect thereto.

Section 10.    Severability.

If any provision of this Agreement shall be determined by a court of competent jurisdiction to be invalid or unenforceable in any jurisdiction, such determination shall not affect the validity or enforceability of the remaining provisions of this Agreement in such jurisdiction or affect the validity or enforceability of such provision in any other jurisdiction.

Section 11.    Governing Law.

This Agreement shall be governed by, and be construed in accordance with, the laws of the State of New York without reference to choice of law principles (other than Section 5-1401 of the New York General Obligations Law).

Section 12.    Third-Party Beneficiary.

The Repo Buyer is an intended third-party beneficiary of this Agreement.

Section 13.    Counterparts; Facsimile.

This Agreement may be executed in counterparts, each of which shall be deemed an original of this Agreement, but all such counterparts shall constitute but one and the same instrument. A copy of an executed signature page delivered by facsimile shall have the same binding legal effect as an original signature.

[SIGNATURES PAGE FOLLOWS]

USActive 54634370.26    Exh. K-3

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

[SELLER]

By:        
Name:
Title:

[BUYER]

By:        
Name:
Title:

USActive 54634370.26    Exh. K-4

Schedule 1

[List of Specified Assets]

USActive 54634370.26    Sch. 1 to Exhibit K

EX-10.12

Exhibit 10.12

GUARANTEE AGREEMENT

GUARANTEE AGREEMENT, dated as of November 8, 2021 (as amended, restated, supplemented, or otherwise modified from time to time, this “Guarantee”), made by TERRA PROPERTY TRUST, INC. (“Guarantor”), in favor of UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (“Buyer”).

RECITALS

Pursuant to that certain Uncommitted Master Repurchase Agreement, dated as of November 8, 2021 (as amended, supplemented or otherwise modified from time to time, the “Repurchase Agreement”), between Buyer and Terra Mortgage Capital III, LLC (“Seller”), Seller has agreed to sell, from time to time, to Buyer certain Eligible Assets (as defined in the Repurchase Agreement, upon purchase by Buyer, each a “Purchased Asset” and, collectively, the “Purchased Assets”), upon the terms and subject to the conditions as set forth therein. Pursuant to the terms of that certain Custodial Agreement dated as of November 8, 2021 (the “Custodial Agreement”) by and among Buyer, Seller and Wells Fargo. Bank National Association (the “Custodian”), Custodian is required to take possession of the Purchased Assets, along with certain other documents specified in the Custodial Agreement, as Custodian of Buyer and any future purchaser, on several delivery dates, in accordance with the terms and conditions of the Custodial Agreement. Pursuant to the terms of that certain Pledge Agreement dated as of November 8, 2021 (the “Pledge Agreement”) made by Terra Mortgage Portfolio III, LLC (“Pledgor”) in favor of Buyer, Pledgor has pledged to Buyer all of the Pledged Collateral (as defined in the Pledge Agreement). The Repurchase Agreement, the Custodial Agreement, the Control Agreement (as defined in the Repurchase Agreement), the Servicing Agreement(s) (as defined in the Repurchase Agreement), the Pricing Letter (as defined in the Repurchase Agreement), this Guarantee and any other agreements executed in connection with the Repurchase Agreement shall be referred to herein as the “Governing Agreements”.

It is a condition precedent to the purchase by Buyer of the Purchased Assets pursuant to the Repurchase Agreement that Guarantor shall have executed and delivered this Guarantee with respect to the due and punctual payment and performance when due, whether at stated maturity, by acceleration of the Repurchase Date or otherwise, of all of the following: (a) all payment obligations owing by Seller to Buyer under or in connection with the Repurchase Agreement or any other Governing Agreements; (b) any and all extensions, renewals, modifications, amendments or substitutions of the foregoing; (c) all fees and expenses, including, without limitation, reasonable attorneys’ fees and disbursements, that are incurred by Buyer in the enforcement of any of the foregoing or any obligation of Guarantor hereunder; and (d) any other obligations of Seller and Pledgor in favor of Buyer under each of the Governing Agreements (collectively, the “Obligations”).

NOW, THEREFORE, in consideration of the foregoing premises, to induce Buyer to enter into the Governing Agreements and to enter into the transaction contemplated thereunder, Guarantor hereby agrees with Buyer, as follows:

2.Defined Terms. Unless otherwise defined herein, capitalized terms used herein shall have the respective meanings given them in the Repurchase Agreement.

“Cash and Cash Equivalents” means, with respect to Guarantor and its consolidated Subsidiaries, (a) cash, (b) fully federally insured demand deposits, or (c) securities with maturities of one hundred eighty (180) days or less from the date of acquisition issued or fully guaranteed or insured by the United States Government.

    -1-

“Cash Liquidity”: means, with respect to any Person on any date, the amount of unrestricted Cash and Cash Equivalents held by such Person and its consolidated Subsidiaries.

“Consolidated EBITDA”: means, with respect to any Person, for any period of four consecutive fiscal quarters ended on the last day of any fiscal quarter of such Person, an amount equal to, the following, all determined on a consolidated basis, without duplication, for any Person and its consolidated Subsidiaries in accordance with GAAP: (a) Consolidated Net Income (or loss) of such Person, plus (b) the following (but only to the extent actually deducted in calculating such Consolidated Net Income (or loss)): (i) depreciation and amortization expense, (ii) Interest Expense, (iii) income tax expense, (iv) extraordinary or non-cash non-recurring losses and (v) transaction costs in connection with the Transaction Documents, and minus (c) the following (but only to the extent actually added in calculating such Consolidated Net Income (or loss)): extraordinary or non-cash non-recurring gains; determined, in each case, on a consolidated basis.

“Consolidated Net Income”: means, with respect to any Person for any period of four consecutive fiscal quarters ended on the last day of any fiscal quarter of such Person, the sum of all the consolidated net income of such Person and its consolidated Subsidiaries determined in accordance with GAAP and in each case, determined on a consolidated basis without duplication.

“Indebtedness” means, as to any Person, all obligations, contingent and otherwise, that in accordance with GAAP should be classified upon the consolidated balance sheet of such Person and such Person’s Subsidiaries as liabilities, or to which reference should be made by footnotes thereto, including in any event and whether or not so classified: (a) all obligations for borrowed money or other extensions of credit whether secured or unsecured, absolute or contingent, including, without limitation, unmatured reimbursement obligations with respect to letters of credit or guarantees issued for the account of or on behalf of such Person and its Subsidiaries and all obligations representing the deferred purchase price of property, (b) all obligations evidenced by bonds, notes, debentures or other similar instruments, (c) all liabilities secured by any mortgage, pledge, security interest, lien, charge, or other encumbrance existing on property owned or acquired subject thereto, whether or not the liability secured thereby shall have been assumed, (d) all guarantees, endorsements and other contingent obligations whether direct or indirect, in respect of indebtedness of others or otherwise, including any obligations under any agreements or other arrangements, any obligation to supply funds to or in any manner to invest in, directly or indirectly, the debtor, to purchase indebtedness, or to assure the owner of indebtedness against loss, through an agreement to purchase goods, supplies, or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise, and the obligations to reimburse the issuer in respect of any letters of credit. Notwithstanding the foregoing, for purposes of this definition, (A) contingent obligations of a Person in respect of customary completion guarantees and carry cost guarantees shall not constitute Indebtedness unless and until such obligations are actually due and payable, (B) contingent obligations of a Person in respect of customary non-recourse carveout guarantees and environmental indemnities shall not constitute Indebtedness, liabilities of Guarantor or a subsidiary in respect of interest reserves and other deposits made on behalf of borrowers or investees under loans or preferred equity investments advanced by Guarantor or a subsidiary, to the extent such liabilities are offset by a corresponding asset (e.g., the amount of such reserve or deposit), shall not constitute Indebtedness, (C) liabilities of Guarantor or a subsidiary in respect of participation interests in loans or preferred equity investments made by Guarantor or a subsidiary, to the extent such liabilities are offset by a corresponding asset (e.g., the amount of the loan receivable in which such participation has been granted), shall not constitute Indebtedness, and (D) obligations under capitalized leases shall not constitute Indebtedness.

    -2-

“Interest Coverage Ratio”: means, as of any date of determination in respect of any fiscal quarter, Consolidated EBITDA for the preceding four fiscal quarters divided by Interest Expense for the preceding four fiscal quarters.

“Interest Expense”: means, with respect to any Person and its consolidated Subsidiaries in respect of any period of four consecutive fiscal quarters, ended on the last day of any fiscal quarter of such Person, determined on a consolidated basis without duplication, consolidated interest expense of such Person and its consolidated Subsidiaries, whether paid or accrued, without deduction of consolidated interest income of such Person and its consolidated Subsidiaries, including, without limitation or duplication, or, to the extent not so included, with the addition of: (i) interest expense associated with any interest rate hedging activity of such Person; (ii) the amortization of debt discounts by such Person; and (iii) prepayment penalties and debt extinguishment charges paid by such Person, in all cases as reflected in the applicable consolidated financial statements of such Person and all as determined in accordance with GAAP.

“Investor” shall mean any limited partner, member or other investor committed to contribute capital to Guarantor pursuant to a subscription agreement, Guarantor’s partnership agreement, limited liability company agreement or other constitutive or investment agreement.

“Leverage Ratio” shall mean, with respect to any Person, the ratio of the Total Indebtedness to the Tangible Net Worth of such Person.

“Liquidity” means, with respect to Guarantor on any date of determination, (i) unrestricted and unencumbered (other than pursuant to the Transaction Documents) Cash and Cash Equivalents held by Guarantor and its consolidated Subsidiaries (including, without limitation, Cash and Cash Equivalents held by Seller), and (ii) Qualified Capital Commitments of Guarantor.

“Non-Recourse Indebtedness” means, with respect to any Person and any date, indebtedness of such Person as of such date for borrowed money in respect of which recourse for payment (except for customary exceptions for fraud, misapplication of funds, environmental indemnities, Insolvency Events, non-approved transfers or other events) is contractually limited to specific assets of such Person encumbered by a Lien securing such Indebtedness.

“Qualified Capital Commitments” means, as of any date of determination, with respect to any Person, unpledged and unencumbered (but subject to the proviso below), binding, callable commitments (subject only to customary notice requirements) to make capital contributions from limited partners, general partners, members or other equity holders from such Person, which limited partners, members or other equity holders are in good standing; and, in all cases solely to the extent of such investor’s capital commitments, as to which none of the following events has occurred and is continuing: (i) a failure of any investor to pay any portion of its capital commitment to Guarantor when such payment is due; (ii) Guarantor has determined in good faith that such investor may be unlikely to pay any portion of its capital commitment to Guarantor when such payment is due; (iii) such investor becomes the subject of any bankruptcy or other insolvency proceeding or the appointment of a receiver in respect thereof; (iv) the repudiation by such investor of all or any portion of its capital commitment to Guarantor; (v) such investor withdrawing, in whole or in part, as an investor in Guarantor in accordance with the applicable partnership, limited liability company or other constitutive agreement; or (vi) the release or termination of such investor’s capital commitment to Guarantor by such investor, Guarantor or Guarantor’s general partner, manager or managing member, but if such release or termination is related to a partial redemption, then solely to the extent of such partial redemption; provided that Qualified Capital Commitments that are pledged as security on Guarantor’s subscription finance credit facilities may be included as Qualified Capital Commitments only to the extent of the

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amount by which such Qualified Capital Commitments are in excess of the unpaid principal balance of such subscription finance credit facilities.

“Recourse Indebtedness” means, with respect to any Person and any date, all Indebtedness of such Person as of such date other than (a) Non-Recourse Indebtedness, and (b) with respect to limited recourse guarantees, any portion of the related obligations that is not recourse to such Person.

“Tangible Net Worth” means, with respect to Guarantor on any date of determination, (A) the sum of (i) all amounts that would be included under capital or shareholder’s equity (or any like caption) on a consolidated balance sheet of Guarantor and its consolidated Subsidiaries at such date and (ii) Qualified Capital Commitments of Guarantor, minus (B) the sum of (i) amounts owing to Guarantor from any Affiliate thereof (ii) intangible assets of Guarantor and its consolidated Subsidiaries, if any, and (iii) prepaid Taxes and/or expense, all on or as of such date and all without duplication as determined in accordance with GAAP.

“Total Indebtedness”: means, as of any date of determination, without duplication, all Indebtedness of Guarantor and its consolidated Subsidiaries on or as of such date.

3.Guarantee. (a) Subject to Sections 2(b) and (c) below, Guarantor hereby unconditionally and irrevocably guarantee to Buyer the prompt and complete payment and performance of the Obligations by Seller and Pledgor when due (whether at the stated maturity, by acceleration or otherwise).

(b)Notwithstanding anything in Section 2(a) above to the contrary, but subject in all cases to Sections 2(c) and (d) below, the maximum aggregate liability of Guarantor hereunder shall in no event exceed the sum of (i) 25% of the then-currently unpaid aggregate Repurchase Price of all Purchased Assets other than those that are Non-Controlling Interests, and (ii) 100% of the then-currently unpaid aggregate Repurchase Price of all Purchased Assets that are Non-Controlling Interests.

(c)Notwithstanding the foregoing, the limitation on recourse liability as set forth in Section 2(b) above SHALL BECOME NULL AND VOID and shall be of no force and effect and the Obligations shall be fully recourse to Guarantor upon the occurrence of any of the following:

(i)a voluntary bankruptcy or insolvency proceeding is commenced by Seller, Pledgor or Guarantor under the Bankruptcy Code or any similar federal or state law or any law of any other jurisdiction; or

(ii)an involuntary bankruptcy or insolvency proceeding is commenced against Seller, Pledgor or Guarantor under the Bankruptcy Code or any similar federal or state law, and, in connection therewith, Seller, Pledgor or Guarantor or any Affiliate of Seller, Pledgor or Guarantor (alone or in any combination) has or have colluded in any way with the creditors commencing or filing such involuntary bankruptcy or insolvency proceeding; or

(iii)any material breach of the separateness covenants set forth in Section 10 of the Repurchase Agreement that results in the substantive consolidation of any of the assets and/or liabilities of Seller with the assets and/or liabilities of any other entity in a federal or state bankruptcy or insolvency proceeding.

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(d)In addition to the foregoing, Guarantor shall be liable to Buyer for any costs, losses, claims, expenses or other liabilities actually incurred by Buyer resulting from the following matters:

(i)fraud or intentional misrepresentation by Seller, Pledgor, Guarantor, or any other Affiliate of Seller, Pledgor or Guarantor in connection with the execution and the delivery of this Guarantee, the Repurchase Agreement, or any other Program Document, or any certificate, report, financial statement or other instrument or document furnished to Buyer at the time of the closing of the Repurchase Agreement or during the term of the Repurchase Agreement;

(ii)any material breach of the separateness covenants set forth in Section 10 of the Repurchase Agreement other than as set forth in Section 2(c)(iii) above; and

(iii)any breach of any representations and warranties in any of the Program Documents by Seller, Guarantor or any of its Affiliates relating to Environmental Laws, or any indemnity for costs incurred in connection with the violation of any Environmental Law, the correction of any environmental condition, or the removal of any Materials of Environmental Concern, in each case in any way affecting any or all of the Purchased Assets; provided that the guarantee set forth in this Section 2(d)(iii) shall terminate upon foreclosure and transfer or assumption of the Purchased Asset following an Event of Default pursuant to a public or private sale or strict foreclosure, or other similar enforcement proceeding but solely to the extent that the occurrence giving rise to Buyer’s liability under this Section 2(c)(iii) (A) first arose after such Purchased Asset was transferred or assumed and (B) is unrelated to any act or omission of Seller, Pledgor or Guarantor.

(e)Guarantor further agrees to pay any and all fees, expenses and indemnities (including, without limitation, all fees and disbursements of outside counsel) that may be paid or incurred by Buyer in connection with (i) enforcing any of its rights hereunder, (ii) obtaining advice of counsel with respect to the enforcement, potential enforcement or analysis of its rights hereunder, (iii) all Purchased Assets that are Non-Controlling Interests, and (iv) collecting any amounts owed to it hereunder. Without limiting the generality of the foregoing, Guarantor agrees to hold Buyer harmless from, and indemnify Buyer against, any and all losses, costs or expenses relating to the failure of any Servicer to remit any Income to the Collection Account or comply with any other provision of any Servicing Agreement or any Servicer Notice or Notice to Mortgagor. This Guarantee shall remain in full force and effect and be fully enforceable against Guarantor in all respects until the later of (i) the date upon which the Obligations are paid in full and (ii) the termination of the Repurchase Agreement, notwithstanding that from time to time prior thereto, Seller and/or Pledgor may be free from any Obligations.

(f)No payment or payments made by Seller, Pledgor or any other Person or received or collected by Buyer from Seller, Pledgor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application, at any time or from time to time, in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of Guarantor hereunder, and Guarantor shall, notwithstanding any such payment or payments, remain liable for the full amount of the Obligations under this Guarantee until the Obligations are paid in full, but subject to the limitations on Guarantor’s liability under Section 2(b) above.

(g)Guarantor agrees that whenever, at any time, or from time to time, Guarantor shall make any payment to Buyer on account of any liability hereunder, Guarantor will notify Buyer in writing that such payment is made under this Guarantee for such purpose.

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4.Subrogation. Upon making any payment hereunder, Guarantor shall be subrogated to the rights of Buyer against Seller and Pledgor and in any collateral for any Obligations with respect to such payment; provided, that Guarantor shall not seek to enforce any right or receive any payment by way of subrogation, or seek any contribution or reimbursement from Seller, until all amounts then owing by Seller or Pledgor to Buyer or any of its Affiliates under the Governing Agreements have been paid in full; provided, further, that such subrogation rights shall be subordinate in all respects to all amounts owing to Buyer under the Governing Agreements. If any amount shall be paid to Guarantor on account of such subrogation rights at any time when all of the Repurchase Obligations shall not have been paid in full, such amount shall be held by Guarantor in trust for Buyer, segregated from other funds of Guarantor, and shall, forthwith upon receipt by Guarantor, be turned over to Buyer in the exact form received by Guarantor (duly indorsed by Guarantor to Buyer, if required), to be applied against the Repurchase Obligations, whether matured or unmatured, in such order as Buyer may determine.

5.Amendments, etc. with Respect to the Obligations. Subject to Section 6 hereof, until the Obligations shall have been paid in full, Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against Guarantor, and without notice to or further assent by Guarantor, any demand for payment of any of the Obligations made by Buyer may be rescinded by Buyer and any of the Obligations continued, and the Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by Buyer, and any Governing Agreement and any other document in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as Buyer may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by Buyer for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. Buyer shall have no obligation to protect, secure, perfect or insure any lien at any time held by it as security for the Obligations or for this Guarantee or any property subject thereto. When making any demand hereunder against Guarantor, Buyer may, but shall be under no obligation to, make a similar demand on Seller, Pledgor or any other Person, and any failure by Buyer to make any such demand or to collect any payments from Seller, Pledgor or any such other Person or any release of Seller, Pledgor or such other Person shall not relieve Guarantor of its Obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of Buyer against Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

6.Guarantee Absolute and Unconditional. (a) Guarantor hereby agrees that its obligations under this Guarantee constitute a guarantee of payment when due and not of collection. Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by Buyer upon this Guarantee or acceptance of this Guarantee; the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guarantee; and all dealings between Seller, Pledgor and Guarantor, on the one hand, and Buyer, on the other hand, shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guarantee. Guarantor waives promptness, diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon Seller, Pledgor or this Guarantee with respect to the Obligations. This Guarantee shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (i) the validity, regularity or enforceability of any Governing Agreement, any of the Obligations or any collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by Buyer, (ii) any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to or be asserted by Seller or Pledgor against Buyer, (iii) any requirement that Buyer exhaust any right to take any action against Seller, Pledgor or any other Person prior

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to or contemporaneously with proceeding to exercise any right against Guarantor under this Guarantee or (iv) any other circumstance whatsoever (with or without notice to, or knowledge of, Seller, Pledgor and Guarantor) that constitutes, or might be construed to constitute, an equitable or legal discharge of Seller and/or Pledgor for the Obligations or of Guarantor under this Guarantee, in bankruptcy or in any other instance. When pursuing its rights and remedies hereunder against Guarantor, Buyer may, but shall be under no obligation, to pursue such rights and remedies that Buyer may have against Seller, Pledgor or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by Buyer to pursue such other rights or remedies or to collect any payments from Seller, Pledgor or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of Seller, Pledgor or any such other Person or any such collateral security, guarantee or right of offset, shall not relieve Guarantor 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 Buyer against Guarantor. This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon Guarantor and each of its successors and assigns, and shall inure to the benefit of Buyer, and its permitted successors, endorsees, transferees and assigns, until all the Obligations and the obligations of Guarantor under this Guarantee shall have been satisfied by payment in full, notwithstanding that from time to time during the term of the Governing Agreements, Seller or Pledgor may be free from any Obligations.

        (e) Without limiting the generality of the foregoing, Guarantor hereby agrees, acknowledges, and represents and warrants to Buyer as follows:

(i)Guarantor hereby waives any defense arising by reason of, and any and all right to assert against Buyer any claim or defense based upon, an election of remedies by Buyer that in any manner impairs, affects, reduces, releases, destroys and/or extinguishes Guarantor’s subrogation rights, rights to proceed against Seller, Pledgor or any other guarantor for reimbursement or contribution, and/or any other rights of Guarantor to proceed against Seller, Pledgor, any other guarantor or any other person or security.

(ii)Guarantor is presently informed of the financial condition of Seller and Pledgor and of all other circumstances that diligent inquiry would reveal and that bear upon the risk of nonpayment of the Obligations. Guarantor hereby covenants that it will make its own investigation and will continue to keep itself informed about the financial condition of Seller and Pledgor and of all other circumstances that bear upon the risk of nonpayment and that it will continue to rely upon sources other than Buyer for such information and will not rely upon Buyer for any such information. Guarantor hereby waives the right, if any, to require Buyer to disclose to Guarantor any information that Buyer may now or hereafter acquire concerning such condition or circumstances.

(iii)Guarantor has independently reviewed the Governing Agreements and related agreements and has made an independent determination as to the validity and enforceability thereof, and in executing and delivering this Guarantee to Buyer, Guarantor is not in any manner relying upon the validity, and/or enforceability, and/or attachment, and/or perfection of any liens or security interests of any kind or nature granted by Seller or Pledgor to Buyer, now or at any time and from time to time in the future.

7.Reinstatement. This Guarantee shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by Buyer upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of Seller or Pledgor or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for

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Seller or Pledgor or any substantial part of the property of Seller or Pledgor, or otherwise, all as though such payments had not been made.

8.Payments. Guarantor hereby agree that the Obligations will be paid to Buyer without set-off or counterclaim in U.S. Dollars at the address specified in writing by Buyer.

9.Representations and Warranties. Guarantor represents and warrants to Buyer as of the date hereof and as of each Purchase Date under the Repurchase Agreement that:

(d)Guarantor is duly organized, validly existing and in good standing under the laws and regulations of its jurisdiction of incorporation or organization, as the case may be. Guarantor is duly licensed, qualified, and in good standing in every state where such licensing or qualification is necessary for the transaction of its business, except to the extent that the failure to comply would not reasonably be expected to have a Material Adverse Effect. Guarantor has the power to own and hold the assets it purports to own and hold, and to carry on its business as now being conducted and proposed to be conducted, and has the power to execute, deliver, and perform its obligations under this Guarantee and the other Governing Agreements to which Guarantor is a party.

(e)This Guarantee has been duly executed and delivered by Guarantor for good and valuable consideration. This Guarantee constitutes the legal, valid and binding obligations of it, enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency and other limitations on creditors’ rights generally and equitable principles.

(f)Guarantor does not have actual knowledge of any event having occurred that would make Guarantor unable to perform in all respects all covenants and obligations contained in this Guarantee applicable to Guarantor.

(g)Neither the execution and delivery of this Guarantee nor compliance by it with the terms, conditions and provisions of this Guarantee will conflict with or result in a breach of any of the terms, conditions or provisions of (A) Guarantor’s organizational documents, (B) any contractual obligation to which Guarantor is now a party or constitute a default thereunder, or result thereunder in the creation or imposition of any lien upon any of Guarantor’s assets, (C) any judgment or order, writ, injunction, decree or demand of any court applicable to Guarantor, or (D) any applicable Requirement of Law.

(h)Except as disclosed to Buyer in writing by Guarantor, prior to the Closing Date, there is no action, suit, proceeding, investigation, or arbitration pending or, to Guarantor’s Knowledge, threatened in writing by or against Guarantor or against its assets (i) with respect to any of the Program Documents or any of the transactions contemplated hereby or thereby, or (ii) that could have a Material Adverse Effect. Guarantor is in compliance in all material respects with all Requirements of Law. Guarantor is not in default in any material respect with respect to any judgment, order, writ, injunction, decree, rule or regulation of any arbitrator or Governmental Authority.

(i)Guarantor’s execution and delivery of this Guarantee and its compliance with the terms and provisions hereof will not contravene or conflict with or result in the creation or imposition of any lien upon any of the property or assets of it pursuant to the terms of any indenture, mortgage, deed of trust, or other agreement or instrument to which it is a party. No consent, approval, authorization, or order of any third party is required in connection with the

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execution and delivery by Guarantor of this Guarantee or to consummate the transactions contemplated hereby that has not already been obtained.

(j)No order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any Governmental Authority is required to authorize, or is required in connection with, (A) the execution, delivery and performance of this Guarantee by Guarantor, (B) the legality, validity, binding effect or enforceability of this Guarantee against Guarantor or (C) the consummation of the transactions contemplated by this Guarantee.

(k)Guarantor has timely filed (taking into account all applicable extensions) all required federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all taxes, assessments, fees, and other governmental charges payable by it, or with respect to any of its properties or assets, that have become due and payable except to the extent such amounts are being contested in good faith by appropriate proceedings for which appropriate reserves have been established in accordance with GAAP, and there is no claim relating to any such taxes now pending that was made in writing by any Governmental Authority and that is not being contested in good faith as provided above.

(l)Except as disclosed to Buyer in writing by Guarantor, prior to the Closing Date, there are no judgments against Guarantor unsatisfied of record or docketed in any court located in the United States of America that would reasonably be expected to have a Material Adverse Effect and no Act of Insolvency has ever occurred with respect to Guarantor or any of its Affiliates.

10.Financial and other Covenants. Without limiting any provision set forth in the Repurchase Agreement, Guarantor shall comply at all times with the following covenants:

(d)Cash and Cash Equivalents. The Cash Liquidity of Guarantor and its consolidated Subsidiaries shall not at any time at be less than the greater of (x) $5,000,000, and (y) 5% of the outstanding Purchase Price as of such time.

(e)Total Liquidity. The Liquidity of Guarantor and its consolidated Subsidiaries shall not at any time be less than the greater of (x) 5% of Guarantor’s Recourse Indebtedness as of such time, and (y) the lesser of (i) $15,000,000, and (ii) 10% of the aggregate outstanding Purchase Price of all Purchased Assets, as of such time.

(f)Tangible Net Worth. The Tangible Net Worth of Guarantor and its consolidated Subsidiaries shall not be less than the sum of (i) $215,694,105, plus (ii) 75% of any new investor capital commitments of the direct and indirect investors in Guarantor which first become effective after the Closing Date.

(g)Interest Coverage Ratio. The Interest Coverage Ratio of Guarantor and its consolidated Subsidiaries shall not as of the last day of any calendar quarter, be less than 1.50 to 1.00.

(h)Leverage Ratio. The Leverage Ratio of Guarantor and its consolidated Subsidiaries shall not at any time exceed 3.50 to 1.00.

(i)Guarantor’s compliance with the financial covenants set forth in clauses (a-e) above must be evidenced by Guarantor’s financial statements and a Compliance Certificate (which may be delivered to Buyer by Guarantor) in respect of the financial quarter most recently ended, in the form of Exhibit B to the Repurchase Agreement and furnished

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together therewith, as and when required to be provided by Seller to Buyer pursuant to Section 12(d) of the Repurchase Agreement, and compliance with all such financial covenants are subject to continuing verification by Buyer.

11.Further Covenants of Guarantor.

(d)Taxes. Guarantor has filed and will timely file (taking into account all applicable extensions) all required federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all taxes, assessments, fees, and other governmental charges payable by it, or with respect to any of its properties or assets, that have become due and payable except to the extent such amounts are being contested in good faith by appropriate proceedings diligently conducted and for which appropriate reserves have been established in accordance with GAAP. No tax liens have been filed against Guarantor or any of Guarantor’s assets, and, as of the date hereof, no claims are being asserted with respect to any such taxes, fees or other charges.

(e)PATRIOT Act.

(i)Guarantor is in compliance with all applicable Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws, in each case in all material respects. Guarantor will maintain, or remain subject to, policies and procedures reasonably designed to ensure compliance by Guarantor with applicable Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws.

(ii)Guarantor agrees that, from time to time upon the prior written request of Buyer, it shall execute and deliver such further documents, provide such additional information and reports and perform such other acts as Buyer may reasonably request in order to ensure compliance with the provisions hereof (including, without limitation, compliance with the USA PATRIOT Act of 2001) and to fully effectuate the purposes of this Guarantee; provided, however, that nothing in this Section 10(b) shall be construed as requiring Buyer to conduct any inquiry or decreasing Guarantor’s responsibility for its statements, representations, warranties or covenants hereunder. Guarantor agrees to promptly notify Buyer or a person appointed by Buyer to administer their anti-money laundering program, if applicable, of any change in information affecting this representation and covenant.

(f)Office of Foreign Assets Control. Guarantor warrants, represents and covenants that at all times it is not a Sanctioned Person. Guarantor covenants and agrees that neither it nor any of its Affiliates will knowingly (1) conduct any business, nor engage in any transaction or dealing, with any Sanctioned Person or (2) engage in or conspire to engage in any transaction that evades or avoids or that has the purpose of evading or avoiding any Anti-Money Laundering Laws. Guarantor further covenants and agrees to deliver to Buyer any such certification or other evidence as may be requested by Buyer in its sole and absolute discretion, confirming that neither it nor any of its Affiliates is a Sanctioned Person and neither Guarantor nor any of its Affiliates has knowingly engaged in any business transaction or dealings with a Sanctioned Person, including, but not limited to, the making or receiving any contribution of funds, goods or services to or for the benefit of a Sanctioned Person.

(g)Financial Reporting. Guarantor shall provide, or cause to be provided, to Buyer the financial and reporting information required with respect to Guarantor under Section 12(d) of the Repurchase Agreement.

(h)Compliance with Obligations and Laws. Guarantor shall at all times (i) comply with all contractual obligations, (ii) comply in all respects with all laws, ordinances,

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rules, regulations and orders (including, without limitation, Environmental Laws) of any Governmental Authority or any other federal, state, municipal or other public authority having jurisdiction over Guarantor or any of its assets, (iii) maintain and preserve its legal existence, and (iv) preserve all of its rights, privileges, licenses and franchises necessary for the operation of its business.

(i)Books and Records. Guarantor shall at all times keep proper books of records and accounts in which full, true and correct entries shall be made of its transactions in accordance with GAAP, and set aside on its books from its earnings for each fiscal year all such proper reserves in accordance with GAAP.

(j)Change of Name; Place of Business. Guarantor shall advise Buyer in writing of the opening of any new chief executive office or the closing of any such office of Guarantor and of any change in Guarantor’s name or jurisdiction of organization not less than fifteen (15) Business Days prior to taking any such action.

(k)Limitation on Dividends and Distributions. Following the occurrence and continuation of a Default or an Event of Default, Guarantor shall not make any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of Guarantor, whether now or hereafter outstanding, or make any other distribution or dividend in respect of any of the foregoing or to any shareholder or equity owner of Guarantor, either directly or indirectly, whether in cash or property or in obligations of Guarantor or any of Guarantor’s consolidated Subsidiaries. Notwithstanding the foregoing sentence, Guarantor shall be permitted to make only those distributions in the minimum amount strictly necessary to avoid being subject to tax under Section 857(b)(1) of the Code but only to the extent that each of the following conditions are satisfied: (1) immediately prior to, and immediately after giving effect to such distributions, Guarantor is in compliance with all of Guarantor’s obligations under this Guarantee, including but not limited to all of the covenants set forth in Section 9 of this Guarantee, (2) no Default or any Event of Default has occurred and is continuing in respect of any matter described in clause (h) of Section 13 of the Repurchase Agreement, and (3) prior to making any payment or distribution described in this Section 10(h), Guarantor has provided a certificate of a Responsible Officer of Guarantor certifying to Guarantor’s compliance with clauses (1) and (2) above, and that the amount of any such payment and/or distribution is the minimum amount strictly required in order for Guarantor to avoid being subject to tax under Section 857(b)(1) of the Code.

12.Right of Set-off. Guarantor hereby irrevocably authorizes Buyer and its Affiliates, after the occurrence and during the continuance of an Event of Default, without notice to Guarantor, any such notice being expressly waived by Guarantor, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other 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 Buyer to or for the credit or the account of Guarantor, or any part thereof in such amounts as Buyer may elect, against and on account of the obligations and liabilities of Guarantor to Buyer hereunder and claims of every nature and description of Buyer against Guarantor, in any currency, arising under any Governing Agreement, as Buyer may elect, whether or not Buyer has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Buyer shall notify the applicable Guarantor promptly of any such set-off and the application made by Buyer, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of Buyer under this Section 11 are in addition to other rights and remedies (including, without limitation, other rights of set-off) that the Buyer may have.

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13.Severability. Any provision of this Guarantee that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

14.Section Headings. The section headings used in this Guarantee are for convenience of reference only and shall not affect the interpretation or construction of this Guarantee.

15.No Waiver; Cumulative Remedies. Buyer shall not by any act (except by a written instrument pursuant to Section 15 hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default or event of default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of Buyer, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by Buyer of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that Buyer would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law.

16.Waivers and Amendments; Successors and Assigns; Governing Law. None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except by a written instrument executed by Guarantor and Buyer, except that any provision of this Guarantee may be waived by Buyer in a letter or agreement specifically waiving such terms and executed solely by Buyer. This Guarantee shall be binding upon Guarantor’s successors and assigns and shall inure to the benefit of Buyer, and Buyer’s permitted successors and assigns. THIS GUARANTEE AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS GUARANTEE, THE RELATIONSHIP OF THE PARTIES TO THIS GUARANTEE, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS GUARANTEE.

17.Notices. Notices by Buyer to Guarantor shall be given in writing, addressed to Guarantor at the address or transmission number set forth under its signature below and shall be effective for all purposes if hand delivered or sent by (a) hand delivery, with proof of delivery, (b) certified or registered United States mail, postage prepaid, (c) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of delivery or (d) by email, provided that such email notice must also be delivered by one of the means set forth above, to the address or transmission number set forth under its signature below or at such other address and person as shall be designated from time to time by Guarantor, as the case may be, in a written notice to Buyer. A notice shall be deemed to have been given: (w) in the case of hand delivery, at the time of delivery, (x) in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day, (y) in the case of expedited prepaid delivery upon the first attempted delivery on a Business Day, or (z) in the case of email, upon receipt of confirmation, provided that such email notice was also delivered as required in this Section 16.

    -12-

If Guarantor receives a notice that does not comply with the technical requirements for notice under this Section 16 it may elect to waive any deficiencies and treat the notice as having been properly given. Notice by Guarantor to Buyer shall be given in the manner set forth in Article 24 of the Repurchase Agreement.

18.SUBMISSION TO JURISDICTION; WAIVERS. GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:

(A)SUBMITS IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTEE OR THE OTHER LOAN DOCUMENTS TO WHICH GUARANTOR IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

(B)CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND 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;

(C)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 GUARANTOR AT ITS ADDRESS SET FORTH UNDER GUARANTOR’S SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH BUYER OR GUARANTOR, AS APPLICABLE, SHALL HAVE BEEN NOTIFIED IN WRITING BY THE APPLICABLE GUARANTOR; AND

(D)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.

19.Integration. This Guarantee represents the agreement of Guarantor and Buyer with respect to the subject matter hereof and there are no promises or representations by Buyer or Guarantor relative to the subject matter hereof not reflected herein.

20.Execution. This Guarantee may be executed in counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument. Delivery by telecopier or other electronic transmission (including a .pdf e-mail transmission) of an executed counterpart of a signature page to this Guarantee shall be effective as delivery of an original executed counterpart of this Guarantee.

21.Acknowledgments. Guarantor hereby acknowledges that:

(d)it has been advised by counsel in the negotiation, execution and delivery of this Guarantee and the related documents;

(e)Buyer has no fiduciary relationship to it, and the relationship between Buyer and Guarantor is solely that of surety and creditor; and

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(f)no joint venture exists between or among any of Buyer, on the one hand, and Seller, Pledgor and/or Guarantor on the other hand.

22.Intent. Guarantor intends for this Guarantee to be a credit enhancement related to a repurchase agreement, within the meaning of Section 101(47) of the Bankruptcy Code and, therefore, for this Guarantee to be itself a repurchase agreement, within the meaning of Section 101(47) and Section 559 of the Bankruptcy Code.

23.WAIVERS OF JURY TRIAL. GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTEE OR ANY RELATED DOCUMENT AND FOR ANY COUNTERCLAIM HEREIN OR THEREIN.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

    -14-

IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed and delivered as of the date first above written.

TERRA PROPERTY TRUST, INC., as Guarantor

By:    _/s/ Gregory Pinkus__________________
Name: Gregory Pinkus
Title: Authorized Signatory

Address:

550 Fifth Avenue

6th Floor

New York, NY 10036

Emails: AssetManagement@mavikcapital.com; accounting@mavikcapital.com; greg@mavikcapital.com; don@mavikcapital.com; vik@mavikcapital.com; mikef@mavoikcapital.com

With a copy to:

Kirkland & Ellis LLP

300 N LaSalle

Chicago, IL 60654

Attn: Rachel Brown

Email: Rachel.brown@kirkland.com

Signature Page to Guarantee Agreement

EX-10.13

Exhibit 10.12

SECOND AMENDMENT TO LOAN DOCUMENTS

THIS SECOND AMENDMENT TO LOAN DOCUMENTS (this “Agreement”) is entered into as of January 4, 2022, by and between TERRA MORTGAGE PORTFOLIO II, LLC, a Delaware limited liability company (“Borrower”), TERRA PROPERTY TRUST, INC., a Maryland corporation (“Guarantor”), on the one hand, and WESTERN ALLIANCE BANK, an Arizona corporation (“Lender”), on the other hand.

RECITALS

1.Lender heretofore extended to Borrower a revolving line of credit in the original maximum principal amount of Seventy-Five Million and No/100 Dollars ($75,000,000.00) (the “Revolving Line of Credit”), which Revolving Line of Credit is evidenced by, without limitation, that certain Promissory Note dated as of March 12, 2021, executed by Borrower in favor of Lender (together with any and all amendments thereto or modifications thereof, the “Note”).

2.In connection with the Loan, Borrower also executed and delivered to and in favor of Lender that certain Business Loan Agreement (Revolving Line of Credit) dated March 12, 2021 (together with any and all amendments thereto or modifications thereof, the “LoanAgreement”), pursuant to which, among other things, Borrower granted to Lender a security interest in the Collateral (as defined in the Loan Agreement) to secure Borrower’s obligations to Lender in connection with the Loan.

3.Payment and performance of Borrower’s indebtedness and obligations in connection with the Revolving Line of Credit was and is guaranteed by Guarantor to the extent set forth in the Limited Guaranty dated as of March 12, 2021 in favor of Lender (together with any and all amendments thereto or modifications thereof, the “Guaranty”).

4.Lender perfected its interest in and to the Collateral by causing to be filed a UCC-1 financing statement with the Delaware Secretary of State on March 12, 2021, as Filing No. 2021 2003482 (the “UCC Financing Statement”). Lender’s security interest in the Collateral is first in priority and duly perfected under applicable Law.

5.On or about June 9, 2021, Borrower, Guarantor and Lender entered into the First Amendment to Loan Documents (“First Amendment”).

6.The Loan Agreement, Note, Guaranty, UCC Financing Statement, First Amendment and all other assignments, agreements, instruments and other documents executed by Borrower or Guarantor in connection with the Revolving Line of Credit shall at times hereinafter be referred to collectively as the “Loan Documents.”

7.Borrower and Guarantor have requested that Lender, among other items, (i) increase the Credit Limit to $125,000,000.00, and (ii) extend the maturity date of the Loan to March 12, 2024. Lender has agreed to do so, subject to the terms and conditions set forth herein.

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AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:

1.Recitals; Defined Terms.

The recitals are incorporated herein by this reference as are all exhibits. Borrower and Guarantor, and each of them, agree and acknowledge that the factual information recited above is true and correct. Except as may be otherwise expressly defined in this Agreement, all terms used in this Agreement beginning with a capital letter shall have the meanings ascribed to them in the Loan Agreement.

2.Borrower and Guarantor Acknowledgments as to Obligations and Other Matters.

a.Borrower and Guarantor each acknowledge, confirm and agree that as of December 28, 2021, the total outstanding principal balance of the Note is $38,575,894.93 plus accrued and unpaid interest thereon.

b.Borrower and Guarantor, and each of them, specifically acknowledge, confirm and agree that they do not have any valid offset or defense to the obligations, indebtedness and liability under the Loan Documents.

3.Reaffirmation of Obligations.

This Agreement is, in part, a reaffirmation of the obligations, indebtedness and liability of Borrower and Guarantor, and each of them, to Lender as evidenced by the Loan Agreement, Guaranty and the other Loan Documents. Therefore, Borrower and Guarantor, and each of them, represent, warrant, acknowledge and agree that, except as specified herein, all of the terms and conditions of the Loan Documents are and shall remain in full force and effect, without waiver or modification of any kind whatsoever, and are ratified and confirmed in all respects.

4.Increase in Credit Limit.

a.The Credit Limit is hereby increased from $75,000,000.00 to

$125,000,000.00, subject to the terms and conditions of the Loan Agreement, this Amendment and the other Loan Documents.

b.Any and all references in the Note, Loan Agreement, and the other Loan Documents to the principal loan amount of “Seventy-Five Million and No/100 Dollars ($75,000,000.00)” and “75,000,000.00” shall be replaced with “One Hundred Twenty-Five Million and No/100 Dollars ($125,000,000.00)” and “125,000,000.00”, respectively.

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5.Amendment to Loan Agreement.

a.The definition of “Credit Limit” in Section 1 of the Loan Agreement is hereby amended to read as follows:

“‛Credit Limit’ means One Hundred and Twenty-Five Million Dollars ($125,000,000.00).”

b.Section 4.2.2 of the Loan Agreement is hereby amended to read as

follows:

“4.2.2 Compensating Balances. Borrower and Guarantor shall maintain the Compensating Balance Account(s) with an average daily aggregate balance in such Account(s) of not less than $8,000,000.00 at all times (‘Compensating BalanceAmount’) during the term of the Loan, to be reviewed quarterly, beginning with the calendar quarter ending December 31, 2021. Should the Compensating Balance Requirement fail to be maintained during any calendar quarter during the term of the Loan (‘Quarter’), such will not constitute an Event of Default, but the interest rate that is applicable on the Note during the next Quarter shall automatically be increased by one-quarter of one percent (0.25%) (‘Increased Spread’) over the interest rate that would otherwise be applicable on the Note for such Quarter had the Compensating Balance Requirement been satisfied. For the avoidance of doubt, in any Quarter that the Compensating Balance Requirement is satisfied, Borrower will not be charged the Increased Spread on the applicable Note rate in the next succeeding Quarter. In any Quarter that the Compensating Balance Requirement is not satisfied, Borrower will be charged the Increased Spread on the applicable Note rate for the next succeeding Quarter.”

c.Section 4.12 of the Loan Agreement is hereby amended to read as follows:

“4.12 EXTENSION OPTION. On or before February 12,2024, provided no Event of Default (or event which, with the giving of notice or the passage of time, or both, would become an Event of Default) shall exist under any of the Loan Documents and Borrower is in full compliance with each term, condition and covenant contained in this Agreement and the other Loan Documents, Borrower may submit a written request to extend the Commitment Term for an additional twelve (12) month period. In the event Borrower requests an extension of the Commitment Term for an additional twelve (12) month period, Lender may, in its sole discretion, determine whether or not to grant such request and, if so, the terms and conditions for the granting of such request. Borrower shall execute such documents and instruments required by Lender if it grants such request, and shall reimburse Lender for any fees and costs incurred by Lender in the granting and documenting of any extension (if Borrower does not approve any such documents or instruments, then Borrower and Lender agree that the extension shall not be granted by Lender). In the event that Lender grants an extension of the Commitment Term for an additional twelve (12) month period, Borrower shall have the option, in its sole discretion, to request an additional extension of the Commitment Term prior to the end of that

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twelve (12) month period, subject to the provisions of this Section 4.12. Borrower understands that under no circumstances is Lender required to grant any extension of the Commitment Term if a request is made, and Borrower assumes the risk that no extension of the Commitment Term will be granted by Lender.”

d.Section 6.18.2 of Schedule 6.18 of the Loan Agreement is hereby amended to read of as follows:

“6.18.2MINIMUM PROFITABILITY. At all times during the term of the Loan, Borrower shall cause Guarantor to maintain an Operating Profit of not less than

$3,500,000.00 for each calendar quarter during the term of the Loan, measured on a trailing quarterly basis as of March 31, June 30, September 30 and December 31 of each calendar year, commencing on December 31, 2021, for the immediately preceding three (3) consecutive calendar month period of time, based upon the Financial Statements delivered by Borrower to Lender in accordance with Sections 6.5.4 and 6.5.5 on Schedule 6.5. Borrower shall deliver to Lender any other documentation and evidence as shall be satisfactory to Lender, in Lender’s reasonable judgment, evidencing Guarantor’s compliance with the minimum requirement set forth in this Section 6.18.2.”

e.Clause (a) of Schedule 2 of the Loan Agreement is hereby amended to read as follows:

“(a) Any Collateral Loan that is not secured by a Collateral Mortgage with a first (1st) lien priority on underlying real property collateral that, at the time of closing of such Collateral Loan, is located within one of the top 200 metropolitan statistical areas in the United States of America (this paragraph will cease to apply to a Collateral Loan accepted as an Eligible Receivable by Lender).”

f.The Advance Rate Schedule attached to the Loan Agreement as Exhibit E is hereby deleted and replaced by the Advance Rate Schedule attached hereto as Amended Exhibit E.

6.Amendment to Note.

The Note is hereby amended pursuant to the Amended and Restated Promissory Note executed by Borrower in favor of Lender concurrently herewith (“Amended Note”). All references in the Loan Documents shall mean the Note, as amended and restated by the Amended Note.

7.Agreement as a Loan Document.

From and after the effective date of this Agreement, this Agreement and any other documents and instruments executed in connection herewith shall each constitute one of the “Loan Documents.”

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8.Effective Date of Agreement.

This Agreement and the amendments provided for herein shall be effective as of the date set forth above, subject to the timely and complete satisfaction of each and all of the conditions precedent set forth in Section 10 of this Agreement.

9.Borrower’s and Guarantor’s Representations and Warranties.

Borrower and Guarantor, and each of them, hereby represent and warrant to Lender and covenant and agree with Lender as follows:

a.Borrower and Guarantor, and each of them, have full legal right, power and authority to enter into and perform this Agreement. The execution and delivery of this Agreement by Borrower and Guarantor and the consummation by Borrower and Guarantor of the transactions contemplated hereby have been duly authorized by all necessary action by or on behalf of Borrower and Guarantor. This Agreement is a valid and binding obligation of Borrower and Guarantor, and each of them, enforceable against Borrower and Guarantor in accordance with its terms.

b.Neither the execution and delivery of this Agreement by Borrower and Guarantor, or either of them, nor the consummation by Borrower and Guarantor, or either of them, of the transactions contemplated hereby, conflicts with or constitutes a violation or a default under any law applicable to Borrower and Guarantor, or either of them, or any contract, commitment, agreement, arrangement or restriction of any kind to which Borrower and Guarantor, or either of them, is a party, by which Borrower and Guarantor, or either of them, is bound or to which any of Borrower’s and Guarantor’s, or either of their, property or assets is subject.

c.There are no actions, suits or proceedings pending, or to the knowledge of Borrower and Guarantor, or either of them, threatened against or affecting Borrower and Guarantor, or either of them, respectively, in relation to their obligations to Lender or involving the validity and enforceability of this Agreement, the Loan Agreement, the Note, the Guaranty or any of the other Loan Documents, as applicable, or the priority of any liens given by Borrower to Lender in accordance with the Loan Agreement, and the other Loan Documents, at law or in equity, or before or by any governmental agency, or which could have an adverse effect on the financial condition, operations, properties, assets, liabilities or earnings of Borrower and Guarantor, or either of them, or the ability of Borrower and Guarantor, or either of them, to perform their respective obligations to Lender.

d.Borrower and Guarantor, and each of them, hereby reaffirm and confirm that the representations and warranties of Borrower and Guarantor, as applicable, contained in the Loan Documents are true, correct and complete in all respects as of the date of this Agreement.

e.Borrower and Guarantor, and each of them, are in full and complete compliance with the terms, covenants, provisions and conditions of the Loan Agreement, the Note, the Guaranty and the other Loan Documents to which they are a party.

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All covenants, representations and warranties of Borrower and Guarantor herein are incorporated by reference and hereby made a part of the Loan Agreement and the Guaranty, as applicable.

10.Conditions Precedent to Effectiveness of Agreement.

The effectiveness of this Agreement shall be expressly conditioned upon the following having occurred or Lender having received all of the following on or before January 5, 2022, in form and content satisfactory to Lender and its counsel, in its or their sole and absolute discretion, and suitable for filing or recording, as the case may be, as required:

a.This Agreement, fully executed by Borrower and each Guarantor;

b.The Amended Note, fully executed by Borrower;

c.Payment of a loan and modification fee of $218,750.00, which Borrower and Guarantor acknowledge and agree is deemed fully earned when paid;

d.Such additional information, assignments, agreements, resolutions, certificates, reports, approvals, instruments, documents, subordination agreements, financing statements, consents and opinions as Lender may request, in its sole and absolute opinion and judgment, in connection with this Agreement and/or any of the matters which are the subject of this Agreement; and

e.Payment of the fees and costs of Lender in connection with the preparation, negotiation, administration and execution of this Agreement including, but not limited to, attorneys’ fees, and other costs and fees of other professionals retained by Lender.

11.Release. In consideration of the benefits provided by Lender through this Amendment, Borrower hereby fully, finally, and absolutely and forever releases and discharges Lender and its present and former directors, shareholders, officers, employees, agents, representatives, attorneys, successors and assigns, and their separate and respective heirs, personal representatives, successors and assigns (the “Released Parties”), for, from, and against any and all actions, causes of action, claims, debts, damages, demands, liabilities, obligations, and suits, of whatever kind or nature, in law or equity of the Borrower and, whether now known or which, upon reasonable investigation, would have been known to the Borrower, and whether contingent or matured: (i) in respect of any of the Loan Documents, or the actions or omissions of Lender occurring prior to the date of this Amendment in respect of the obligations, or any duties under the Loan Documents; and (ii) arising from events occurring prior to the date of this Amendment. Borrower acknowledges that it has been informed by their attorneys, and are aware of and familiar with the general principle of law which provides that a general release does not extend to claims which a creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with a debtor (the “UnknownClaims”). To the extent applicable, Borrower expressly waives and relinquishes all rights and benefits they may have under the principle of law relating to the release of Unknown Claims.

12.Miscellaneous.

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a.Section headings used in this Agreement are for convenience only and shall not affect the construction of this Agreement.

b.This Agreement may be executed in one or more counterparts but all of the counterparts shall constitute one agreement; provided, however, this Agreement shall not be effective and enforceable unless and until it is executed by all parties hereto.

c.GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE STATE OF ARIZONA WITHOUT REGARD TO ANY CONFLICTS OF LAW CONCEPTS AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

d.Counterparts. This Amendment may be executed in one or more counterparts, all of which when taken together shall constitute but one instrument, and in the event any signature is delivered by facsimile or “.pdf” transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” were an original thereof.

e.This Agreement and the other documents and instruments executed in connection therewith constitute the product of the negotiation of the parties hereto and the enforcement hereof shall be interpreted in a neutral manner, and not more strongly for or against any party based upon the source of the draftsmanship hereof.

f.This Agreement shall be binding upon and inure to the benefit of Lender, Borrower and Guarantor, and each of them, and their respective successors and assigns, except that neither Borrower nor any Guarantor shall assign their rights hereunder or any interest therein without the prior written consent of Lender.

g.This Agreement is not a novation, nor, except as expressly provided in this Agreement, is it to be construed as a release or modification of any of the terms, conditions, warranties, waivers or rights set forth in the Loan Documents. Nothing contained in this Agreement shall be deemed to constitute a waiver by Lender of any required performance by Borrower or Guarantor, and each of them, of any Event of Default or default heretofore or hereafter occurring under or in connection with the other Loan Documents. In the event there is a conflict in any term, condition or provision of this Agreement, on the one hand, and the Loan Agreement, the Guaranty, or any of the other Loan Documents, on the other hand, the terms, conditions and provisions of this Agreement are to control.

[Signature Page Follows]

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TN WITNESS WHEREOF, Borrower, Guarantor and Lender have executed and delivered this Agreement as of the date et forth above.

BORROWER:

TERRA MORTGAGE PORTFOLIO II, LLC,

a Delaware limited liability company

By: /s/ Greg Pinkus

Name: Greg Pinkus

Its:    Authorized Signatory

GUARANTOR:

TERRA PROPERTY TRUST, INC.,

a Maryland corporation

By:/s/ Greg Pinkus     

Name: Greg Pinkus

Its: Authorized Signatory

[SIGNATURE PAGE CONTINUES]

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LENDER:

WESTERN ALLIANCE BANK,

By: /s/ Kenneth C. Hedberg

Name: Kenneth C. Hedberg

Title: Vice President

4452245v3 1100775-0196

AMENDED EXHIBIT E

ADVANCE RATE SCHEDULE

Property Type Category	Advance Rate1	Advance Sublimits
		Bridge / Renovation	Ground-Up Construction	Dwell Time (Months)	Max Note Maturity (Months)2
SFR Owner Occupied	N/A	N/A	N/A	N/A	N/A
SFR Investor	N/A	N/A	N/A	N/A	N/A
SFR Developer	N/A	N/A	N/A	N/A	N/A
CRE Multi Family	70% LTB / 50% LTV	$125,000	$87,500	36	60
CRE Mixed Use	70% LTB / 50% LTV	$125,000		36	60
CRE Office	70% LTB / 50% LTV	$87,500		36	60
CRE Industrial	70% LTB / 50% LTV	$125,000		36	60
CRE Retail	60% LTB / 45% LTV	$31,250	$0	36	60
CRE Hospitality	60% LTB / 45% LTV	$31,250	$0	36	60
CRE Special Purpose	65% LTB / 50% LTV	$62,500	$0	36	60
Land	55% LTB / 45% LTV	$31,250	N/A	24	36

1LTB based upon Note's Unpaid Principal Balance. LTV based upon Bank Reviewed Appraisal.

2Max note maturities of Construction Notes not to exceed 36-months.

Notwithstanding the foregoing, Advances are subject to the following additional limitations:

1.Advances on any single Collateral Loan shall not exceed $25,000,000.00. On a case by case basis, Lender may approve advances greater than $25,000,000.00 at its sole and absolute discretion, and subject to additional recourse being available to Lender for proceeds in excess of $25,000,000.00.

2.The aggregate amount of all Advances on Collateral Loans secured by Underlying Collateral located in the New York City metropolitan areas shall not exceed

$18,750,000.00.

3.In the event any Collateral Loan Obligor, including any affiliate thereof, has two (2) or more Collateral Loans that otherwise qualify as Eligible Receivables, the aggregate Advances to Borrower for such Collateral Loans shall not exceed, in the aggregate, an amount equal to twenty-five percent (25%) of the Credit Limit;

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4.In the event that the Collateral Loan is acquired by Borrower, as opposed to originated by Borrower, subject to the Advance sublimits set forth above, the Advance Rate shall not exceed one hundred percent (100%) of the acquisition price for such Collateral Loan.

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EX-10.14

Exhibit 10.14

UNCOMMITTED MASTER REPURCHASE

AND

SECURITIES CONTRACT AGREEMENT

Between

TERRA MORTGAGE CAPITAL I, LLC,

as Seller,

and

GOLDMAN SACHS BANK USA,

as Buyer

Dated: February 18, 2022

TABLE OF CONTENTS

Page

ARTICLE 1.    APPLICABILITY	1
ARTICLE 2.    DEFINITIONS	1
ARTICLE 3.    INITIATION; CONFIRMATION; TERMINATION; FEES	26
ARTICLE 4.    MARGIN MAINTENANCE	35
ARTICLE 5.    INCOME PAYMENTS AND PRINCIPAL PAYMENTS	37
ARTICLE 6.    SECURITY INTEREST	38
ARTICLE 7.    PAYMENT, TRANSFER AND CUSTODY	40
ARTICLE 8.    SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS	42
ARTICLE 9.    REPRESENTATIONS AND WARRANTIES	42
ARTICLE 10.    NEGATIVE COVENANTS OF SELLER	51
ARTICLE 11.    AFFIRMATIVE COVENANTS OF SELLER	53
ARTICLE 12.    SINGLE PURPOSE ENTITY	58
ARTICLE 13.    EVENTS OF DEFAULT; REMEDIES	60
ARTICLE 14.    INCREASED COSTS; TAXES	66
ARTICLE 15.    SINGLE AGREEMENT	73
ARTICLE 16.    RECORDING OF COMMUNICATIONS	73
ARTICLE 17.    NOTICES AND OTHER COMMUNICATIONS	74
ARTICLE 18.    ENTIRE AGREEMENT; SEVERABILITY	74
ARTICLE 19.    NON ASSIGNABILITY	74
ARTICLE 20.    GOVERNING LAW	76
ARTICLE 21.    NO WAIVERS, ETC.	76
ARTICLE 22.    USE OF EMPLOYEE PLAN ASSETS	76
ARTICLE 23.    INTENT	77
ARTICLE 24.    DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS	78
ARTICLE 25.    CONSENT TO JURISDICTION; WAIVERS	79
ARTICLE 26.    NO RELIANCE	80
ARTICLE 27.    INDEMNITY	80
ARTICLE 28.    DUE DILIGENCE	81
ARTICLE 29.    SERVICING	82
ARTICLE 30.    MISCELLANEOUS	83
ARTICLE 31. POST CLOSING REQUIREMENTS	83

-i-

ANNEXES, EXHIBITS AND SCHEDULES

ANNEX I	Names and Addresses for Communications between Parties
SCHEDULE I	Prohibited Transferees
SCHEDULE II	Purchased Asset File
SCHEDULE III	Organizational Structure Chart
EXHIBIT I	Form of Confirmation Statement
EXHIBIT II	Authorized Representatives of Seller
EXHIBIT III-A	Monthly Reporting Package
EXHIBIT III-B	Quarterly Reporting Package
EXHIBIT III-C	Annual Reporting Package
EXHIBIT W	Form of Power of Attorney
EXHIBIT V	Representations and Warranties Regarding Individual Purchased Assets
EXHIBIT VI	Advance Procedures
EXHIBIT VII	Form of Margin Deficit Notice
EXHIBIT VIII	Form of Tax Compliance Certificates
EXHIBIT IX	Form of Covenant Compliance Certificate
EXHIBIT X	UCC Filing Jurisdictions
EXHIBIT XI	Form of Servicer Notice
EXHIBIT XII	Form of Release Letter
EXHIBIT XIII	Reserved
EXHIBIT XIV	Form of Custodial Delivery Certificate
EXHIBIT XV	Form of Bailee Letter
EXHIBIT XVI	Underwriting Guidelines
EXHIBIT XVII	Future Funding Advance Procedures

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UNCOMMITTED MASTER REPURCHASE AND SECURITIES CONTRACT
AGREEMENT

THIS UNCOMMITTED MASTER REPURCHASE AND SECURITIES CONTRACT AGREEMENT (this “Agreement”), dated as of February 18, 2022 by and between GOLDMAN SACHS BANK USA, a New York state-chartered bank (“Buyer”),and TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company (“Seller”).

ARTICLE 1.APPLICABILITY

From time to time the parties hereto may enter into transactions in which Seller and Buyer agree to the transfer from Seller to Buyer of all of Seller’s rights, title and interest in certain Eligible Assets (as defined herein) or other assets and, in each case, the other related Purchased Items (as defined herein) (collectively, the “Assets”),against the payment of funds by Buyer to Seller, with a simultaneous agreement by Buyer to transfer back to Seller such Assets at a date certain or on demand, against the payment of funds by Seller to Buyer. Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in any exhibits identified herein as applicable hereunder. Each individual transfer of an Eligible Asset shall constitute a distinct Transaction. Notwithstanding any provision or agreement herein, at no time shall Buyer be obligated or committed to purchase any Eligible Asset from Seller or to effect the transfer of any Eligible Asset from Seller to Buyer.

ARTICLE 2.DEFINITIONS

“1934 Act” shall mean the Securities Exchange Act of 1934, as amended.

“Accelerated Repurchase Date” shall have the meaning set forth in Article 13(b)(i) of this Agreement.

“Acceptable Attorney” shall mean an attorney at law that has delivered at Seller’s request a Bailee Letter, with the exception of an attorney that is not satisfactory to Buyer, as specified in a written notice from Buyer to Seller.

“Accepted Servicing Practices” shall mean with respect to any applicable Purchased Asset, those mortgage loan servicing practices of reputable mortgage lending institutions that service mortgage loans of the same type as such Purchased Asset in the jurisdiction where the related underlying real estate directly or indirectly securing or supporting such Purchased Asset is located.

“Act of Insolvency” shall mean, with respect to any Person, (i) the filing of a petition by such Person, commencing, or authorizing the commencement of any case or proceeding under any bankruptcy, insolvency, reorganization, wind up, liquidation, dissolution or similar law relating to the protection of creditors (“Insolvency Law”),or suffering any such petition or proceeding to be commenced by another which is consented to, not timely contested or results in entry of an order for relief; (ii) the seeking or consenting to the appointment of a liquidator, receiver, trustee, custodian or similar official for such Person or any substantial part of the property of such Person; (iii) the appointment of a receiver, conservator, or manager for such Person by any governmental agency or authority having the jurisdiction to do so; (iv) the making of a general assignment for the benefit of creditors; (v) the admission in writing in a legal proceeding by such Person of its inability to pay its debts or discharge its obligations as they become due or mature; (vi) that any Governmental Authority or agency or any person, agency or entity acting or purporting to act under Governmental Authority shall have taken any action to

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condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the property of such Person, or shall have taken any action to displace the management of such Person or to curtail its authority in the conduct of the business of such Person; or (vii) the consent by such Person to the entry of an order for relief in an insolvency case under any Insolvency Law.

“Advance Rate” shall mean, with respect to each Transaction, the initial Advance Rate selected by Buyer for such Transaction on a case by case basis in its sole discretion as shown in the related Confirmation, as may be adjusted for any Future Funding Advance, which in any case shall not exceed the Maximum Advance Rate, unless otherwise agreed to by Buyer and Seller.

“Affiliate”shall mean, when used with respect to any specified Person, (i) any other Person directly or indirectly Controlling, Controlled by, or under common Control with, such Person, or (ii) any “affiliate” of such Person, as such term is defined in the Bankruptcy Code.

“Agreement” shall mean this Uncommitted Master Repurchase and Securities Contract Agreement, dated as of the date hereof, by and between Seller and Buyer as such agreement may be amended, restated, modified or supplemented from time to time.

“Amortization Extension Period” shall mean an extension period commencing on the earlier to occur of the first day after (a) the Outside Repurchase Date or (b) the end of the Renewal Period (as applicable) and ending on the earliest to occur of (i) twenty-four (24) months after the Outside Repurchase Date or the end of the Renewal Period, as applicable, (ii) the date which is the Repurchase Date of the last remaining Purchased Asset subject to a Transaction and (iii) the date on which the payment in full of the unpaid principal balance of the last remaining Purchased Asset then subject to a Transaction occurs; provided, however, in the event Seller elects to exercise the Amortization Extension Period, if either (i) the outstanding principal amount of all Transactions is less than $25,000,000 or (ii) the number of Purchased Assets subject to this Agreement is less than two (2), then, at Buyer’s election, Seller shall repurchase all of the remaining Purchased Assets in full.

“Annual Reporting Package” shall mean the reporting package described on Exhibit III-C.

“Anti-Money Laundering Laws” shall have the meaning set forth in Article 9(b)(xxx) of this Agreement.

“Applicable Spread” shall mean:

(i)so long as no Event of Default shall have occurred and be continuing, the amount set forth in the Fee Letter as being the “Applicable Spread”, and

(ii)after the occurrence and during the continuance of an Event of Default, the (x) applicable incremental percentage described in clause (i) of this definition, plus (y) five percent (5.0%).

“Appraisal” shall mean an appraisal that is compliant with the Financial Institutions Reform, Recovery, and Enforcement Act and prepared by a third-party appraiser addressed to, or permitted to be relied upon by, Buyer and reasonably satisfactory to Buyer of the related Underlying Mortgaged Property from an Independent Appraiser.

“Approved Valuation Agent” shall mean DebtX, PriceServ, CBRE, Mission Capital, Newmark Knight Frank, JLL or Eastdil.

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“Assets”shall have the meaning set forth in Article 1 of this Agreement.

“Assignee” shall have the meaning set forth in Article 19(a) of this Agreement.

“Assignment of Leases” shall mean, with respect to any Purchased Asset that is a Senior Mortgage Loan, any assignment of leases, rents and profits or equivalent instrument, whether contained in the related Mortgage or executed separately, assigning to the holder or holders of such Mortgage all of the related Mortgagor’s interest in the leases, rents and profits derived from the ownership, operation, leasing or disposition of all or a portion of the related Underlying Mortgaged Property as security for repayment of such Purchased Asset.

“Bailee Letter” shall mean a letter substantially in the form as Exhibit XV from an Acceptable Attorney or a Title Company or another Person acceptable to Buyer in its sole discretion, in form and substance acceptable to Buyer in its sole discretion, wherein such Acceptable Attorney, Title Company or other Person described above in possession of a Purchased Asset File (i) acknowledges receipt of such Purchased Asset File, (ii) confirms that such Acceptable Attorney, Title Company or other Person acceptable to Buyer is holding the same as bailee or agent on behalf of Buyer under such letter and (iii) agrees that such Acceptable Attorney, Title Company or other Person described above shall deliver such Purchased Asset File to Custodian, or as otherwise directed by Buyer, by not later than the third (3rd) Business Day following the Purchase Date for the related Purchased Asset.

“Bankruptcy Code” shall mean Title 11 of the United States Code (11 U.S.C. § 101, et. seq.), as amended, modified or replaced from time to time.

“Benchmark” shall mean Term SOFR; provided that if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to Term SOFR or the then current Benchmark, then “Benchmark” shall mean the applicable Benchmark Replacement.

“Benchmark Floor” shall mean zero (0), unless otherwise specified in the Confirmation with respect to the related Transaction.

“Benchmark Interim Unavailability Period”shall mean any Pricing Rate Period for which Buyer determines that (a) adequate and reasonable means do not exist for ascertaining the then-current Benchmark, unless and until a Benchmark Replacement has been implemented with respect thereto pursuant to Article 14 or (b) it is unlawful to use the then-current Benchmark to determine the applicable interest rate.

“Benchmark Replacement” shall mean, with respect to any Benchmark Transition Event, the sum of:

1.the alternate benchmark rate of interest that has been selected by Buyer 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 of interest as a replacement for the then-current Benchmark for U.S. dollar-denominated floating rate commercial mortgage loans at such time (the “Unadjusted Benchmark Replacement”), and

2.the Benchmark Replacement Adjustment;

providedthat, in no event shall the Benchmark Replacement for any Pricing Rate Period be deemed to be less than the Benchmark Floor.

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“Benchmark Replacement Adjustment” shall mean, with respect to any 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 Purchaser giving due consideration to (a) any selection or recommendation by the Relevant Governmental Body or (b) 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 the then-current Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated floating rate commercial mortgage loans at such time.

“Benchmark Replacement Conforming Changes” shall mean, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Pricing Rate Determination Date”, the definition of “Pricing Rate Period,” the timing and frequency of determining rates and making payments of interest, preceding and succeeding business day conventions and other administrative matters) that Purchaser determines may be appropriate or necessary to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by Purchaser in a manner substantially consistent with market practice for repurchase facilities or similar structured finance arrangements (or, if Purchaser determines that adoption of any portion of such market practice is not administratively feasible or if Purchaser determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as Purchaser determines is reasonably necessary in connection with the administration of this Agreement and the other Transaction Documents).

“Benchmark Replacement Date” shall mean the earliest to occur of the following events with respect to the then-current benchmark:

(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 the Benchmark permanently or indefinitely ceases to provide the Benchmark; and

(2)in the case of clause (3) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark has been determined and announced by the regulatory supervisor for the administrator of such Benchmark to be non-representative; provided that such non-representativeness, non-compliance or non-alignment will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if any available tenor of such Benchmark (or such component thereof) continues to be provided on such date.

“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to the then-current Benchmark:

(1)a public statement or publication of information by or on behalf of the administrator of the Benchmark announcing that such administrator has ceased or will cease to provide the Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark;

(2)a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark, the central bank for the currency of the Benchmark, an insolvency official with jurisdiction over the administrator for the Benchmark, a resolution authority with jurisdiction over the administrator for the Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for the Benchmark, which states that the administrator of the Benchmark has ceased or will cease to provide the Benchmark permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark; or

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(3)a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) announcing that the Benchmark (or such component thereof) is not, or as of a specified future date will not be, representative.

“Benchmark Transition Notice” shall have the meaning set forth in Article 14(a).

“Breakage Costs” shall have the meaning set forth thereto in Article 14(f).

“Business Day” shall mean a day other than (i) a Saturday or Sunday, or (ii) a day in which the New York Stock Exchange or banks in the State of New York are authorized or obligated by law or executive order to be closed.

“Buyer” shall mean Goldman Sachs Bank USA, a New York state-chartered bank, or any successor or assign thereof permitted under Article 19.

“Buyer’s LTV” shall mean, on any date, with respect to any Purchased Asset, the quotient (expressed as a percentage) of (i) the then outstanding Purchase Price of such Purchased Asset divided by (ii) the “as-is” value of the related Underlying Mortgaged Property as determined by Buyer in its sole discretion, exercised in good faith.

“Capital Stock” shall mean any and all shares, interests, 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, without limitation, any and all member or other equivalent interests in any limited liability company, any and all partner or other equivalent interests in any partnership or limited partnership, and any and all warrants or options to purchase any of the foregoing.

“Capitalized Lease Obligations” shall mean obligations under a lease that are required to be capitalized for financial reporting purposes in accordance with GAAP. The amount of a Capitalized Lease Obligation is the capitalized amount of such obligation as would be required to be reflected on the balance sheet prepared in accordance with GAAP of the applicable Person as of the applicable date.

“Cause”shall mean, with respect to an Independent Director, (a) acts or omissions by such Independent Director that constitute willful disregard of, or bad faith or gross negligence with respect to, the Independent Director’s duties with respect to Seller’s obligations under this Agreement, (b) such Independent Director has engaged in or has been charged with, or has been convicted of, fraud or other acts constituting a crime under any law applicable to such Independent Director, (c) such Independent Director is unable to perform his or her duties as Independent Director due to death, disability or incapacity, or (d) such Independent Director no longer meets the definition of Independent Director, as that term is defined in this Article 2.

“Change of Control” shall mean the occurrence of any of the following events:

(a)the consummation of a merger or consolidation of Guarantor with or into another entity or any other reorganization or transfer of Capital Stock of Guarantor, if more than forty percent (40%) of the combined voting power of the continuing or surviving entity’s Capital Stock outstanding immediately after such merger or consolidation or such other reorganization or transfer is not owned directly or indirectly by Persons who were stockholders or holders of such Capital Stock of Guarantor immediately prior to such merger or consolidation or such other reorganization or transfer;

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(b)any “person” or “group” (within the meaning of Section 13(d) or Section 14(d) of the 1934 Act) shall become, or obtain rights (whether by means of warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the 1934 Act), directly or indirectly, of a percentage of the total voting power of all classes of Capital Stock of Guarantor entitled to vote generally in the election of directors, members or partners of forty percent (40%) or more;

(c)Guarantor shall cease to own and Control, of record and beneficially, directly or indirectly one hundred percent (100%) of each class of outstanding Capital Stock of Pledgor;

(d)Pledgor shall cease to own and Control, of record and beneficially, directly or indirectly one hundred percent (100%) of each class of outstanding Capital Stock of Seller;

(e)any transfer of all or substantially all of Guarantor’s, Pledgor’s or Seller’s assets (other than any securitization transaction or any repurchase or other similar transaction in the ordinary course of Guarantor’s, Pledgor’s or Seller’s business);

(f)with respect to Manager, the sale, merger, consolidation or reorganization of Manager with or into any entity that is not an Affiliate of Manager as of the Closing Date;

(g)Manager shall cease to be the investment manager for Guarantor other than in connection with any transaction pursuant to which Manager is not replaced; or

(h)any change in Control of Manager from the Person or Persons who are directly or indirectly Controlling Manager on the Closing Date;

provided, however, that notwithstanding anything to the contrary contained in this Agreement, no Change of Control shall be deemed to occur in connection with, and nothing in this Agreement shall limit or prohibit, any IPO Transaction so long as a management contract with a Controlled Affiliate, remains in place.

“Closing Date” shall mean the date of this Agreement.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“Collection Period” shall mean (i) with respect to the first Remittance Date, the period beginning on and including the Closing Date and continuing to and including the calendar day immediately preceding such Remittance Date, and (ii) with respect to each subsequent Remittance Date, the period beginning on and including the immediately preceding Remittance Date and continuing to and including the calendar day immediately preceding the following Remittance Date.

“Concentration Limit” shall mean, the following amounts or maximum percentage concentration limits based, in each case, as of any date of determination, on the aggregate Purchase Price or individual Purchase Price for the applicable Purchased Asset(s), as the case may be, as a percentage of the Maximum Facility Amount as of such date of determination:

(i)for all Purchased Assets for which the Underlying Mortgaged Property consists of hospitality properties and retail properties, in the aggregate, twenty-five percent (25%);

(ii)for any single property type other than multifamily, sixty-five percent (65%);

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(iii)for all Purchased Assets which are non-performing Assets, twenty percent (20%); and

(iv)for any single Purchased Asset, an outstanding Purchase Price of not less than Seven Million Five Hundred Thousand Dollars ($7,500,000) or greater than an amount equal to the product of (x) fifty percent (50%), multiplied by (y) the Maximum Facility Amount.

“Confirmation” shall mean a written confirmation in the form of Exhibit I, duly completed, executed and delivered by Buyer and Seller.

“Connection Income Taxes” 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.

“Control” shall mean, with respect to any Person, the possession of the direct or indirect power to direct or cause the direction of the management or policies of such Person, whether through the ability to exercise voting power, by contract or otherwise. “Control”, “Controlling”, “Controlled” and “under common Control” shall have correlative meanings.

“Controlled Affiliate” shall mean any Affiliate of Terra Capital Partners LLC that (i) is also an Affiliate of Guarantor and (ii) is Controlled by the Person or Persons who are directly or indirectly Controlling Terra Capital Partners LLC and Guarantor on the Closing Date.

“Covenant Compliance Certificate” shall mean a properly completed and executed Covenant Compliance Certificate in form and substance of the certificate attached hereto as Exhibit IX.

“Custodial Agreement” shall mean that certain Custodial Agreement, dated as of the date hereof, by and among Custodian, Seller and Buyer, as amended, modified and/or restated from time to time.

“Custodial Delivery Certificate” shall mean the form executed by Seller in order to deliver the Purchased Asset Schedule and the Purchased Asset File to Buyer or its designee (including Custodian) pursuant to Article 7 of this Agreement, a form of which is attached hereto as Exhibit XIV.

“Custodian” shall mean Computershare Trust Company, National Association, or any successor Custodian appointed by Buyer.

“Default” shall mean any condition or event that, after notice or lapse of time, would constitute an Event of Default.

“Delivery Failure” shall have the meaning set forth in the Bailee Letter.

“Depository” shall mean [JPMorgan Chase Bank, National Association], or any successor Depository appointed by Buyer in its sole discretion.

“Depository Account” shall mean a segregated account, in the name of Seller, in trust for Buyer, established at Depository in accordance with this Agreement, and which is subject to the Depository Agreement.

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“Depository Agreement” shall mean that certain [Deposit Account Control Agreement (Hard Lockbox — Repurchase Agreement)], dated as of the date hereof, among Buyer, Seller and Depository, as amended, modified and/or restated from time to time.

“Draw Fee” shall have the meaning set forth in the Fee Letter, which definition is incorporated herein by reference.

“Due Diligence Package” shall have the meaning set forth in Exhibit VI to this Agreement.

“Early Repurchase Date” shall have the meaning set forth in Article 3(f)(i) of this Agreement.

“Eligible Assets” shall mean any of the following types of assets or loans (a) that are acceptable to Buyer in its sole discretion; (b) on each day, with respect to which the representations and warranties set forth in this Agreement (including the exhibits hereto) are true and correct in all respects except to the extent disclosed in a Requested Exceptions Report approved by Buyer; (c) that have been originated (or are being originated) in accordance with the Underwriting Guidelines; and (d) where the Underlying Mortgaged Property consists of multifamily (including student housing), office, industrial, retail, hospitality, or combinations thereof, or such other types of properties that Buyer may agree to in its sole discretion that are located in the United States of America, its territories or possessions (or elsewhere, in the sole discretion of Buyer):

(i)Senior Mortgage Loans;

(ii)Mezzanine Loans; and

(iii)any other asset or loan types or classifications that are acceptable to Buyer, subject to its consent on all necessary and appropriate modifications to this Agreement and each of the Transaction Documents, as determined by Buyer in its sole discretion.

Notwithstanding anything to the contrary contained in this Agreement, the following shall not be Eligible Assets for purposes of this Agreement: (i) non-performing loans, except to the extent otherwise approved by Buyer in its sole discretion and provided that such non-performing loans may not exceed twenty percent (20%) of the Maximum Facility Amount; (ii) any Asset, where payment of the Purchase Price with respect thereto would cause the aggregate of all Repurchase Prices to exceed the Maximum Facility Amount; (iii) omitted; (iv) loans for which Buyer is relying on an Appraisal and the applicable Appraisal is not dated within one-hundred eighty (180) calendar days of the proposed Purchase Date (or such other time period as approved by Buyer in Buyer’s sole discretion); (v) loans in which the related loan agreement or other documents and/or instruments evidencing such loans contain restrictions on transfer of lender’s interest therein; (vi) ground-up construction loans or land loans (provided, that, loans allowing for advances relating to tenant improvements or renovations may be Eligible Assets; provided, further, that Buyer may, in its sole discretion, on a case-by-case basis, consider purchasing an otherwise Eligible Asset that is a construction loan or a land loan); (vii) Assets that, upon becoming a Purchased Asset, have a Mortgaged Property LTV greater than eighty percent (80%) (provided, that Buyer may in its sole discretion, on a case by case basis, consider purchasing an otherwise Eligible Asset with a Mortgaged Property LTV of up to eighty-five percent (85%)); (viii) loans that are in special servicing; (ix) Assets that are pledged as collateral to any lender or sold to any buyer in connection with a loan, repurchase facility or any other financing transaction; (x) unless otherwise agreed to by Buyer in its sole discretion, Assets that are not originated by Seller or an Affiliate of Seller; (xi) Assets that, upon becoming a Purchased Asset, would cause the Purchase Price of the applicable Purchased Asset or the aggregate

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Purchase Price of the applicable Purchased Assets to violate the Concentration Limit; (xii) Mezzanine Loans where the Senior Mortgage Loan on the Underlying Mortgaged Property associated with such Mezzanine Loan is not a Purchased Asset; and (xiii) assets secured directly or indirectly by loans described in the preceding clauses (i) through (xii).

“Environmental Law” shall mean any federal, state, foreign or local statute, law, rule, regulation, ordinance, code, guideline, written policy and rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment, employee health and safety or hazardous materials, including, without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 etseq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 etseq.; the Clean Air Act, 42 U.S.C. § 7401 etseq.; the Safe Drinking Water Act, 42 U.S.C. § 3803 etseq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 etseq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 etseq.; the Hazardous Material Transportation Act, 49 U.S.C. § 1801 etseq. and the Occupational Safety and Health Act, 29 U.S.C. § 651 etseq.; and any state and local or foreign counterparts or equivalents, in each case as amended from time to time.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder. Article references to ERISA are to ERISA, as in effect at the date of this Agreement and, as of the relevant date, any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.

“ERISA Affiliate” shall mean any corporation or trade or business that is a member of any group of organizations (i) described in Article 414(b) or (c) of the Code of which Seller is a member and (ii) solely for purposes of potential liability under Article 302(c)(11) of ERISA and Article 412(c)(11) of the Code and the lien created under Article 302(f) of ERISA and Article 412(n) of the Code, described in Article 414(m) or (o) of the Code of which Seller is a member.

“Event of Default” shall have the meaning set forth in Article 13 of this Agreement.

“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to Buyer or any Transferee, or required to be withheld or deducted from a payment to Buyer or any Transferee: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of Buyer or such Transferee being organized under the laws of or having its principal office, or its applicable lending office located in the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes; (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of Buyer or such Transferee under this Agreement pursuant to a law in effect on the date on which (i) Buyer or such Transferee acquires an interest hereunder (other than pursuant to an assignment request by Seller under Article 14(m)) or (ii) Buyer or such Transferee changes its lending office, except in each case to the extent that, pursuant to Article 14(g) and 14(j), amounts with respect to such Taxes were payable either to Buyer’s or such Transferee’s assignor immediately before Buyer or such Transferee acquired an interest hereunder or to Buyer or such Transferee immediately before it changed its lending office; (c) Taxes attributable to Buyer or such Transferee’s failure to comply with Article 14(k); or (d) any U.S. federal withholding Taxes imposed under FATCA.

“Exit Fee” shall have the meaning set forth in the Fee Letter, which definition is incorporated herein by reference.

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“FATCA” 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 and any agreements entered into pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory legislation, rules or official practices implementing any intergovernmental agreement, treaty or convention among Governmental Authorities entered into in connection thereto.

“FATF”shall have the meaning set forth in the definition of “Prohibited Investor.”

“FDIA”shall have the meaning set forth in Article 23(c) of this Agreement.

“Fee Letter” shall mean that certain Fee Letter, dated as of the date hereof, by Buyer to Seller, and accepted and agreed to by Seller, as amended, modified and/or restated from time to time.

“Filings” shall have the meaning set forth in Article 6(c) of this Agreement.

“Financing Lease” shall mean any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee.

“Fitch” shall mean Fitch Ratings, Inc.

“Foreign Buyer” shall mean (a) if the Seller is a U.S. Person, a Buyer that is not a U.S. Person, and (b) if the Seller is not a U.S. Person, a Buyer that is resident or organized under the laws of a jurisdiction other than that in which the Seller is resident for tax purposes.

“Future Funding Advance” shall have the meaning set forth in Article 3(i) of this Agreement.

“Future Funding Date” shall mean, with respect to any Purchased Asset, the date on which Buyer advances any portion of the Future Funding Advance related to such Purchased Asset in accordance with the terms and provisions of this Agreement.

“Future Funding Due Diligence Package” shall have the meaning set forth in Exhibit XVI hereto.

”GAAP” shall mean United States generally accepted accounting principles consistently applied as in effect from time to time.

“Governmental Authority” shall mean any national or federal government, any state, regional, local or other political subdivision thereof with jurisdiction and any Person with jurisdiction exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any such government or subdivision thereof (including any supra-national bodies such as the European Union or the European Central Bank).

“Guarantee Agreement” shall mean that certain Guarantee Agreement, dated as of the date hereof, by Guarantor in favor of Buyer, as amended, restated, supplemented or otherwise modified and in effect from time to time.

“Guarantor” shall mean Terra Property Trust, Inc., a Maryland corporation.

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“Income” shall mean, with respect to any Purchased Asset at any time, (a) any collections of principal, interest, dividends, receipts or other distributions or collections (including casualty or condemnation proceeds), and (b) all net sale proceeds received by Seller or any Affiliate of Seller in connection with a sale or liquidation of such Purchased Asset; provided, that, Underlying Purchased Asset Reserves shall not be included in the term “Income” unless and until, with respect to a particular Purchased Asset, (i) an event of default exists under the related Purchased Asset Documents, (ii) the holder of such related Purchased Asset has exercised rights and remedies with respect to such amounts and (iii) such amounts have been applied by the holder of such Purchased Asset to all or a portion of the outstanding indebtedness under the related Purchased Asset Documents.

“Indebtedness” shall mean, for 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) calendar 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 account of such Person; (e) obligations of such Person under repurchase agreements, sale/buy-back agreements or like arrangements; (f) Indebtedness of others guaranteed by such Person; (g) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; (h) Indebtedness of general partnerships of which such Person is secondarily or contingently liable (other than by endorsement of instruments in the course of collection), whether by reason of any agreement to acquire such indebtedness to supply or advance sums or otherwise; (i) Capitalized Lease Obligations of such Person; (j) all net liabilities or obligations under any interest rate, interest rate swap, interest rate cap, interest rate floor, interest rate collar, or other agreement; and (k) all obligations of such Person under Financing Leases.

“Indemnified Amounts” and “Indemnified Parties” shall have the meaning set forth in Article 27 of this Agreement.

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of Seller under any Transaction Document and (b) to the extent not otherwise described in clause (a) of this definition, Other Taxes.

“Independent Appraiser” shall mean an independent professional real estate appraiser who is a member in good standing of the American Appraisal Institute, and, if the state in which the subject Underlying Mortgaged Property is located certifies or licenses appraisers, is certified or licensed in such state, and in each such case, who has a minimum of five (5) years’ experience in the subject property type.

“Independent Director” shall mean an individual with at least three (3) years of employment experience serving as an independent director or manager at the time of appointment who is provided by, and is in good standing with, CT Corporation, Corporation Service Company, 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 managers or is not acceptable to the Rating Agencies, another nationally recognized company reasonably approved by Buyer, in each case

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that is not an Affiliate of Seller and that provides professional independent directors or managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an independent director or manager of Seller and is not, and has never been, and will not while serving as an independent director or manager of Seller be:

(a)a member (other than an independent, non-economic “springing” member), partner, equityholder, manager, director, officer or employee of Seller or Seller’s equityholders or Affiliates (other than as an independent director or manager of an Affiliate of Seller that is not in the direct chain of ownership of Seller and that is required by a creditor to be a Single Purpose Entity, provided that such independent director or manager is employed by a company that routinely provides professional independent directors or managers in the ordinary course of business);

(b)a customer, creditor, supplier or service provider (including provider of professional services) to Seller or Seller’s equityholders or Affiliates (other than a nationally-recognized company that routinely provides professional independent directors or managers and other corporate services to Seller or Seller’s equityholders or Affiliates in the ordinary course of its business);

(c)a family member of any such member, partner, equityholder, manager, director, officer, employee, customer, creditor, supplier or service provider; or

(d)a Person that controls or is under common control with (whether directly, indirectly or otherwise) any of (a), (b) or (c) above.

A natural person who otherwise satisfies the foregoing definition other than subparagraph (a) by reason of being the independent director or manager of a single purpose bankruptcy remote entity in the direct chain of ownership of Seller shall not be disqualified from serving as an independent director or manager of Seller, provided that the fees that such individual earns from serving as independent directors or managers of such Affiliates in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year.

“Independent Valuation” shall mean, with respect to any Purchased Asset, a bona-fide determination of the fair market value of such Purchased Asset as determined by an Approved Valuation Agent.

“Investment Company Act” shall have the meaning set forth in Article 9(b)(xv) of this Agreement.

“IPO Transaction” shall mean any public offering involving the issuance of direct or indirect common equity interests in Guarantor or any Person to which the assets of Guarantor are contributed, including pursuant to an “UPREIT” structure, on a nationally recognized stock exchange in an underwritten primary public offering (other than a public offering pursuant to a registration statement on Form S-4, S-8 or any other similar form) pursuant to an registration statement filed with and declared effective by the Securities and Exchange Commission in accordance with the Securities Act of 1933 (whether alone or in connection with a secondary public offering).

“IRS” shall mean the United States Internal Revenue Service.

”Knowledge” shall mean, with respect to any Person, the actual knowledge of such Person, which in turn shall mean, collectively, the actual present knowledge (as distinguished from implied, imputed or constructive knowledge) of such Person’s employee or officer that is in charge of asset management of a Purchased Asset and such Person’s investment committee

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members. “Known”, “Knowingly” or other variations of Knowledge shall have meanings correlative thereto.

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Financing Lease having substantially the same economic effect as any of the foregoing), and the filing of any financing statement under the UCC or comparable law of any jurisdiction in respect of any of the foregoing.

“Manager” shall mean Terra REIT Advisors, LLC, or any Affiliate of Terra REIT Advisors, LLC that is also an Affiliate of Guarantor, in each case in its capacity as investment manager for Guarantor.

“Mandatory Early Repurchase Date” shall have the meaning set forth in Article 3(f)(ii).

“Mandatory Early Repurchase Event” shall mean, one or more of the following with respect to any Purchased Asset, in each case as determined by Buyer in its sole discretion: (a) a monetary or material non-monetary event of default has occurred and is continuing beyond any applicable notice and cure period under the related Purchased Asset Documents, without regard to any waivers or modifications of, or amendments to, the related loan documents or other asset documentation, other than those that were (x) disclosed in writing to Buyer prior to the Purchase Date of the related Purchased Asset, or (y) consented to in writing by Buyer in accordance with the terms of this Agreement, or (z) waivers of de minimis fees or costs of less than $25,000 or related to de minimis reallocations of reserves, (b) a material breach of the applicable representations and warranties set forth on Exhibit V hereto (except as disclosed in a Requested Exceptions Report and as approved by Buyer in writing), (c) as to which an Act of Insolvency shall have occurred with respect to the related Mortgagor, sponsor or guarantor with respect to such Purchased Asset, (d) where any mortgagor, participant or co-lender having an interest in such Purchased Asset or any related Underlying Mortgaged Property that is senior to, or pan passu with, in right of payment or priority with the rights of Buyer in such Purchased Asset shall be delinquent beyond any applicable cure period in the payment of amounts due under the related loan documents, (e) as to which an Act of Insolvency has occurred with respect to any mortgagee, participant, co-lender having an interest in such Purchased Asset or any related Underlying Mortgaged Property that is senior to, or pari passu with, the rights of Buyer in such Purchased Asset, (f) the related Purchased Asset File or any portion thereof is subject to a continuing Delivery Failure or has been released from the possession of Custodian under the Custodial Agreement to anyone other than Buyer or any Affiliate of Buyer except in accordance with the terms of the Custodial Agreement, (g) such Purchased Asset has gone into special servicing, however so defined in any applicable servicing, or pooling and servicing, agreement related to a securitization or similar transaction, or (h) such Purchased Asset fails to qualify for “safe harbor” treatment as described in Article 23; provided that with respect to any Mezzanine Loan, in addition to the foregoing, a Mandatory Early Repurchase Event with respect to such Mezzanine Loan shall be deemed to have occurred to the extent that a Mandatory Early Repurchase Event would have occurred for the related Senior Mortgage Loan.

“Margin Amount” shall mean, with respect to any Purchased Asset, on any date of determination, (A) the Maximum Advance Rate attributable to such Purchased Asset, multiplied by (B) the lesser of (i) the Market Value of such Purchased Asset as of such date, and (ii) the outstanding principal balance of such Purchased Asset.

“Margin Call Dispute” shall have the meaning set forth in Article 4(b).

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“Margin Call Challenge Notice” shall have the meaning set forth in Article 4(b).

“Margin Deficit” shall have the meaning set forth in the Fee Letter, which definition is incorporated herein by reference.

“Margin Deficit Event” shall have the meaning set forth in the Fee Letter, which definition is incorporated herein by reference.

“Margin Deposit” shall have the meaning set forth in Article 4(b).

“Margin Payment Date” shall have the meaning set forth in Article 4(a).

“Margin Deficit Notice” shall have the meaning set forth in Article 4(a).

“Market Disruption Event” shall mean either (a) any event or events shall have occurred in the determination of Buyer made by Buyer with respect to all of its commercial real estate loan repurchase facilities resulting in the effective absence of a “repo market” or related “lending market” for purchasing (subject to repurchase) or financing debt obligations secured by commercial mortgage loans or securities, or an event or events shall have occurred resulting in Buyer not being able to finance Eligible Assets through the “repo market” or “lending market” with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events, or (b) any event or events shall have occurred resulting in the effective absence of a “securities market” for securities backed by Eligible Assets, including, but not limited to the “CMBS/CDO/CLO market”, or an event or events shall have occurred resulting in Buyer not being able to sell securities backed by Eligible Assets at prices which would have been reasonable prior to such event or events, in each case as determined by Buyer.

“Market Value” shall mean, with respect to any Purchased Asset as of any relevant date, the lesser of (i) the price at which such Purchased Asset may be sold in an arm’s length transaction to a third party (without regard to any unpaid Price Differential that has accrued but it not yet due and payable), as determined by Buyer in its sole discretion exercised in good faith, and (ii) the unpaid principal balance of such Purchased Asset.

“Material Adverse Effect” shall mean a material adverse effect on (a) the property, business, operations or financial condition of Seller, Pledgor, or Guarantor, (b) the ability of Seller, Pledgor or Guarantor to perform its obligations under any of the Transaction Documents, (c) the validity or enforceability of any of the Transaction Documents, or (d) the rights and remedies of Buyer under any of the Transaction Documents.

“Materials of Environmental Concern” shall mean any toxic mold, any petroleum (including, without limitation, crude oil or any fraction thereof) or petroleum products (including, without limitation, gasoline) or any hazardous or toxic substances, materials or wastes, defined as such in or regulated under any Environmental Law, including, without limitation, asbestos, polychlorinated biphenyls, and urea-formaldehyde insulation.

“Maximum Advance Rate” shall have the meaning set forth in the Fee Letter, which definition is incorporated herein by reference.

“Maximum Buyer’s LTV” shall have the meaning set forth in the Fee Letter, which definition is incorporated herein by reference.

“Maximum Facility Amount” shall mean Two Hundred Million Dollars ($200,000,000).

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“Mezzanine Borrower” shall mean the obligor on a Mezzanine Note, including any Person who has assumed or guaranteed the obligations of the obligor thereunder.

“Mezzanine Loans” shall mean performing loans secured by pledges of all of the equity interests in entities that own, directly or indirectly, commercial properties that serve as collateral for Senior Mortgage Loans.

“Mezzanine Note” shall mean the promissory note, if any, that was executed and delivered in connection with a Mezzanine Loan.

“Minimum Aggregate Draw Fee” shall have the meaning set forth in the Fee Letter, which definition is incorporated herein by reference.

“Minimum Purchase Price Debt Yield” shall have the meaning set forth in the Fee Letter, which definition is incorporated herein by reference.

“Monthly Reporting Package” shall mean the reporting package described on Exhibit III-A.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Mortgage” shall mean a mortgage, deed of trust, deed to secure debt, charge or other instrument, creating a valid and enforceable first Lien on or a first priority ownership interest in an estate in fee simple or term of years in real property and the improvements thereon, securing evidence of indebtedness.

“Mortgage Note” shall mean a note or other evidence of indebtedness of a Mortgagor with respect to a Senior Mortgage Loan.

“Mortgaged Property LTV” shall mean, with respect to any Purchased Asset, the ratio of the aggregate outstanding principal balance of such Purchased Asset (which shall include such Purchased Asset and all debt senior to or pan passu with such Purchased Asset) secured, directly or indirectly, by the related Underlying Mortgaged Property, to the aggregate “as-is” value of such Underlying Mortgaged Property as determined by Buyer in its sole discretion based on an Appraisal provided by Seller.

“Mortgagor” shall mean, with respect to a Senior Mortgage Loan, the obligor on a Mortgage Note and the grantor of the related Mortgage.

“Multiemployer Plan” shall mean a multiemployer plan defined as such in Article 3(37) of ERISA to which contributions have been, or were required to have been, made by Seller or any ERISA Affiliate and that is covered by Title W of ERISA.

“New Asset” shall mean an Eligible Asset that Seller proposes to be included as a Purchased Item which Eligible Asset has not yet become a Purchased Asset.

“OFAC”shall have the meaning specified in the definition of “Prohibited Investor”.

“Originated Asset” shall mean any Eligible Asset originated by Seller or an Affiliate of Seller.

“Other Connection Taxes” shall mean, with respect to Buyer and any Transferee, Taxes imposed as a result of a present or former connection between Buyer or such Transferee and the jurisdiction imposing such Tax (other than connections arising from Buyer or such Transferee

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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 Transaction Document, or sold or assigned an interest in any Transaction Document).

“Other Taxes” shall mean all 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 Transaction Document, except for (i) any such Taxes or Other Connection Taxes imposed with respect to an assignment, transfer or sale of participation or other interest in or with respect to the Transaction Documents (other than an assignment made pursuant to Article 14(m)), and (ii) for the avoidance of doubt, any Excluded Taxes.

“Outside Repurchase Date” shall mean February 18, 2024, as such date may be extended pursuant to Article 3(i).

“Outside Repurchase Date Renewal Conditions” shall have the meaning set forth in Article 3(i) of this Agreement.

“Participant Register” shall have the meaning set forth in Article 19(c) of this Agreement.

“Participants” shall have the meaning set forth in Article 19(a) of this Agreement.

“Permitted Encumbrances” shall mean, with respect to each Purchased Asset, (a) any lien or security interest created by this Agreement and the other Transaction Documents, (b) all liens, encumbrances and other matters disclosed in the applicable Title Policy, (c) liens, if any, for Taxes imposed by any Governmental Authority not yet due or delinquent, (d) leases, equipment leases, or other similar instruments entered into in accordance with the Purchased Asset Documents, (e) mechanics’ liens, materialmen’s liens and other recorded encumbrances which are being contested in accordance with the Purchased Asset Documents, bonded over, escrowed for or insured against by the applicable Title Policy, and (f) liens and encumbrances incurred in accordance with the terms of the Purchased Asset Documents.

“Person” shall mean an individual, corporation, limited liability company, business trust, partnership, joint tenant or tenant in common, trust, joint stock company, joint venture, unincorporated organization, or any other entity of whatever nature, or a Governmental Authority.

“Plan”shall mean an employee pension benefit plan (within the meaning of Section 3(2) of ERISA) established or maintained by Seller or any ERISA Affiliate during the five year period ended prior to the date of this Agreement or to which Seller or any ERISA Affiliate makes, is obligated to make or has, within the five year period ended prior to the date of this Agreement, been required to make contributions and that is covered by Title IV of ERISA or Article 302 of ERISA or Article 412 of the Code, other than a Multiemployer Plan.

“Plan Asset Regulations” shall mean the regulations promulgated at 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA.

“Plan Party” shall have the meaning set forth in Article 22(a) of this Agreement.

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“Pledge and Security Agreement” shall mean that certain Pledge and Security Agreement, dated as of the date hereof, by Pledgor in favor of Buyer, as the same may be amended, restated, supplemented, replaced or otherwise modified from time to time, pledging all of Pledgor’s interest in the Capital Stock of Seller to Buyer.

“Pledgor” shall mean Terra Mortgage Portfolio I, LLC, a Delaware limited liability company.

“Pre-Existing Asset” shall mean any Eligible Asset that is not an Originated Asset.

“Pre-Purchase Due Diligence” shall have the meaning set forth in Article 3(b) hereof.

“Pre-Purchase Legal Expenses” shall mean all of the reasonable and necessary out of pocket legal fees, costs and expenses incurred by Buyer in connection with the Pre-Purchase Due Diligence associated with Buyer’s decision as to whether or not to enter into a particular Transaction.

“Prescribed Laws” shall mean, collectively, (a) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) (the “USA Patriot Act”),(b) Executive Order 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, (c) the International Emergency Economic Power Act, 50 U.S.C. §1701 et. seq., (d) the Bank Secrecy Act (31 U.S.C. Sections 5311 et seq.) as amended and (e) all other Requirements of Law relating to money laundering or terrorism, including without limitation, the USA Patriot Act and all regulations and executive orders promulgated with respect to money laundering or terrorism, including, without limitation, those promulgated by the Office of Foreign Assets Control of the United States Department of the Treasury.

“Price Differential” shall mean, with respect to any Purchased Asset as of any date, the aggregate amount obtained by daily application of the applicable Pricing Rate for such Purchased Asset to the outstanding Purchase Price of such Purchased Asset on a 360-day-per-year basis for the actual number of days during each Pricing Rate Period commencing on (and including) the Purchase Date for such Purchased Asset and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Purchased Asset).

“Pricing Rate” shall mean, for any Pricing Rate Period with respect to a Purchased Asset, an annual rate equal to the sum of (i) the Benchmark and (ii) the relevant Applicable Spread. The Pricing Rate shall be subject to adjustment and/or conversion as provided in the Transaction Documents or the related Confirmation.

“Pricing Rate Determination Date” shall mean with respect to any Transaction (i) with respect to the first Pricing Rate Period, the related Purchase Date for such Purchased Asset and (ii) with respect to any subsequent Pricing Rate Period, the date that is two (2) Business Days prior to the first (1st) day of such Pricing Rate Period.

“Pricing Rate Period” shall mean, with respect to any Transaction and any Remittance Date (a) in the case of the first Pricing Rate Period, the period commencing on and including the Purchase Date for such Transaction and ending on and excluding the following Remittance Date, and (b) in the case of any subsequent Pricing Rate Period, the period commencing on and including the immediately preceding Remittance Date and ending on and excluding such Remittance Date; provided, however, that in no event shall any Pricing Rate Period for a Purchased Asset end subsequent to the Repurchase Date for such Purchased Asset.

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“Primary Servicer” shall mean Trimont Real Estate Advisors, LLC, or any other primary servicer approved by, or in the case of a termination of Primary Servicer pursuant to Article 29(c), appointed by Seller, and approved by Buyer, in each case in Buyer’s sole discretion.

“Primary Servicing Agreement” shall mean the Servicing and Asset Management Agreement by and among Primary Servicer and Mavik Capital Management, LP, dated November 8, 2021, as amended by that Joinder and Statement of Work #3, between Primary Servicer and Seller, dated as of the date hereof, and, if any other Primary Servicer is approved by Buyer in its sole discretion, any servicing agreement with such other Primary Servicer in respect of the Purchased Assets, which agreement is approved by Buyer in its sole discretion.

“Principal Payment” shall mean, with respect to any Purchased Asset, any scheduled or unscheduled payment or prepayment of principal received in respect thereof (including net sale proceeds or casualty or condemnation proceeds to the extent that such proceeds are not required under the related Purchased Asset Documents to be reserved, escrowed, readvanced or applied for the benefit of the Mortgagor or the related Underlying Mortgaged Property).

“Prohibited Investor” shall mean (1) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons by the Office of Foreign Asset Control (“OFAC”),(2) any Person whose name appears on any list of terrorists, terrorist organizations or narcotics traffickers maintained pursuant to and of the Rules and Regulations of OFAC that Buyer has notified Seller in writing is now included in such list, (3) any Person whose name appears on any list similar to those described in clauses (1) and (2) of this definition maintained by the United States Department of State, the United States Department of Commerce or any other government authority or pursuant to any Executive Order of the President of the United States that Buyer has notified Seller in writing is now included on such list, (4) any foreign shell bank, and (5) any person or entity resident in or whose subscription funds are transferred from or through an account in a jurisdiction that has been designated as a non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering (“FATF”),of which the U.S. is a member and with which designation the U.S. representative to the group or organization continues to concur. See http://fatf-gati.org for FATF’s list of Non-Cooperative Countries and Territories.

“Prohibited Transferee” shall mean any of the Persons listed on Schedule I attached to this Agreement.

“Purchase Agreement” shall mean any purchase agreement between Seller and any Transferor pursuant to which Seller purchased or acquired an Asset that is subsequently sold to Buyer hereunder, which Purchase Agreement shall contain general market terms.

“Purchase Date” shall mean, with respect to any Purchased Asset, the date on which Buyer purchases such Purchased Asset from Seller hereunder.

“Purchase Price” shall mean, with respect to any Purchased Asset, the price at which such Purchased Asset is transferred by Seller to Buyer on the applicable Purchase Date, adjusted after the Purchase Date as set forth below. The Purchase Price as of the Purchase Date for any Purchased Asset shall be an amount (expressed in dollars) equal to the product obtained by multiplying (i) the Market Value of such Purchased Asset by (ii) the Advance Rate for such Purchased Asset, as set forth on the related Confirmation. The Purchase Price of any Purchased Asset shall be (a) decreased by (x) any amount of Margin Deficit transferred by Seller to Buyer pursuant to Article 4(a) and applied to the Purchase Price of such Purchased Asset, (y) the portion of any Principal Payments on such Purchased Asset that are applied pursuant to Article 5

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hereof to reduce such Purchase Price and (z) any other amounts paid to Buyer by Seller to reduce such Purchase Price and (b) increased by any Future Funding Advance or by any other amounts disbursed by Buyer to Seller or to the related borrower on behalf of Seller with respect to such Purchased Asset to the related borrower on behalf of Seller with respect to such Purchased Asset; provided, however, that notwithstanding the foregoing, the Purchase Price with respect to any Mezzanine Loan shall not exceed Zero Dollars and No/100 ($0).

“Purchase Price Debt Yield” shall mean, on any date with respect to any Purchased Asset, a fraction (expressed as a percentage) (A) the numerator of which is the Underwritten Net Operating Income of the Underlying Mortgaged Property for such Purchased Asset, as determined by Buyer in its sole discretion, and (B) the denominator of which is the outstanding Purchase Price of such Purchased Asset on such date.

“Purchased Asset” shall mean (i) with respect to any Transaction, the Eligible Asset sold by Seller to Buyer in such Transaction and (ii) with respect to the Transactions in general, all Eligible Assets sold by Seller to Buyer (other than Purchased Assets that have been repurchased by Seller).

“Purchased Asset Documents” shall mean, with respect to a Purchased Asset, the documents specified in Schedule II.

“Purchased Asset File” shall mean, with respect to a Purchased Asset, the Purchased Asset Documents, together with any additional documents and information required to be delivered to Buyer or its designee (including Custodian) pursuant to this Agreement.

“Purchased Asset Schedule” shall mean a schedule of Purchased Assets attached to each Trust Receipt and Custodial Delivery Certificate delivered in accordance with the Custodial Agreement.

“Purchased Items” shall have the meaning set forth in Article 6(a) of this Agreement.

“Quarterly Reporting Package” shall mean the reporting package described on Exhibit III-B.

“Rating Agency” shall mean any of Fitch, Moody’s, S&P, DBRS, Inc. and Kroll Bond Rating Agency Inc.

“Register” shall have the meaning set forth in Article 19(b) of this Agreement.

“REIT” means a “real estate investment trust” as defined in Sections 856 through 860 of the Code.

“Release Letter” shall mean a letter substantially in the form of Exhibit XII hereto (or such other form as may be acceptable to Buyer).

“Relevant Governmental Body”shall mean the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

“Remittance Date” shall mean the twentieth (20th) calendar day of each calendar month, or the immediately succeeding Business Day, if such calendar day shall not be a Business Day, or such other day as is mutually agreed to by Seller and Buyer.

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“Renewal Fee” shall have the meaning set forth in the Fee Letter, which definition is incorporated herein by reference.

“Renewal Period” shall have the meaning set forth in Article 3(i)(i) of this Agreement.

“Repurchase Date” shall mean, with respect to a Purchased Asset, the earliest to occur of (i) the Termination Date, (ii) the date set forth in the applicable Confirmation or if such Transaction is extended, the date to which it is extended provided, that the Repurchase Date shall not be extended beyond the Termination Date; (iii) any Early Repurchase Date for such Transaction; (iv) the Accelerated Repurchase Date, (v) any Mandatory Early Repurchase Date for such Transaction; and (vi) the date that is two (2) Business Days prior to the maturity date of such Purchased Asset (subject to extension, if applicable, in accordance with the related Purchased Asset Documents).

“Repurchase Obligations” shall have the meaning set forth thereto in Article 6(a).

“Repurchase Price” shall mean, with respect to any Purchased Asset as of any Repurchase Date or any date on which the Repurchase Price is required to be determined hereunder, the price at which such Purchased Asset is to be transferred from Buyer to Seller; such price will be determined in each case as the sum of the (i) outstanding Purchase Price of such Purchased Asset; (ii) the accreted and unpaid Price Differential with respect to such Purchased Asset as of the date of such determination (other than, with respect to calculations in connection with the determination of a Margin Deficit, accreted and unpaid Price Differential for the current Pricing Rate Period); (iii) any other amounts due and owing by Seller to Buyer and its Affiliates pursuant to the terms of this Agreement with respect to such Purchased Asset as of such date; and (iv) if such Repurchase Date is not a Remittance Date, any Breakage Costs payable in connection with such repurchase other than with respect to the determination of a Margin Deficit.

“Requested Exceptions Report” shall have the meaning set forth thereto in Article 3(c)(vii).

“Requirement of Law” shall mean any law, treaty, rule, regulation, code, directive, policy, order or requirement or determination of an arbitrator or a court or other Governmental Authority whether now or hereafter enacted or in effect.

“Responsible Officer” shall mean any executive officer of Seller or Guarantor, as the context may require.

“S&P”shall mean Standard and Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

“Sanctions” shall have the meaning set forth in Article 9(b)(xxviii).

“SEC”shall have the meaning set forth in Article 24(a) of this Agreement.

“Seller”shall mean the entity identified as “Seller” in the Recitals hereto and such other sellers as may be approved by Buyer in its sole discretion from time to time.

“Senior Mortgage Loans” shall mean whole, performing senior commercial floating rate mortgage loans.

“Servicing Agreement” shall have the meaning set forth in Article 29(b). “Servicing Records” shall have the meaning set forth in Article 29(b).

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“Servicing Rights” shall mean contractual, possessory or other rights of any Person to administer, service or subservice any Purchased Assets (or to possess any Servicing Records relating thereto), including: (i) the rights to service and/or sub-service the Purchased Assets; (ii) the right to receive compensation (whether direct or indirect) for such servicing and/or sub-servicing, including the right to receive and retain the related servicing fee and all other fees with respect to such Purchased Assets; and (iii) all rights, powers and privileges incidental to the foregoing, together with all Servicing Records relating thereto.

“Servicing Tape” shall have the meaning specified in Exhibit III-B hereto.

“Significant Modification” shall mean (a) any extension (other than contracted for extensions in accordance with the terms of any Purchased Asset Documents), amendment, waiver, termination, rescission, cancellation, release, subordination or other modification to the monetary (other than waivers of de minimis fees or costs of less than $25,000 or de minimis reallocations of reserves) or material non-monetary terms of, or any collateral, guaranty or indemnity for, any Purchased Asset or Purchased Asset Document (including, without limitation, any provision related to the amount or timing of any scheduled payment of interest or principal, the validity, perfection or priority of any security interest, or the release of any collateral or obligor except with respect to partial releases of collateral expressly permitted by any Purchased Asset Documents without lender consent), (b) any sale, transfer, disposition or any similar action with respect to any collateral for any Purchased Asset (except to the extent required under the Purchased Asset Documents) or (c) the foreclosure or exercise of any material right or remedy by the holder of any Purchased Asset or Purchased Asset Document.

With respect to any Purchased Asset that is a Mezzanine Loan, any action that constitutes a Significant Modification with respect to the related Senior Mortgage Loan shall constitute a Significant Modification with respect to such Purchased Asset.

“Single Purpose Entity” shall mean any corporation, limited partnership or limited liability company that, since the date of its formation and at all times on and after the date hereof, has complied with and shall at all times comply with the provisions of Article 12 of this Agreement.

“SIPA”shall have the meaning set forth in Article 24(a) of this Agreement.

“Standby Fee” shall have the meaning set forth in the Fee Letter, which definition is incorporated herein by reference.

“Subsidiary” shall mean, as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of Seller and/or Guarantor.

“Table Funded Purchased Asset” shall mean a Purchased Asset which is sold to Buyer simultaneously with the origination or acquisition thereof, which origination or acquisition is financed with the Purchase Price, pursuant to Seller’s request, paid directly to a Title Company or other settlement agent, in each case, approved by Buyer, for disbursement in connection with such origination or acquisition. A Purchased Asset shall cease to be a Table Funded Purchased Asset after Custodian has delivered a Trust Receipt to Buyer certifying its receipt of the Purchased Asset File therefor.

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“Table Funding Fee” shall have the meaning set forth in the Fee Letter, which definition is incorporated herein by reference.

“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Termination Date” shall mean the day that is the later of (a) the Outside Repurchase Date, as such date may be extended pursuant to Article 3(i) and (b) if the Amortization Extension Period is exercised pursuant to and in accordance with Article 3(j) hereof, the last day of such Amortization Extension Period.

“Termination Date Extension Conditions” shall have the meaning specified in Article 3(f).

“Term SOFR” shall mean, for each Pricing Rate Period, the forward-looking term rate for a one-month period that is based on the secured overnight financing rate of the Federal Reserve Bank of New York (or its successor), as published by the Term SOFR Administrator on the applicable Pricing Rate Determination Date; provided, that if, as of 5:00 p.m. (New York City time) on any Pricing Rate Determination Date, such rate has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to Term SOFR has not occurred, then Term SOFR will be determined as of the first preceding U.S. Government Securities Business Day for which such rate was published by the Term SOFR Administrator, so long as such first preceding U.S. Government Securities Business Day is not more than three U.S. Government Securities Business Days prior to such Pricing Rate Determination Date then a Benchmark Interim Unavailability Period with respect to Term SOFR will be deemed to have occurred. Notwithstanding the foregoing, in no event will Term SOFR be deemed to be less than the Benchmark Floor.

“Term SOFR Administrator” shall mean CME Group Benchmark Administration Limited (CBA) (or a successor administrator of Term SOFR as determined by Purchaser in its reasonable discretion).

“Title Company” shall mean a nationally-recognized title insurance company acceptable to Buyer.

“Title Policy” shall mean an American Land Title Association (ALTA) lender’s title insurance policy or a comparable form of lender’s title insurance policy (or escrow instructions binding on the Title Company and irrevocably obligating the Title Company to issue such title insurance policy, a title policy commitment or pro-forma “marked up” at the closing of the related Purchased Asset and countersigned by the Title Company or its authorized agent) as adopted in the applicable jurisdiction.

“Transaction” shall mean a Transaction, as specified in Article 1 of this Agreement.

“Transaction Documents” shall mean, collectively, this Agreement, any applicable Schedules, Exhibits and Annexes to this Agreement, the Guarantee Agreement, the Custodial Agreement, each Servicing Agreement, the Depository Agreement, the Pledge and Security Agreement, the Fee Letter, all Confirmations and assignment documentation executed pursuant to this Agreement in connection with specific Transactions, each of the foregoing as may be amended, restated, supplemented or modified from time-to-time.

“Transferee” shall have the meaning set forth in Article 19(a) hereof.

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“Transferor” shall mean the seller of an Asset under a Purchase Agreement that is not an Affiliate of Seller.

“Trust Receipt” shall mean a trust receipt issued by Custodian, or, in the case of a Table Funded Purchased Asset, Bailee, to Buyer substantially in the form required under the Custodial Agreement or the Bailee Agreement.

“UCC” shall have the meaning specified in Article 6(c) of this Agreement.

“Underlying Mortgaged Property” shall mean: (i) in the case of a Senior Mortgage Loan, the real property securing such Senior Mortgage Loan; and (ii) in the case of a Mezzanine Loan, the real property that is owned by the Person the equity of which is pledged as collateral security for such Mezzanine Loan.

“Underlying Purchased Asset Reserves” shall mean, with respect to any Purchased Asset, the escrows, reserve funds or other similar amounts properly retained in accounts maintained by the servicer of such Purchased Asset unless and until such funds are, pursuant to and in accordance with the terms of the related Purchased Asset Documents, either (i) released or otherwise available to Seller (but not if such funds are used for the purpose for which they are maintained), or (ii) released to the Mortgagor.

“Underwriting Guidelines” shall mean the underwriting guidelines attached as ExhibitXVIhereto.

”Underwriting Issues” shall mean, with respect to any Purchased Asset as to which Seller intends to request a Transaction, all information known by Seller that, based on the making of reasonable inquiries and the exercise of reasonable care and diligence under the circumstances, would be considered a materially “negative” factor (either separately or in the aggregate with other information), or a defect in loan documentation or closing deliveries (such as any absence of any Purchased Asset Document(s)), to a reasonable institutional mortgage buyer in determining whether to originate or acquire the Purchased Asset in question.

“Underwritten Net Operating Income” shall mean, on any date with respect to any Purchased Asset, the underwritten net operating income from the Underlying Mortgaged Property securing such Purchased Asset as of such date, as determined by Buyer in its sole discretion based on information provided by Seller.

“U.S. Person” means any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.

“USA Patriot Act” shall have the meaning ascribed to such term in the definition of “Prescribed Laws”.

“U.S. Tax Compliance Certificate” shall have the meaning set forth in Article14(k)(B)(3) of this Agreement.

All references to articles, schedules and exhibits are to articles, schedules and exhibits in or to this Agreement unless otherwise specified. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles. References to “good faith” in this Agreement shall mean “honesty in fact in the conduct or transaction concerned”.

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ARTICLE 3.
INITIATION; CONFIRMATION; TERMINATION; FEES

(a)Conditions Precedent to Initial Transaction. Buyer’s agreement to enter into the initial Transaction hereunder is subject to the satisfaction, immediately prior to or concurrently with the making of such Transaction, of the condition precedent that Buyer has received from Seller all of the following documents, each of which shall be satisfactory in form and substance to Buyer and its counsel:

(i)Transaction Documents. The Transaction Documents duly executed by the parties thereto (including all exhibits thereto).

(ii)Power of Attorney. The power of attorney, duly executed by Seller, substantially in the form set forth on Exhibit IV hereto.

(iii)Consents. Any and all consents and waivers of Seller applicable to Seller or to the Purchased Assets;

(iv)Security Interest. UCC financing statements for filing in each of the UCC filing jurisdictions described on Exhibit X hereto, each naming Seller or Pledgor as applicable as “Debtor” and Buyer as “Secured Party” and adequately describing as “Collateral”, with respect to Seller, as “all assets of Seller, whether now owned or existing or hereafter acquired or arising” and, with respect to Pledgor, all of the items set forth in the definition of Collateral in the Pledge and Security Agreement, together with any other documents necessary or requested by Buyer to perfect the security interests granted by Seller in favor of Buyer under this Agreement or any other Transaction Document.

(v)Underwriting Guidelines.    A certified copy of the Underwriting
Guidelines, which shall be in form and substance satisfactory to Buyer.

(vi)Opinions of Counsel. Opinions of outside counsel to Seller, Pledgor and Guarantor, reasonably acceptable to Buyer (including, but not limited to, those relating to enforceability, bankruptcy safe harbor, corporate matters, applicability of the Investment Company Act of 1940 to Seller, Pledgor or Guarantor, and security interests).

(vii)Organizational Documents. Good standing certificates and certified copies of the certificate of incorporation, memorandum and articles of association, charters and by-laws (or equivalent documents) of Seller, Pledgor and Guarantor and of all corporate or other authority for Seller and Guarantor with respect to the execution, delivery and performance of the Transaction Documents and each other document to be delivered by Seller and Guarantor from time to time in connection herewith (and Buyer may conclusively rely on such certificate until it receives notice in writing from Seller to the contrary).

(viii)Recycled SPE Certificate. A duly executed recycled special purpose entity certificate of Terra Mortgage Capital I, LLC.

(ix)Fees and Expenses. Buyer shall have received payment from Seller of an amount equal to the amount of actual costs and expenses, including, without limitation, the reasonable fees and expenses of counsel to Buyer, incurred by Buyer in connection

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with the development, preparation and execution of this Agreement, the other Transaction Documents and any other documents prepared in connection herewith or therewith.

(x)Other Documents. Such other documents, documentation and legal opinions as Buyer may reasonably require.

(b)Due Diligence Review. Buyer shall have the right to review, as described in Exhibit VI hereto, the Eligible Assets that Seller proposes to sell to Buyer in any Transaction and to conduct its own due diligence investigation of such Eligible Assets as Buyer determines (“Pre-Purchase Due Diligence”). Buyer shall be entitled to make a determination, in the exercise of its sole discretion, that, in the case of a Transaction, it shall or shall not purchase any or all of the assets proposed to be sold to Buyer by Seller. Buyer shall inform Seller of its approval of the deliverables required in accordance with Exhibit VI attached hereto. On the Purchase Date for the Transaction, which shall occur upon Buyer’s and Seller’s execution of a Confirmation with respect to an Eligible Asset, the Eligible Assets shall be transferred to Buyer against the transfer of the Purchase Price to an account of Seller. Upon the approval by Buyer of a particular proposed Transaction, Buyer shall deliver to Seller a signed copy of the related Confirmation described in clause 3(c)(v) below, on or before the scheduled Purchase Date of the underlying proposed Transaction, which shall serve as evidence that all conditions relating to the proposed Transactions (as set forth in Article 3(a) or 3(c) or Exhibit VI, or elsewhere, as applicable) have been satisfied or waived by Buyer.

(c)Conditions Precedent to all Transactions. Buyer’s agreement to enter into each Transaction (including the initial Transaction) shall be determined in Buyer’s sole discretion and is otherwise subject to the satisfaction of the following further conditions precedent, both immediately prior to entering into such Transaction and also after giving effect to the consummation thereof and the intended use of the proceeds of the sale:

(i)Seller shall give Buyer no less than ten (10) Business Days’ prior written notice of each Transaction (including the initial Transaction), which notice shall describe the terms of the Transaction and the Purchased Assets;

(ii)The sum of (A) the unpaid Purchase Price for all prior outstanding Transactions and (B) the requested Purchase Price for the pending Transaction, in each case, shall not exceed the Maximum Facility Amount;

(iii)No Market Disruption Event has occurred and is continuing, no Margin Deficit shall exist, and no default or Event of Default has occurred and is continuing under this Agreement or any other Transaction Document;

(iv)No circumstance shall exist or event have occurred resulting in a Material Adverse Effect with respect to Seller, Pledgor, or Guarantor;

(v)Seller and Buyer shall have executed a Confirmation for such proposed Transaction;

(vi)Buyer shall have (i) determined, in its sole discretion, that the Asset proposed to be sold to Buyer by Seller in such Transaction is an Eligible Asset, (ii) satisfactorily completed its “Know Your Customer” and OFAC diligence (as to the related Mortgagor, guarantor and all other related parties, as determined by Buyer), (iii) determined conformity to the terms of the Transaction Documents and Buyer’s internal credit and underwriting criteria, and (iv) obtained internal credit approval, to be granted or denied in Buyer’s sole discretion, for the inclusion of such Eligible Asset as a Purchased Asset in a Transaction, without regard for any prior credit decisions by Buyer

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or any Affiliate of Buyer, and with the understanding that Buyer shall have the absolute right to change any or all of its internal underwriting criteria at any time, without notice of any kind to Seller;

(vii)Seller shall have delivered to Buyer a list of all exceptions to the representations and warranties relating to the Eligible Asset and any other eligibility criteria for such Eligible Asset (the “Requested Exceptions Report”);

(viii)both immediately prior to the requested Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by Seller in each of Exhibit V and Article 9 shall be true, correct and complete on and as of such Purchase Date in all respects 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), subject to such exceptions specified in any Requested Exceptions Report that has been approved by Buyer;

(ix)subject to Buyer’s right to perform one or more due diligence reviews pursuant to Article 28, Buyer shall have completed its due diligence review of the Purchased Asset File, and such other documents, records, agreements, instruments, mortgaged properties or information relating to such Purchased Asset as Buyer in its sole discretion deems appropriate to review, including, without limitation, all external legal due diligence any due diligence relating to lending licensing requirements which may impact Buyer, and such review shall be satisfactory to Buyer in its sole discretion;

(x)with respect to any Eligible Asset to be purchased hereunder on the related Purchase Date that is not primarily serviced by the Primary Servicer, Seller shall have provided to Buyer a copy of the related Servicing Agreement, certified as a true, correct and complete copy of the original, fully executed by Seller and the servicer named in the related Servicing Agreement;

(xi)Seller shall have directed Servicer to remit all payments into the Depository Account and to service such payments in accordance with the provisions of this Agreement;

(xii)Seller shall have paid to Buyer all amounts that are due and payable under this Agreement at the time of such Transaction, including, without limitation, any increased costs that are imposed on Seller pursuant to Article 14, all reasonable legal fees and expenses of outside counsel and the reasonable out-of-pocket costs and expenses actually incurred by Buyer in connection with the entering into of any Transaction hereunder, including, without limitation, costs associated with due diligence, recording or other administrative expenses necessary or incidental to the execution of any Transaction hereunder, which amounts, at Buyer’s option, may be withheld from the sale proceeds of any Transaction hereunder;

(xiii)Buyer shall have reasonably determined that the introduction of, or a change in, any Requirement of Law or in the interpretation or administration of any Requirement of Law and any other increase in cost to Buyer applicable to Buyer has not made it unlawful or impracticable, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into the Transaction;

(xiv)Seller shall have taken such other action as Buyer shall have reasonably requested in order to transfer the Purchased Assets pursuant to this Agreement and to perfect all security interests granted under this Agreement or any other Transaction Document in favor of Buyer with respect to the Purchased Assets;

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(xv)If such Eligible Asset was acquired by Seller from a Person that is not an Affiliate of Seller, Seller shall have disclosed to Buyer the acquisition cost of such Eligible Asset (including therein reasonable supporting documentation required by Buyer, if any);

(xvi)Buyer shall have received all such other and further documents, documentation and legal opinions as Buyer in its reasonable discretion shall reasonably require;

(xvii)Buyer shall have received (i) other than with respect to a Table Funded Purchased Asset, from Custodian on each Purchase Date an Asset Schedule and Exception Report (as defined in the Custodial Agreement) with respect to each Purchased Asset, dated the Purchase Date, duly completed and with exceptions acceptable to Buyer in its sole discretion in respect of Eligible Assets to be purchased hereunder on such Business Day; or (ii) a Bailee Letter from an Acceptable Attorney identifying the applicable Release Letter being held on behalf of Buyer;

(xviii)Unless waived by Buyer in its sole discretion, as of the applicable Purchase Date for such Eligible Asset, the Transaction would not cause the Purchase Price of the applicable Eligible Asset or the aggregate Purchase Price of all Purchased Assets after giving effect to the applicable Transaction, in either such case, to violate any Concentration Limit;

(xix)Unless waived by Buyer in its sole discretion, the Advance Rate relating to such Eligible Asset shall not exceed the Maximum Advance Rate and the Buyer’s LTV for such Eligible Asset shall be no greater than sixty percent (60%) as of the applicable Purchase Date; provided that Buyer’s LTV for any Eligible Asset where the Underlying Mortgaged Property consists of multifamily (including student housing) shall be no greater than sixty-four percent (64%); and provided, further that Buyer’s LTV for any non-performing Asset will be fifty percent (50%);

(xx)Buyer shall have received from Seller the Draw Fee related to such Eligible Asset in accordance with the terms and provisions of the Fee Letter; and

(xxi)(With respect to any Eligible Asset to be purchased hereunder on the related Purchase Date that is a Mezzanine Loan, where the servicer of the Senior Mortgage Loan is not the Primary Servicer, Seller shall have provided to Buyer a copy of the related Servicing Agreement, certified as a true, correct and complete copy of the original, together with a Servicer Notice, fully executed by Seller and such servicer.

(d)Transfer of Purchased Assets; Servicing Rights. Upon the satisfaction of all conditions set forth in Articles 3(a), 3(b) and 3(c), Seller shall sell, transfer, convey and assign to Buyer on a servicing released basis all of Seller’s right, title and interest in and to each Purchased Asset, together with all related Servicing Rights, and Buyer shall pay the Purchase Price to an account of Seller. To the extent any additional limited liability company is formed by division of Seller (and without prejudice to Article 10(b)), Seller shall cause any such additional limited liability company to sell, transfer, convey and assign to Buyer on a servicing released basis all of such additional limited liability company’s right, title and interest in and to the Purchased Asset, together with all related Servicing Rights in the same manner and to the same extent as the sale, transfer, conveyance and assignment by Seller on the Closing Date of all of Seller’s right, title and interest in and to the Purchased Asset, together with all related Servicing Rights. With respect to any Transaction, the Pricing Rate shall be determined initially on the Pricing Rate Determination Date applicable to the first Pricing Rate Period for such Transaction

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and shall be reset on the Pricing Rate Determination Date for each of the next succeeding Pricing Rate Periods for such Transaction. Buyer or its agent shall determine in accordance with the terms of this Agreement the Pricing Rate on each Pricing Rate Determination Date for the related Pricing Rate Period in Buyer’s sole discretion, and notify Seller of such rate for such period each such Pricing Rate Determination Date.

(e)Confirmation. Each Confirmation, together with this Agreement, shall be conclusive evidence of the terms of the Transaction covered thereby. In the event of any conflict between the terms of such Confirmation and the terms of this Agreement with respect to a particular Transaction, the Confirmation shall prevail.

(f)Early Repurchase Date; Mandatory Repurchases.

(i)Seller shall be entitled to terminate a Transaction on demand and repurchase the Purchased Asset subject to a Transaction on any Business Day prior to the Repurchase Date (an “Early Repurchase Date”) upon satisfaction of the following conditions:

(A)No later than two (2) Business Days prior to the proposed Early Repurchase Date, Seller notifies Buyer in writing of its intent to terminate such Transaction and repurchase such Purchased Asset, setting forth the proposed Early Repurchase Date and identifying with particularity the Purchased Asset to be repurchased on such Early Repurchase Date,

(B)on such Early Repurchase Date, Seller pays to Buyer an amount equal to the sum of (x) the Repurchase Price for the applicable Purchased Asset, (y) any other amounts due and payable under this Agreement (including, without limitation, Article 14(f) of this Agreement) with respect to such Purchased Asset against transfer to Seller or its agent of the Purchased Assets,

(C)no Default, Event of Default or Margin Deficit (unless cured by the related repurchase in accordance with the terms and provisions of the Transaction Documents) shall be continuing or would occur or result from such early repurchase;

(D)on such Early Repurchase Date, Seller pays any Exit Fee which may be due and payable in connection with the repurchase of such Purchased Asset in accordance with the terms and conditions of the Fee Letter.

(ii)No repurchase in whole or in part, and no partial reduction of the Purchase Price of any Purchased Asset that is a Senior Mortgage Loan may be made unless the Purchased Asset that is the related Mezzanine Loan (if any) is also repurchased in whole. If any repurchase of a Purchased Asset that is a Senior Mortgage Loan is required pursuant to this Article 3(f), Seller shall also repurchase the related Mezzanine Loan (if any) in full.

(iii)In addition to any other rights and remedies of Buyer under any Transaction Document, upon the occurrence of a Mandatory Early Repurchase Event, Seller shall, in accordance with the procedures set forth in Article 3(f)(i)(B)-(D), and Article 3(h), repurchase the applicable Purchased Asset on the applicable date described in the following sentence. Seller shall perform its repurchase obligations under this Article 3(f)(iii) as follows: (A) within two (2) Business Days after Seller’s Knowledge of the occurrence of such Mandatory Early Repurchase Event, Seller shall notify Buyer of such Mandatory Early Repurchase Event, and (B) within two (2) Business Days after

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Buyer’s receipt of Seller’s notice in accordance with the preceding clause (A) (the “Mandatory Early Repurchase Date”), Seller shall make a payment to Buyer of all of Seller’s available cash on hand, up to a maximum payment amount equal to the total amount required to complete the repurchase of the applicable Purchased Asset, provided that, if Seller does not have sufficient available cash on hand to complete the repurchase of the applicable Purchased Asset as required hereunder, then Seller shall: (1) make a payment to Buyer of all available cash on hand, (2) on or before the Mandatory Early Repurchase Date, communicate to Buyer Seller’s plan for funding the balance required to complete the repurchase of the applicable Purchased Asset, which plan shall be subject to Buyer’s approval in its sole discretion, and (3) provided that Buyer has approved of Seller’s plan for funding the balance, fund the balance on or before the date that is three (3) Business Days after the Mandatory Early Repurchase Date.

(iv)Notwithstanding anything herein to the contrary, in the event that a Mandatory Early Repurchase Event has occurred as a result of a Purchased Asset which was previously a performing Asset becoming a non-performing Asset, then Seller shall notify Buyer of such Mandatory Early Repurchase Event within two (2) Business Days after Seller’s Knowledge of the occurrence of such Mandatory Early Repurchase Event, and Seller shall have the option to request during such two (2) Business Day period that Buyer approve such asset as an Eligible Asset (an “Approval Request”). Buyer shall have ten (10) Business Days after receipt of the Approval Request to approve or disapprove of such Approval Request in its sole and absolute discretion. In the event that Buyer disapproves of such Approval Request, then Seller shall, no later than two (2) Business Days after notice of Buyer’s disapproval of such Approval Request, perform its repurchase obligations under Article 3(f)(iii).

(g)Indemnification. Seller shall indemnify Buyer and hold Buyer harmless from any actual out-of-pocket loss, cost or expense (including, without limitation, attorneys’ fees and disbursements of outside counsel) that Buyer may sustain or incur as a consequence of (i) default by Seller in repurchasing any Purchased Asset on the proposed Early Repurchase Date, after Seller has given written notice in accordance with Article 3(f), (ii) any payment of the Repurchase Price on any day other than a Remittance Date, including Breakage Costs, (iii) a default by Seller in selling Eligible Assets after Seller has notified Buyer of a proposed Transaction and Buyer has agreed in writing to purchase such Eligible Assets in accordance with the provisions of this Agreement, (iv) Buyer’s enforcement of the terms of any of the Transaction Documents, (v) any actions taken to perfect or continue any Lien created under any Transaction Documents, and/or (vi) Buyer entering into any of the Transaction Documents or owning any Purchased Item. A certificate as to such costs, losses, damages and expenses, setting forth the calculations therefor shall be submitted promptly by Buyer to Seller in writing and shall be prima facie evidence of the information set forth therein, absent manifest error.

(h)Repurchase. On the Repurchase Date for any Transaction, termination of the Transaction will be effected by transfer to Seller or its agent of the Purchased Assets being repurchased and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Article 5 of this Agreement) against the simultaneous payment of the Repurchase Price to an account of Buyer.

(i)Outside Repurchase Date. This Agreement shall terminate on the Termination Date.

(i)Notwithstanding the definition of Outside Repurchase Date herein, upon written request of Seller prior to the then current Outside Repurchase Date, provided that all of the conditions listed in clause (ii) below (collectively, the “Outside Repurchase Date Renewal Conditions”) shall have been satisfied, Seller may extend the Outside

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Repurchase Date for one (1) additional one-year period (a “Renewal Period”) by giving notice to Buyer of such extension.

(ii)For purposes of this Article 3(i), the Outside Repurchase Date Renewal Conditions shall have been satisfied if:

(A)Seller shall have given Buyer written notice of Seller’s request to extend the Outside Repurchase Date not less than thirty (30) calendar days prior, and no more than one hundred eighty (180) calendar days prior to the Outside Repurchase Date;

(B)Seller shall have paid to Buyer the Renewal Fee in accordance with the terms and provisions of the Fee Letter;

(C)no Margin Deficit, monetary Default, material non-monetary Default, or Event of Default under this Agreement shall have occurred and be continuing as of the date notice is given and as of the date of the originally scheduled Outside Repurchase Date;

(D)Seller shall have paid to Buyer the Minimum Aggregate Draw Fee.

(j)Amortization Extension Period. Seller has the right, by written notice to Buyer delivered no later than thirty (30) days, but not more than one hundred eighty (180) days, prior to the Outside Repurchase Date or the end of the Renewal Period (as applicable), to an extension of the Termination Date for a period not to exceed the Amortization Extension Period, which extension shall be conditioned solely upon (i) no Margin Deficit, or Event of Default under this Agreement shall have occurred and be continuing, and (ii) all representations and warranties made by the Seller in the Transaction Documents shall be true and correct in all material respects. Seller shall not be permitted to enter into any new Transactions during the Amortization Extension Period.

(k)Future Funding Advance. (i) Subject to Article 4, at any time prior to the Repurchase Date, in the event a future funding is made or is to be made by Seller pursuant to the Purchased Asset Documents for a Purchased Asset, Seller may submit to Buyer a request that Buyer transfer cash to Seller in an amount not to exceed the Maximum Advance Rate multiplied by the amount of such future funding (a “Future Funding Advance”), which Future Funding Advance shall increase the outstanding Purchase Price for such Purchased Asset; provided, however, that Seller may only submit a request for a Future Funding Advance one (1) time per calendar month per Purchased Asset. Buyer’s agreement to make any Future Funding Advance shall be in Buyer’s sole discretion and in any case is subject to the satisfaction of the following conditions precedent, both immediately prior to making such Future Funding Advance and also after giving effect to the consummation thereof:

(A)no Margin Deficit, Default, or Event of Default has occurred and is continuing or would result from the funding of such Future Funding Advance;

(B)the funding of the Future Funding Advance would not cause the aggregate outstanding Purchase Price for all Purchased Assets to exceed the Maximum Facility Amount;

(C)the Future Funding Advance would not cause the Purchase Price of the applicable Purchased Asset or the aggregate Purchase Price of all Purchased Assets, in either such case, to violate any Concentration Limit;

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(D)the amount of the Future Funding Advance is no less than $1,000,000 (except the final advance with respect to a subject Purchased Asset);

(E)Seller shall have demonstrated to Buyer’s satisfaction that all conditions to the future funding under the Purchased Asset Documents have been satisfied; and

(F)Buyer shall have satisfactorily completed all applicable credit approval requirements and the Future Funding Due Diligence.

(ii)Buyer shall have the right, as described in Exhibit XVI, to conduct an additional due diligence investigation of the related Purchased Asset as Buyer determines in its sole discretion (“Future Funding Due Diligence”).

(iii)On the Future Funding Date, which shall occur following the final approval of the Future Funding Advance, Buyer shall transfer cash to Seller as provided in this Article 3(i) (and in accordance with the wire instructions provided by Seller in such request). Upon approval by Buyer of a particular Future Funding Advance pursuant to this Article 3(i), Buyer and Seller shall modify the existing Confirmation for the applicable Transaction to set forth the Future Funding Date, the new Advance Rate, the outstanding Purchase Price and Buyer’s LTV for such Purchased Asset and any other modifications to the terms set forth on the existing Confirmation.

(iv)Notwithstanding anything to the contrary herein, Buyer shall not be obligated to make any Future Funding Advance.

ARTICLE 4.MARGIN MAINTENANCE

(a)Buyer may, at its option in its sole discretion in accordance with the last sentence of this Article 4(a), determine if a Margin Deficit Event has occurred, at any time and from time to time. If a Margin Deficit Event then exists that results in a Margin Deficit, then Buyer may by notice to Seller in the form of Exhibit VII (a “Margin Deficit Notice”) require Seller to make a cash payment in reduction of the outstanding Purchase Price for such Purchased Asset such that, after giving effect to such payment, no Margin Deficit shall exist with respect to the related Purchased Asset. Seller shall perform its payment obligations under this Article 4(a) as follows: within two (2) Business Days after Seller’s receipt of the Margin Deficit Notice from Buyer (the “Margin Payment Date”), Seller shall make a payment to Buyer of all of Seller’s available cash on hand, up to a maximum payment amount equal to the total amount required to be paid by Seller to cure the Margin Deficit with respect to the applicable Purchased Asset, provided that, if Seller does not have sufficient available cash on hand to completely cure such Margin Deficit as required under the second sentence of this Article 4(a), then Seller shall: (A) make a payment to Buyer of all available cash on hand, (B) on or before the Margin Payment Date, communicate to Buyer Seller’s plan for funding the balance required to completely cure such Margin Deficit as required under the second sentence of this Article 4(a), which plan shall be subject to Buyer’s approval in its sole discretion, and (C) provided that Buyer has approved of Seller’s plan for funding the balance, fund the balance on or before the date that is three (3) Business Days after the Margin Payment Date. In making any determination that a Margin Deficit Event has occurred, Buyer shall utilize substantially similar methodologies to those that Buyer utilizes under similar repurchase facilities with similarly-situated sellers and the purchased assets under such repurchase facilities.

(b)In the event that a Margin Deficit exists solely due to a Margin Deficit Event described in clause (i) of the definition of “Margin Deficit Event”, Seller may dispute such

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Margin Deficit in accordance with this Article 4(b) (a “Margin Call Dispute”); provided that (i) no Default or Event of Default has occurred and is continuing as of such date, (ii) Seller shall have given Buyer written notice that such Margin Deficit amount is being disputed within two (2) Business Days after actual knowledge of a Margin Deficit (a “Margin Call Challenge Notice”), provided that Seller may withdraw any such Margin Call Challenge Notice at any time with written notice, and (iii) Seller shall have remitted the full amount of the Margin Deficit to Buyer in accordance with the timing and other requirements set forth in Article 4(b) (the “Margin Deposit”).  Within thirty (30) days of satisfaction of clause (iii) in the prior sentence, Seller may dispute Buyer’s determination of Market Value of the related Purchased Asset bysubmitting to Buyer within such thirty (30) day period an Independent Valuation (which shall nameBuyer as a recipient thereof) of such Purchased Asset obtained from an Approved Valuation Agent at Seller’s expense in accordancewith the following terms and conditions:

(i)If such Independent Valuation is not greater than Buyer’s determination ofMarket Value by a percentage greater than five percent (5%) of Buyer’s determination thereof,then Buyer’s determination of Market Value of such Purchased Asset shall control;

(ii)If such Independent Valuation is greater than Buyer’s determination of MarketValue by a percentage greater than five percent (5%) of Buyer’s determination thereof, then,within thirty (30) days of Buyer’s receipt of such Independent Valuation, Buyer mayelect to either (A) use such Independent Valuation to recalculate the Margin Deficit for therelated Purchased Asset or (B) within such thirty (30) day period, obtain one (1)additional Independent Valuation from an Approved Valuation Agent at Buyer’s expense; provided that Buyer’s failure to elect either of the foregoing subclause (A) or subclause (B) shall be deemed an election of the foregoing subclause (A). In the event Buyer electsto order such additional Independent Valuation the Market Value used by Buyer to recalculate the Margin Deficit for the related Purchased Asset shall be the mean of (x) Buyer’s determination ofMarket Value, (y) the Independent Valuation procured by Seller and (z) the IndependentValuation procured by Buyer. In the event Buyer orders an additional Independent Valuation, Sellershall be named recipient thereof;

(iii)No later than five (5) Business Days after (A) Buyer’s election to use theIndependent Valuation procured by Seller in accordance with Article 4(b)(ii)(A), or (B) Buyer’sreceipt of the additional Independent Valuation in accordance with Article 4(b)(ii)(B), asapplicable, Buyer shall provide Seller with the recalculation of the Margin Deficit, if any, for the relatedMargin Deficit and, in the event that the recalculation of the related Margin Deficit results in alower Margin Deficit amount than the Margin Deposit remitted by Seller in accordance with this Article 4(b)(iii), then Buyer shall remit the difference between such recalculated Margin Deficit and such Margin Deposit to Seller (which remittanceshall correspondingly increase the Purchase Price or reduce any Margin Deficit, as applicable);

(iv)Buyer and Seller shall execute an amended and restated Confirmation for the related Transactionto set forth the outstanding Purchase Price and Mortgaged Property LTV for the affected Purchased Asset andany other reasonably necessary or desirable modifications to the terms set forth on the existing Confirmation as agreed by Seller and Buyer; and

(v)No other Margin Deficit shall remain outstanding beyond all relevant notice and cure periods herein and no monetary or material nonmonetary Default or Event of Default shall have occurred and be continuing.

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(c)The failure of Buyer, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Buyer to do so at a later date. Seller and Buyer each agree that a failure or delay by Buyer to exercise its rights hereunder shall not limit or waive Buyer’s rights under this Agreement or otherwise existing by law or in any way create additional rights for Seller.

ARTICLE 5.INCOME PAYMENTS AND PRINCIPAL PAYMENTS

(a)The Depository Account shall be established at the Depository and shall be subject to the Depository Agreement which shall be executed and delivered concurrently with the execution and delivery of this Agreement. Pursuant to the Depository Agreement, Buyer shall have sole dominion and control over the Depository Account. Seller shall cause all Income in respect of the Purchased Assets, as well as any interest received from the reinvestment of such Income, to be deposited into the Depository Account. In furtherance of the foregoing, Seller shall cause Primary Servicer to remit to the Depository Account all Income received in respect of the Purchased Assets following receipt of properly identified and available funds, on the second (2nd) Business Day following the end of the Collection Period. “Collection Period” per Joinder and SOW #3 to the Primary Servicing Agreement means the 11th day of each month through the 10th day of the following month. All Income in respect of the Purchased Assets shall be deposited directly into, or, if applicable, remitted directly from the applicable underlying collection account to, the Depository Account.

(i)If a Mortgagor, servicer, paying agent, or similar Person with respect to the Purchased Asset remits any Income or other amounts with respect to a Purchased Asset to Seller or any Affiliate of Seller rather than directly to Primary Servicer, Seller shall, or shall cause such Affiliate to, (A) deliver a re-direction letter in form and substance reasonably acceptable to Buyer to the applicable Mortgagor, servicer, paying agent, or similar Person with respect to the Purchased Asset and make other commercially reasonable efforts to cause such Mortgagor, servicer, paying agent, or similar Person with respect to the Purchased Asset to remit such amounts directly to the Primary Servicer and (B) deposit in the Depository Account any such amounts within one (1) Business Day of Seller’s (or its Affiliate’s) receipt thereof.

(b)So long as no Event of Default shall have occurred and be continuing, all Income on deposit in the Depository Account in respect of the Purchased Assets during each Collection Period shall be applied on the related Remittance Date as follows, and all unscheduled Principal Payments on deposit in the Depository Account at any time shall be applied on or before the second (2nd) day immediately following the date any such unscheduled Principal Payment was deposited in the Depository Account as follows:

(i)first, (a) to Custodian for the payment of the fees payable to Custodian pursuant to the Custodial Agreement, then (b) to the Depository pursuant to the Depository Agreement and then (c) to the servicer for payment of the fees payable and other amounts owing to servicer pursuant to the Servicing Agreement (to the extent not withheld from Income deposited into the Depository Account);

(ii)second, to Buyer, an amount equal to any other amounts then due and payable to Buyer or its Affiliates under any Transaction Document (including any accrued and unpaid Price Differential with respect to the Purchased Assets, and outstanding Margin Deficits); and

(iii)third, if a Principal Payment in respect of any Purchased Asset was received, to Buyer an amount equal to the product of the amount of such Principal

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Payment, multiplied by the applicable Advance Rate, to be paid to Buyer and applied by Buyer to reduce the Purchase Price of such Purchased Asset; and

(iv)fourth, during the Amortization Extension Period (if applicable), to Buyer to be applied in reduction of the Purchase Price of the Purchased Assets, an amount equal to one hundred percent (100%) of the remaining Principal Payment received until the Repurchase Price of all Purchased Assets is reduced to zero (0);

(v)fifth, to Seller, the remainder, if any.

If, on any Remittance Date, the amounts deposited in the Depository Account shall be insufficient to make the payments required under (i) through (iii) above of this Article 5(b), and Seller does not otherwise make such payments on such Remittance Date, the same shall constitute an Event of Default hereunder.

(c)If an Event of Default shall have occurred and be continuing, all Income (including, without limitation, any Principal Payments or any other amounts received, without regard to their source) on deposit in the Depository Account in respect of the Purchased Assets shall be applied as determined in Buyer’s sole discretion pursuant to Article 13(b)(iii).

(d)If the amounts remitted to Buyer as provided in Articles 5(b) and 5(c) are insufficient to pay all amounts due and payable from Seller to Buyer under this Agreement or any Transaction Document, whether due to the occurrence of an Event of Default or otherwise, Seller shall remain liable to Buyer for payment of all such amounts and shall pay such amounts when due.

ARTICLE 6.SECURITY INTEREST

(a)Buyer and Seller intend that the Transactions hereunder be sales to Buyer of the Purchased Assets and not loans from Buyer to Seller secured by the Purchased Assets. However, in order to preserve Buyer’s rights under this Agreement in the event that a court or other forum recharacterizes the Transactions hereunder as loans and as security for the performance by Seller of all of Seller’s obligations to Buyer under the Transaction Documents and the Transactions entered into hereunder, or in the event that a transfer of a Purchased Asset is otherwise ineffective to effect an outright transfer of such Purchased Asset to Buyer, Seller hereby assigns, pledges and grants a security interest in all of its right, title and interest in, to and under the Purchased Items (as defined below) to Buyer to secure the payment of the Repurchase Price on all Transactions to which Seller is a party and all other amounts owing by Seller to Buyer hereunder, including, without limitation, amounts owing pursuant to Article 27, and under the other Transaction Documents, and to secure the obligation of Seller or its designee to service the Purchased Assets in conformity with Article 29 and any other obligation of Seller to Buyer under the Transaction Documents and the Transactions entered into hereunder (collectively, the “Repurchase Obligations”). Seller hereby acknowledges and agrees that each Purchased Asset serves as collateral for Buyer under this Agreement and that Buyer has the right, upon the occurrence and continuance of an Event of Default, to realize on any or all of the Purchased Assets in order to satisfy the Seller’s obligations hereunder. Seller agrees to update internal registers, books and records (including, without limitation, to mark its computer records and tapes) to reflect and evidence the interests granted to Buyer hereunder. All of Seller’s right, title and interest in, to and under each of the following items of property, whether now owned or hereafter acquired, now existing or hereafter created and wherever located, is hereinafter referred to as the “Purchased Items”:

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(i)the Purchased Assets and all “securities accounts” (as defined in Section 8-501(a) of the UCC) to which any or all of the Purchased Assets are credited;

(ii)any cash or cash equivalents delivered to Buyer in accordance with Article 4(a).

(iii)the Purchased Asset Documents, Servicing Agreements, Servicing Records, Servicing Rights, all servicing fees relating to the Purchased Assets, insurance policies relating to the Purchased Assets, and collection and escrow accounts and letters of credit relating to the Purchased Assets;

(iv)all “general intangibles”, “accounts”, “chattel paper”, “investment property”, “instruments”, “securities accounts” and “deposit accounts”, each as defined in the UCC, relating to or constituting any and all of the foregoing;

(v)any other items, amounts, rights or properties transferred or pledged by Seller to Buyer under any of the Transaction Documents; and

(vi)all replacements, substitutions or distributions on or proceeds, payments, Income and profits of, and records (but excluding any financial models or other proprietary information) and files relating to any and all of any of the foregoing.

(b)Intentionally omitted.

(c)The security interest of Buyer in the Purchased Items shall terminate only upon termination of Seller’s obligations under this Agreement, and the documents delivered in connection herewith and therewith and the other Transaction Documents, including, for the avoidance of doubt, Seller repurchasing each Purchased Asset. For the avoidance of doubt, Buyer’s security interest in the Purchased Items shall not terminate upon Buyer’s determination of the Market Value of any Purchased Asset to be zero. Upon such termination, Buyer shall (i) deliver to Seller such UCC termination statements and other release documents as may be commercially reasonable, (ii) return the Purchased Assets to Seller and reconvey the Purchased Items to Seller, and (iii) release its security interest in the Purchased Items. For purposes of the grant of the security interest pursuant to this Article 6, this Agreement shall be deemed to constitute a security agreement under the New York Uniform Commercial Code (the “UCC”). Buyer shall have all of the rights and may exercise all of the remedies of a secured creditor under the UCC. In furtherance of the foregoing, (A) Buyer, at Seller’s sole cost and expense, as applicable, shall cause to be filed in such locations as may be necessary to perfect and maintain perfection and priority of the security interest granted hereby, UCC financing statements and continuation statements (collectively, “Filings”), and shall forward copies of such Filings to Seller upon completion thereof, and (B) Seller shall from time to time take such further actions as may be reasonably requested by Buyer to maintain and continue the perfection and priority of the security interest granted hereby (including marking its records and files to evidence the interests granted to Buyer hereunder). Seller hereby authorizes Buyer to file a UCC financing statement naming Seller as debtor and Buyer as secured party and describing the collateral covered thereby as “all Purchased Items, as defined under that certain Uncommitted Master Repurchase and Securities Contract Agreement dated as of February 18, 2022 by and between Debtor and Secured Party, now owned or hereafter acquired”.

(d)Seller hereby pledges to Buyer as security for the performance by Seller of the Repurchase Obligations and hereby grants to Buyer a first priority security interest in all of Seller’s right, title and interest in and to the Depository Account and all amounts and property from time to time on deposit therein and all replacements, substitutions or distributions on or proceeds, payments and profits of, and records and files relating to, the Depository Account.

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ARTICLE 7.PAYMENT, TRANSFER AND CUSTODY

(a)On the Purchase Date for each Transaction, (i) ownership of the Purchased Asset shall be transferred to Buyer or its designee (including any Custodian) against the simultaneous payment of the Purchase Price in immediately available funds to an account of Seller or an Acceptable Attorney pursuant to an escrow letter or other undertaking approved by Buyer, in its sole discretion specified in the Confirmation relating to such Transaction and (ii) Seller hereby sells, transfers, conveys and assigns to Buyer on a servicing-released basis all of Seller’s right, title and interest in and to such Purchased Asset, together with all related Servicing Rights. Subject to this Agreement, Seller may sell to Buyer, repurchase from Buyer and re-sell Eligible Assets to Buyer, but may not substitute other Eligible Assets for Purchased Assets.

(b)Seller shall:

(i)with respect to each Purchased Asset that is not a Table Funded Purchased Asset, (A) not later than 1:00 p.m. (New York time) on the Business Day prior to the related Purchase Date, deliver and release to Custodian (with a copy to Buyer), the Purchased Asset Documents together with any other documentation in respect of such Purchased Asset requested by Buyer, in Buyer’s sole discretion, and (B) on the Purchase Date, cause Custodian to deliver a Trust Receipt confirming receipt of such Purchased Asset Documents; and

(ii)with respect to each Table Funded Purchased Asset, (A) not later than 1:00 p.m. (New York time) on the Purchase Date, deliver or cause Bailee to deliver to Buyer, by electronic transmission, a true and complete copy of the related Mortgage Note with assignment in blank, loan agreement, Mortgage, Title Policy and executed Bailee Agreement, (B) not later than 1:00 p.m. (New York time) on the third (3rd) Business Day following the Purchase Date, deliver or cause Bailee to deliver and release to Custodian (with a copy to Buyer), the Purchased Asset Documents and any other documentation in respect of such Purchased Asset requested by Buyer, in its sole discretion, (C) not later than two (2) Business Days following receipt of such Purchased Asset Documents by Custodian, cause Custodian to deliver a Trust Receipt confirming such receipt, and (D) on or prior to the Purchase Date, pay to Buyer the Table Funding Fee;

provided that if Seller cannot deliver, or cause to be delivered, any of the original Purchased Asset Documents required to be delivered as originals (excluding the Mortgage Note and the Assignment of Mortgage, originals of which must be delivered at the time required under the provisions above), Seller shall deliver a photocopy thereof and an officer’s certificate of Seller certifying that such copy represents a true and correct copy of the original and shall use its best efforts to obtain and deliver such original document within one hundred eighty (180) days after the related Purchase Date (or such longer period after the related Purchase Date to which Buyer may consent in its sole discretion, so long as Seller is, as certified in writing to Buyer not less frequently than monthly, using its best efforts to obtain the original). After the expiration of such best efforts period, Seller shall deliver to Buyer a certification that states, despite Seller’s best efforts, Seller was unable to obtain such original document, and thereafter Seller shall have no further obligation to deliver the related original document.

(c)From time to time, Seller shall forward to Buyer and to Custodian additional copies of, originals of, documents evidencing any assumption, modification, consolidation or extension of a Purchased Asset approved in accordance with the terms of this Agreement, and upon receipt of any such other documents, Custodian shall hold such other documents in accordance with the Custodial Agreement. With respect to all of the Purchased Assets delivered

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by Seller to Buyer, its designee (including Custodian), or the Acceptable Attorney, as the case may be, Seller shall have executed and delivered to Buyer the omnibus power of attorney substantially in the form of Exhibit IV attached hereto irrevocably appointing Buyer its attorney in fact with full power, if an Event of Default has occurred and is continuing, to (i) complete the endorsements of the Purchased Assets, including without limitation the Mortgage Notes, Assignments of Mortgages, and any transfer documents related thereto, (ii) record the Assignments of Mortgages, (iii) prepare and file and record each assignment of mortgage, (iv) take any action (including exercising voting and/or consent rights) with respect to intercreditor agreements, co-lender agreements, recognition agreements or participation agreements, (v) complete the preparation and filing, in form and substance satisfactory to Buyer, of such financing statements, continuation statements, and other UCC forms, as Buyer may from time to time, reasonably consider necessary to create, perfect, and preserve Buyer’s security interest in the Purchased Assets, (vi) enforce Seller’s rights under the Purchased Assets purchased by Buyer pursuant to this Agreement and to, and (vii) take such other steps as may be necessary or desirable to enforce Buyer’s rights against, under or with respect to such Purchased Assets and the related Purchased Asset Files and the Servicing Records. Buyer shall deposit the Purchased Asset Files representing the Purchased Assets, or direct that the Purchased Asset Files be deposited directly, with Custodian, and the Purchased Asset Files shall be maintained in accordance with the Custodial Agreement. If a Purchased Asset File is not delivered to Buyer or its designee (including Custodian), such Purchased Asset File shall be held in trust by Seller or its designee for the benefit of Buyer as the owner thereof. Seller or its designee shall maintain a copy of the Purchased Asset File and the originals of the Purchased Asset File not delivered to Buyer or its designee. The possession of the Purchased Asset File by Seller or its designee is at the will of Buyer for the sole purpose of servicing the related Purchased Asset, and such retention and possession by Seller or its designee is in a custodial capacity only. The books and records (including, without limitation, any computer records or tapes) of Seller or its designee shall be marked appropriately to reflect clearly the sale of the related Purchased Asset to Buyer. Seller or its designee (including Custodian) shall release its custody of the Purchased Asset File only in accordance with written instructions from Buyer, unless such release is required as incidental to the servicing of the Purchased Assets, is in connection with a repurchase of any Purchased Asset by Seller or as otherwise required by law or set forth in the Custodial Agreement.

(d)Buyer hereby grants to Seller a revocable option to direct Buyer with respect to the exercise of all voting and corporate rights with respect to the Purchased Assets (each, a “Revocable Option”) and to vote, take corporate actions and exercise any rights in connection with the Purchased Assets, so long as no monetary Default, material non-monetary Default, or Event of Default has occurred and is continuing. Such Revocable Option is not evidence of any ownership or other interest or right of Seller in any Purchased Asset. Upon the occurrence and during the continuation of a monetary Default, material non-monetary Default, or an Event of Default, and in each case subject to the provisions of the Purchased Asset Documents, the Revocable Option discussed above shall terminate following written notice from Buyer to Seller and thereafter Buyer shall be entitled to exercise all voting and corporate rights with respect to the Purchased Assets without regard to Seller’s instructions (including, but not limited to, if an Act of Insolvency shall occur with respect to Seller, to the extent Seller controls or is entitled to control selection of any servicer, Buyer may transfer any or all of such servicing to an entity satisfactory to Buyer).

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ARTICLE 8.SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

(a)Title to all Purchased Items shall pass to Buyer on the applicable Purchase Date, and Buyer shall have free and unrestricted use of all Purchased Items, subject, however, to the terms of this Agreement, the Servicing Agreement, the Custodial Agreement and the other Transaction Documents. Subject to the provisions of Article 19, nothing in this Agreement or any other Transaction Document shall preclude Buyer from engaging in repurchase transactions with the Purchased Assets or otherwise selling, transferring, pledging, repledging, hypothecating, or rehypothecating the Purchased Items to any Person, other than, prior the occurrence of an Event of Default, a Prohibited Transferee; provided that no such transaction shall relieve Buyer of its obligations to transfer the Purchased Items to Seller pursuant to Article 3 of this Agreement or of Buyer’s obligation to credit or pay Income to, or apply Income to the obligations of, Seller pursuant to Article 5 hereof, or of Buyer’s obligations pursuant to Article 19 hereof.

(b)Nothing contained in this Agreement or any other Transaction Document shall obligate Buyer to segregate any Purchased Assets delivered to Buyer by Seller. Notwithstanding anything to the contrary in this Agreement or any other Transaction Document, no Purchased Asset shall remain in the custody of Seller or an Affiliate of Seller.

ARTICLE 9.REPRESENTATIONS AND WARRANTIES

(a)Each of Buyer and Seller represents and warrants to the other that (i) it is duly authorized to execute and deliver this Agreement, to enter into Transactions contemplated hereunder and to perform its obligations hereunder and has taken all necessary action to authorize such execution, delivery and performance, (ii) it will engage in such Transactions as principal (or, if agreed in writing, in the form of an annex hereto or otherwise, in advance of any Transaction by the other party hereto, as agent for a disclosed principal), (iii) the person signing this Agreement on its behalf is duly authorized to do so on its behalf (or on behalf of any such disclosed principal), (iv) it has obtained all authorizations of any Governmental Authority required in connection with this Agreement and the Transactions hereunder and such authorizations are in full force and effect and (v) the execution, delivery and performance of this Agreement and the Transactions hereunder will not violate any Requirement of Law applicable to it or its organizational documents or any agreement by which it is bound or by which any of its assets are affected. On the Purchase Date for any Transaction for the purchase of any Purchased Assets by Buyer from Seller, and at all times while this Agreement and any Transaction hereunder is in effect, Buyer and Seller shall each be deemed to repeat all the foregoing representations made by it.

(b)In addition to the representations and warranties in Article 9(a) above, Seller represents and warrants to Buyer as of the date of this Agreement, and will be deemed to represent and warrant to Buyer as of the Purchase Date for any Transaction for the purchase of any Purchased Assets by Buyer from Seller, and at all times while this Agreement and any Transaction hereunder is in effect, unless otherwise stated herein, that:

(i)Organization. Seller is duly organized, validly existing and in good standing under the laws and regulations of the jurisdiction of Seller’s incorporation or organization, as the case may be, and is duly licensed, qualified, and in good standing in every state where such licensing or qualification is necessary for the transaction of Seller’s business, except where failure to so qualify would not be reasonably expected to have a Material Adverse Effect. Seller has the power to own and hold the assets it purports to own and hold, and to carry on its business as now being conducted and

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proposed to be conducted, and has the power to execute, deliver, and perform its obligations under this Agreement and the other Transaction Documents to which Seller is a party.

(ii)Due Execution; Enforceability. The Transaction Documents to which Seller is a party have been or will be duly executed and delivered by Seller, for good and valuable consideration. The Transaction Documents to which Seller is a party constitute the legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms subject to bankruptcy, insolvency, and other limitations on creditors’ rights generally and to equitable principles.

(iii)Ability to Perform. Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant applicable to it contained in the Transaction Documents to which it is a party.

(iv)Non-Contravention. Neither the execution and delivery by Seller of the Transaction Documents, nor consummation by Seller of the transactions contemplated by the Transaction Documents (or any of them), nor compliance by Seller with the terms, conditions and provisions of the Transaction Documents (or any of them) will (A) conflict with or result in a breach of any of the terms, conditions or provisions of the organizational documents of Seller, (B) violate or conflict with any contractual provisions of, or cause a default or event of default under, any indenture, loan agreement, mortgage or other material contract or agreement to which Seller is a party or by which Seller may be bound, to the extent such conflict or breach would have a Material Adverse Effect upon Seller’s ability to perform its obligations hereunder, (C) result in the creation or imposition of any Lien upon any of the assets of Seller, other than pursuant to the Transaction Documents, to the extent such creation or imposition would have a Material Adverse Effect upon Seller’s ability to perform its obligations hereunder, (D) conflict with any judgment or order, writ, injunction, decree or demand of any Governmental Authority applicable to Seller, or (E) conflict with any applicable Requirement of Law.

(v)Litigation; Requirements of Law. As of the Closing Date, any Purchase Date for any Transaction hereunder, any Future Funding Date, or on the first day of any Renewal Period, except as previously disclosed to Buyer in writing on or prior to such date, there is no action, suit, proceeding, investigation, or arbitration pending or, to the Knowledge of Seller, threatened in writing against Seller, Pledgor, or Guarantor, or any of their respective assets, nor is there any action, suit, proceeding, investigation, or arbitration pending or, to the Knowledge of Seller, threatened in writing against Seller, Pledgor, or Guarantor that (A) would reasonably be expected to, individually or in the aggregate, result in any Material Adverse Effect, (B) would reasonably be expected to have an adverse effect on the validity of the Transaction Documents or any action taken or to be taken in connection with the obligations of Seller under any of the Transaction Documents or (C) requires filing with the SEC in accordance with the 1934 Act or any rules thereunder. Seller is in compliance in all material respects with all Requirements of Law. Seller is not in default in any material respect with respect to any judgment, order, writ, injunction, decree, rule or regulation of any arbitrator or Governmental Authority.

(vi)No Broker. Seller has not dealt with any broker, investment banker, agent, or other Person (other than Buyer or an Affiliate of Buyer) who may be entitled to any commission or compensation in connection with the sale of Purchased Assets pursuant to any of the Transaction Documents.

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(vii)Good Title to Purchased Assets. Immediately prior to the purchase of any Purchased Assets by Buyer from Seller hereunder, such Purchased Assets are free and clear of any Lien or impediment to transfer (including any “adverse claim” as defined in Section 8-102(a)(1) of the UCC), in each case except for Liens to be released simultaneously with such purchase by Buyer, and Seller is the record and beneficial owner of, and has good and marketable title to and the right to sell and transfer to Buyer, such Purchased Assets and, upon transfer of such Purchased Assets to Buyer, Buyer shall be the equitable owner of such Purchased Assets free of any adverse claim. In the event the related Transaction is recharacterized as a secured financing of the Purchased Assets, the provisions of this Agreement are effective to create in favor of Buyer a valid security interest in all rights, title and interest of Seller in, to and under the Purchased Assets and Buyer shall have a valid, perfected first priority security interest in the Purchased Assets (and, without limitation on the foregoing, Buyer, as entitlement holder, shall have a “security entitlement” to the Purchased Assets).

(viii)No Material Adverse Effect; No Defaults. As of the Closing Date, any Purchase Date for any Transaction hereunder with respect to the subject Purchased Asset only, any Future Funding Date with respect to the subject Purchased Asset only, or on the first day of any Renewal Period, except as previously disclosed to Buyer in writing on or prior to such date, to Seller’s Knowledge, there are no post-Transaction facts or circumstances that have a Material Adverse Effect on any Purchased Asset that Seller has not notified Buyer of in writing; and no Default or Event of Default exists under or with respect to the Transaction Documents.

(ix)Authorized Representatives. The duly authorized representatives of Seller are listed on, and true signatures of such authorized representatives are set forth on, Exhibit II attached to this Agreement.

(x)Representations and Warranties Regarding Purchased Assets; Delivery of Purchased Asset File.

(A)As of the date hereof, Seller has not assigned, pledged or conveyed to any other Person, or otherwise encumbered, any Purchased Asset, and immediately prior to the sale of such Purchased Asset to Buyer hereunder, Seller was the sole owner of such Purchased Asset and had good and marketable title thereto, free and clear of all Liens, and any impediment to transfer (including any “adverse claim” as defined in Section 8-102(a)(1) of the UCC), in each case except for Liens to be released simultaneously with such sale to Buyer.

(B)The provisions of this Agreement and the related Confirmation are effective to either (1) constitute a sale of Purchased Items to Buyer or (2) in the event the related Transaction is recharacterized as a secured financing of the Purchased Assets, to create in favor of Buyer a legal, valid and enforceable security interest in all right, title and interest of Seller in, to and under the Purchased Items, and in such event, Buyer shall have a valid, perfected first priority security interest in the Purchased Items (and without limitation on the foregoing, Buyer, as entitlement holder, shall have a “security entitlement” to the Purchased Items).

(C)Upon receipt by Custodian of each Mortgage Note endorsed in blank by a duly authorized officer of Seller, either a purchase shall have been completed by Buyer of such Mortgage Note or Buyer shall have a valid and fully perfected first priority security interest in all right, title and interest of Seller in the Purchased Items described therein.

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(D)Each of the representations and warranties made in respect of the Purchased Assets pursuant to Exhibit V are true, complete and correct, except to the extent disclosed in a Requested Exceptions Report.

(E)Upon the filing of financing statements on Form UCC-1 naming Buyer as “Secured Party”, Seller as “Debtor” and describing the Purchased Items, in the jurisdiction and recording office listed on Exhibit X attached hereto, the security interests granted hereunder in that portion of the Purchased Items which can be perfected by filing under the UCC will constitute fully perfected security interests under the UCC in all right, title and interest of Seller in, to and under such Purchased Items.

(F)Upon execution and delivery of the Depository Agreement, Buyer shall have a valid and fully perfected first priority security interest in the Depository Account and all amounts at any time on deposit therein.

(G)Upon execution and delivery of the Depository Agreement, Buyer shall have a valid and fully perfected first priority security interest in the “investment property” and all “deposit accounts” (each as defined in the UCC) comprising Purchased Items or any after-acquired property related to such Purchased Items.

(H)With respect to each Purchased Asset purchased by Seller or an Affiliate of Seller from a Transferor, (a) such Purchased Asset was acquired and transferred pursuant to a Purchase Agreement, (b) such Transferor received reasonably equivalent value in consideration for the transfer of such Purchased Asset, (c) no such transfer was made for or on account of an antecedent debt owed by such Transferor to Seller or an Affiliate of Seller, (d) no such transfer is or may be voidable or subject to avoidance under the Bankruptcy Code, and (e) the representations and warranties made by such Transferor to Seller or such Affiliate of Seller in such Purchase Agreement are hereby incorporated herein mutatis mutandis and are hereby remade by Seller to Buyer on each date as of which they speak in such Purchase Agreement. Seller or such Affiliate of Seller has been granted a security interest in each such Purchased Asset, filed one or more UCC financing statements against such Transferor to perfect such security interest, and assigned such financing statements in blank and delivered such assignments to Buyer or Custodian.

(I)Seller has complied with all material requirements of the Custodial Agreement with respect to each Purchased Asset, including delivery to Custodian of all required Purchased Asset Documents. Except to the extent disclosed in a Requested Exceptions Report, Seller or its designee is in possession of a complete, true and accurate Purchased Asset File with respect to each Purchased Asset, except for such documents the originals of which have been delivered to Custodian.

(J)The Purchased Assets constitute the following, as applicable, as defined in the UCC: a general intangible, instrument, investment property, security, deposit account, financial asset, uncertificated security, securities account, or security entitlement. Seller has not authorized the filing of, and does not have Knowledge of, any UCC financing statements filed against Seller as

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debtor that include the Purchased Assets, other than any financing statement that has been terminated or filed pursuant to this Agreement.

(xi)Adequate Capitalization; No Fraudulent Transfer; Solvency. Seller has, as of each Purchase Date, adequate capital for the normal obligations foreseeable in a business of its size and character and in light of its contemplated business operations. Neither the Transaction Documents nor any Transaction thereunder are entered into by Seller in contemplation of insolvency or with the intent to hinder, delay or defraud any of Seller’s creditors. The transfer by Seller of the Purchased Assets pursuant hereto and the obligation of Seller to repurchase such Purchased Assets is not undertaken by Seller with the intent to hinder, delay or defraud any of Seller’s creditors. As of the Purchase Date, Seller is not insolvent within the meaning of Section 101(32) of the Bankruptcy Code or any successor provision thereof, is generally able to pay, and as of the date hereof is paying, its debts as they become due, and the transfer and sale by Seller of the Purchased Assets pursuant hereto and the obligation of Seller to repurchase such Purchased Assets (A) will not cause the liabilities of Seller to exceed the assets of Seller, (B) will not result in Seller having unreasonably small capital, and (C) will not result in debts that would be beyond Seller’s ability to pay as the same mature. Seller received reasonably equivalent value in exchange for the transfer and sale by Seller of the Purchased Assets and the Purchased Items pursuant hereto. No petition in bankruptcy has been filed against Seller, Pledgor, or Guarantor in the last ten (10) years, and Seller has not in the last ten (10) years made an assignment on behalf of creditors or taken advantage of any debtor’s relief laws. Seller has only entered into agreements on terms that would be considered arm’s length and otherwise on terms consistent with other similar agreements with other similarly situated entities.

(xii)Governmental Approvals.    No order, consent, approval, license, authorization or validation of, or filing, recording or registration by Seller with, or exemption by, any Governmental Authority is required to authorize, or is required in connection with, (A) the execution, delivery and performance by Seller of any Transaction Document to which Seller is or will be a party, (B)the legality, validity, binding effect or enforceability of any such Transaction Document against Seller or (C) the consummation of the transactions contemplated by this Agreement (other than consents, approvals and filings that have been obtained or made as applicable, and the filing of certain financing statements in respect of certain security interests).

(xiii)Organizational Documents. Seller has delivered to Buyer certified copies of its organizational documents, together with all amendments thereto, if any.

(xiv)No Encumbrances. There are (i) no outstanding rights, options, warrants or agreements on the part of Seller for a purchase, sale or issuance, in connection with the Purchased Assets, (ii) no agreements on the part of Seller to issue, sell or distribute the Purchased Assets, and (iii) no obligations on the part of Seller (contingent or otherwise) to purchase, redeem or otherwise acquire any securities or interest therein, except as contemplated by the Transaction Documents.

(xv)Federal Regulations. None of Seller, Pledgor or Guarantor is required to register as an “investment company,” or a company “controlled by an investment company,” within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”).

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(xvi)Taxes. Seller, Pledgor, and Guarantor have timely filed all required federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by them and have paid all Taxes (whether or not shown on a return), which have become due, except for Taxes that are being contested in good faith by appropriate proceedings diligently conducted and for which appropriate reserves have been established in accordance with GAAP. Seller and each Affiliate of Seller have satisfied all of their withholding tax obligations. No tax Liens have been filed against any assets of Seller, Guarantor or Pledgor and no claims are currently being asserted in writing against Seller, Guarantor or Pledgor with respect to Taxes (except for liens and with respect to Taxes not yet due and payable or liens or claims with respect to Taxes that are being contested in good faith and for which adequate reserves have been established in accordance with GAAP).

(xvii)Judgments/Bankruptcy. Except as disclosed in writing to Buyer, there are no judgments against Seller unsatisfied of record or docketed in any court located in the United States of America that would reasonably be expected to have a Material Adverse Effect and no Act of Insolvency has ever occurred with respect to Seller.

(xviii)Use of Proceeds; Margin Regulations. All proceeds of each Transaction shall be used by Seller for purposes permitted under Seller’s governing documents, provided that no part of the proceeds of any Transaction will be used by Seller to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. Neither the entering into of any Transaction nor the use of any proceeds thereof will violate, or be inconsistent with, any provision of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

(xix)Full and Accurate Disclosure. No information contained in the Transaction Documents, or any written statement furnished by or on behalf of Seller pursuant to the terms of the Transaction Documents, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under or context in which they were made.

(xx)Financial Information. All financial data concerning Seller and the Purchased Assets that has been delivered by or on behalf of Seller to Buyer is true, complete and correct in all material respects. All financial data concerning Seller and Guarantor has been prepared fairly in accordance with GAAP. As of the Closing Date and as of the first day of the Renewal Period, since the delivery of such data, except as otherwise disclosed in writing to Buyer, there has been no change in the financial position of Seller or the Purchased Assets, or in the results of operations of Seller, which change is reasonably likely to have a Material Adverse Effect on Seller.

(xxi)Servicing Agreements. Seller has delivered to Buyer copies of all Servicing Agreements pertaining to the Purchased Assets and to the Knowledge of Seller, as of the date of this Agreement and as of the Purchase Date for the purchase of any Purchased Assets subject to a Servicing Agreement, each such Servicing Agreement is in full force and effect in accordance with its terms and no default or event of default exists thereunder.

(xxii)No Reliance. Seller has made its own independent decisions to enter into the Transaction Documents and each Transaction and as to whether such Transaction 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. Seller is not relying upon any advice from Buyer as to any aspect of the

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Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.

(xxiii)Patriot Act.

(a)Seller is in compliance with the (A) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other applicable enabling legislation or executive order relating thereto, (B) the USA Patriot Act, and (C) the United States Foreign Corrupt Practices Act of 1977, as amended, and any other applicable anti-bribery laws and regulations. No part of the proceeds of any Transaction will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

(b)Seller agrees that, from time to time upon the prior written request of Buyer, it shall (A) execute and deliver such further documents, provide such additional information and reports and perform such other acts as Buyer may reasonably request in order to insure compliance with the provisions hereof (including, without limitation, compliance with the USA Patriot Act and to fully effectuate the purposes of this Agreement) and (B) provide such opinions of counsel concerning matters relating to this Agreement as Buyer may reasonably request; provided, however, that nothing in this Section 9(b) shall be construed as requiring Buyer to conduct any inquiry or decreasing Seller’s responsibility for its statements, representations, warranties or covenants hereunder. In order to enable Buyer and its Affiliates to comply with any anti-money laundering program and related responsibilities including, but not limited to, any obligations under the USA Patriot Act and regulations thereunder, Seller on behalf of itself and its Affiliates makes the foregoing representations and covenants to Buyer and its Affiliates, that neither Seller, nor, any of its Affiliates, is a Prohibited Investor and Seller is not acting on behalf of or for the benefit of any Prohibited Investor. Seller agrees to promptly notify Buyer or a person appointed by Buyer to administer their anti-money laundering program, if applicable, of any change in information affecting this representation.

(xxiv)Seller neither owns nor leases any properties.

(xxv)Insider. Seller is not an “executive officer,” “director,” or “person who directly or indirectly or acting through or in concert with one or more persons owns, controls, or has the power to vote more than 10% of any class of voting securities” (as those terms are defined in 12 U.S.C. § 375(b) or in regulations promulgated pursuant thereto) of Buyer, of a bank holding company of which Buyer is a Subsidiary, or of any Subsidiary, of a bank holding company of which Buyer is a Subsidiary, of any bank at which Buyer maintains a correspondent account or of any lender which maintains a correspondent account with Buyer.

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(xxvi)Office of Foreign Assets Control. Seller warrants, represents and covenants that neither Seller nor any of its Affiliates are or will be an entity or Person that is or is owned or controlled by a Person that is the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Asset Control, the United Nations Security Council, the European Union or Her Majesty’s Treasury (collectively, “Sanctions”). Seller covenants and agrees that, with respect to the Transactions under this Agreement, none of Seller or, to the best of Seller’s knowledge after due inquiry, any of its Affiliates will conduct any business, nor engage in any transaction, Assets or dealings, with any Person who is the subject of Sanctions. Seller further covenants and agrees that it will not, directly or indirectly, use the proceeds of the facility, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions.

(xxvii)Notice Address; Jurisdiction of Organization. On the date of this Agreement, Seller’s address for notices is as specified on Annex I.Seller’s jurisdiction of organization is Delaware. The location where Seller keeps its books and records, including all computer tapes and records relating to the Purchased Items, is its notice address. Seller may change its address for notices and for the location of its books and records by giving Buyer written notice of such change.

(xxviii)Anti-Money Laundering Laws. Seller either (1) is entirely exempt from or (2) has otherwise fully complied with all applicable anti-money laundering laws and regulations (collectively, the “Anti-Money Laundering Laws”), by (A) establishing an adequate anti-money laundering compliance program as required by the Anti-Money Laundering Laws, (B) conducting the requisite due diligence in connection with the origination of each Purchased Asset for purposes of the Anti-Money Laundering Laws, including with respect to the legitimacy of the related obligor (if applicable) and the origin of the assets used by such obligor to purchase the property in question, and (C) maintaining sufficient information to identify the related obligor (if applicable) for purposes of the Anti-Money Laundering Laws.

(xxix)Ownership of Property. Seller does not own, and has not ever owned, any assets other than (A) the Purchased Assets, and (B) such incidental personal property related thereto; provided, however, that Seller shall not be in breach of this representation to the extent Seller acquires or originates a New Asset under its good faith belief that such New Asset would become a Purchased Asset.

(xxx)Ownership. Seller is and shall remain at all times a wholly owned direct or indirect subsidiary of Guarantor. The direct, and to the extent depicted, the indirect, ownership interests in Seller, Pledgor and Guarantor are as set forth on the organizational structure chart attached hereto as Schedule III.

(xxxi)Compliance with ERISA. (a) Neither Seller nor Guarantor has any employees as of the date of this Agreement; (b) each of Seller and Guarantor complies with an exception set forth in the Plan Asset Regulations such that such Person is not deemed to hold “plan assets” within the meaning of the Plan Asset Regulations; and (c) assuming that no portion of the Purchased Assets are funded by Buyer with “plan assets” within the meaning of the Plan Asset Regulations, none of the transactions contemplated by the Transaction Documents will constitute a nonexempt prohibited transaction (as such term is defined in Section 4975(c)(1)(A)-(D) of the Code or Section 406(a) of ERISA) that could subject Buyer to any tax or penalty imposed under Section 4975 of the Code or Section 502(i) of ERISA.

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(xxxii)Servicing Agreements. Any Servicing Agreement related to a Purchased Asset, including without limitation, the Primary Servicing Agreement, may be terminated at will by Seller without payment of any penalty or fee.

ARTICLE 10.NEGATIVE COVENANTS OF SELLER

On and as of the date hereof and each Purchase Date and until this Agreement is no longer in force with respect to any Transaction, Seller shall not without the prior written consent of Buyer:

(a)subject to Seller’s right to repurchase any Purchased Asset in accordance with the terms and provisions of this Agreement, take any action that would directly or indirectly impair or adversely affect Buyer’s title to the Purchased Assets;

(b)transfer, assign, convey, grant, bargain, sell, set over, deliver or otherwise dispose of, including, without limitation, any effective transfer or other disposition as a result of a division of Seller, or pledge or hypothecate, directly or indirectly, any interest in the Purchased Assets (or any of them) to any Person other than Buyer, or engage in repurchase transactions or similar transactions with respect to the Purchased Assets (or any of them) with any Person other than Buyer, unless and until such Purchased Asset is repurchased by Seller in accordance with this Agreement;

(c)modify in any material respect any Servicing Agreements to which it is a party;

(d)create, incur or permit to exist any Lien in or on any of its property, assets, revenue, the Purchased Assets, the other Purchased Items, whether now owned or hereafter acquired, other than the Liens granted by Seller pursuant to Article 6 of this Agreement and the Lien granted by Pledgor under the Pledge and Security Agreement or unless and until such Purchased Asset relating to such Purchased Items is repurchased by Seller in accordance with this Agreement;

(e)take any action or permit such action to be taken which would result in a Change of Control;

(f)consent or assent to, or permit the Primary Servicer or servicer to make, any Significant Modification relating to the Purchased Assets without the prior written consent of Buyer, which shall be granted or denied in Buyer’s sole but reasonable discretion;

(g)without the prior written consent of Buyer in its sole discretion, except as permitted by the Transaction Documents, either (i) permit the organizational documents of Seller to be amended or (ii) permit the organizational structure of Seller to be changed from a limited liability company to another form of ownership;

(h)acquire or maintain any right or interest in any Purchased Asset or Underlying Mortgaged Property that is senior to, junior to or pari passu with the rights and interests of Buyer therein under this Agreement and the other Transaction Documents unless such right or interest becomes a Purchased Asset hereunder or unless such right or interest exists as of the Purchase Date for such Purchased Asset and is approved by Buyer in writing;

(i)use any part of the proceeds of any Transaction hereunder for any purpose which violates, or would be inconsistent with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System;

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(j)either (i) incur any Indebtedness except as provided in Article 12(i) or (ii) otherwise cease to be a Single-Purpose Entity;

(k)amend or otherwise modify the Underwriting Guidelines or originate mortgage loans in a manner inconsistent with the Underwriting Guidelines. Notwithstanding the preceding sentence, in the event that Seller makes any amendment or modification to the Underwriting Guidelines, Seller shall immediately notify Buyer of such change and shall promptly deliver to Buyer a complete copy of the amended or modified Underwriting Guidelines;

(l)take any action, cause, allow, or permit any of Seller, Pledgor or Guarantor to be required to register as an “investment company”, or a company “controlled by an investment company”, within the meaning of the Investment Company Act, or to violate any provisions of the Investment Company Act, including Section 18 thereof or any rules promulgated thereunder;

(m)after the occurrence and during the continuance of any Default or Event of Default, make any distribution, payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity or ownership interest of Seller, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Seller; provided, however, that so long as no monetary Default or Event of Default shall have occurred and be continuing, Seller may distribute the minimum amount of cash necessary for Guarantor to maintain its status as a REIT and avoid the payment of any income or excise taxes by Guarantor, provided that such distributions are further distributed by Guarantor to maintain its status as a REIT or avoid the payment of income or excise taxes by Guarantor;

(n)make any future advances under any Purchased Asset to any underlying obligor that are not permitted by the related Purchased Asset Documents; or

(o)seek its dissolution, liquidation or winding up, in whole or in part.

ARTICLE 11.AFFIRMATIVE COVENANTS OF SELLER

On and as of the date hereof and each Purchase Date and until this Agreement is no longer in force with respect to any Transaction:

(a)Seller shall promptly notify Buyer of any material adverse change (i) in the business operations and/or financial condition of Seller, Pledgor or Guarantor or (ii) impacting any Purchased Asset, including, without limitation any adverse impact on maintaining regulatory compliance (including licensing) with respect to any such Purchased Asset; provided, however, that nothing in this Article 11 shall relieve Seller of its obligations under this Agreement.

(b)Seller shall provide Buyer with copies of such documents as Buyer may reasonably request evidencing the truthfulness of the representations set forth in Article 9.

(c)Seller shall (i) defend the right, title and interest of Buyer in and to the Purchased Items against, and take such other action as is necessary to remove, the Liens, security interests, claims and demands of all Persons (other than Liens created in favor of Buyer pursuant to the Transaction Documents), (ii) to the extent any additional limited liability company is formed by division of Seller (and without prejudice to Article 10(b)), Seller shall cause any such additional limited liability company to assign, pledge and grant to Buyer all of its assets, and shall cause any owner of such additional limited liability company to pledge all of the Capital Stock and any rights in connection therewith of such additional limited liability company, to Buyer in support of all Repurchase Obligations in the same manner and to the same extent as the assignment,

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pledge and grant by Seller of all of Seller’s assets hereunder, and in the same manner and to the same extent as the pledge by each Pledgor of all of each such Pledgor’s right, title and interest in all of the Capital Stock of the applicable Seller and any rights in connection therewith, in each case pursuant to the applicable Pledge Agreement, and (iii) at Buyer’s reasonable request, take all action necessary to ensure that Buyer will have a first priority security interest in the Purchased Assets subject to any of the Transactions in the event such Transactions are recharacterized as secured financings.

(d)Seller will permit Buyer or its designated representative to inspect Seller’s records with respect to the Purchased Items and the conduct and operation of its business related thereto upon reasonable prior written notice from Buyer or its designated representative, at such reasonable times and with reasonable frequency, and to make copies of extracts of any and all thereof, subject to the terms of any confidentiality agreement between Buyer and Seller. Buyer shall act in a commercially reasonable manner in requesting and conducting any inspection relating to the conduct and operation of Seller’s business.

(e)If Seller shall at any time become entitled to receive or shall receive any rights, whether in addition to, in substitution of, as a conversion of, or in exchange for a Purchased Asset, or otherwise in respect thereof, Seller shall accept the same as Buyer’s agent, hold the same in trust for Buyer and deliver the same forthwith to Custodian in the exact form received, duly endorsed by Seller to Buyer, if required, together with all related and necessary duly executed transfer documents to be held by Buyer hereunder as additional collateral security for the Transactions. If any sums of money or property so paid or distributed in respect of the Purchased Assets shall be received by Seller, Seller shall, until such money or property is paid or delivered to Buyer, hold such money or property in trust for Buyer, segregated from other funds of Seller, as additional collateral security for the Transactions.

(f)At any time from time to time upon the reasonable request of Buyer, at the sole expense of Seller, Seller will (i) promptly and duly execute and deliver such further instruments and documents and take such further actions as Buyer may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement including the perfected, first priority security interest required hereunder, (ii) ensure that such security interest remains fully perfected at all times and remains at all times first in priority as against all other creditors of such Seller (whether or not existing as of the Closing Date, any Purchase Date or in the future) and (iii) obtain or preserve the rights and powers herein granted (including, among other things, filing such UCC financing statements as Buyer may request). If any amount payable under or in connection with any of the Purchased Items shall be or become evidenced by any promissory note, other instrument or certificated security, such note, instrument or certificated security shall be promptly delivered to Buyer, duly endorsed in a manner satisfactory to Buyer, to be itself held as a Purchased Item pursuant to this Agreement, and the documents delivered in connection herewith.

(g)Seller shall provide, or cause to be provided, to Buyer the following financial and reporting information:

(i)Within twenty (20) calendar days after each month-end (or, if the last day of such 20-day period is not a Business Day, then by the next succeeding Business Day after the end of such 20-day period), a Monthly Reporting Package substantially in the form of Exhibit III-A attached hereto;

(ii)Within forty-five (45) calendar days after the last day of each of the first three fiscal quarters in any fiscal year, a Quarterly Reporting Package substantially in the form of Exhibit III-B attached hereto;

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(iii)Within one hundred twenty (120) calendar days after the last day of its fiscal year, an Annual Reporting Package substantially in the form of Exhibit III-C attached hereto; and

(iv)Upon Buyer’s request, such other information regarding the financial condition, operations or business of Seller, Guarantor or any Mortgagor in respect of a Purchased Asset as Buyer may reasonably request.

(h)Seller shall promptly acknowledge and respond to communications from Buyer relating to the Transaction Documents or Transactions, and, within one (1) Business Day of Buyer’s request therefor, shall make a representative available to Buyer by telephone or in person to discuss any matters relating to the Transaction Documents or Transactions that Buyer wishes to discuss with Seller.

(i)Seller shall to at all times (i) comply in all respects with all laws, ordinances, rules, regulations and orders (including, without limitation, Environmental Laws) of any Governmental Authority or any other federal, state, municipal or other public authority having jurisdiction over Seller or any of its assets and Seller shall do or cause to be done all things necessary to preserve and maintain in full force and effect its legal existence, and all licenses material to its business and (ii) maintain and preserve its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business (including, without limitation, preservation of all lending licenses held by Seller and of Seller’s status as a “qualified transferee” (however denominated) under all documents which govern the Purchased Assets).

(j)Seller shall or shall cause Guarantor to at all times keep proper books of records and accounts in which full, true and correct entries shall be made of its transactions fairly in accordance with GAAP, and set aside on its books from its earnings for each fiscal year all such proper reserves in accordance with GAAP.

(k)Seller shall observe, perform and satisfy all the terms, provisions, covenants and conditions required to be observed, performed or satisfied by it, and shall pay when due all costs, fees and expenses required to be paid by it under the Transaction Documents, including, but not limited to, the fees and expenses of Custodian and the Acceptable Attorney, Depository and each servicer (including, without limitation, the Primary Servicer) of any or all of the Purchased Assets.

(l)Seller will continue to be a U.S. Person that is a disregarded entity of a U.S. Person for U.S. federal income tax purposes. Seller shall pay and discharge all Taxes, levies, liens and other charges on its assets and on the Purchased Items that, in each case, in any manner would create any Lien upon the Purchased Items, other than (A) Taxes that are not yet due and payable and (B) any such Taxes that are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided in accordance with GAAP; provided that such contest operates to suspend collection of the contested Tax and enforcement of a Lien.

(m)Seller shall advise Buyer in writing of the opening of any new chief executive office or the closing of any such office of Seller, Pledgor or Guarantor and of any change in Seller’s, Pledgor’s or Guarantor’s name or the places where the books and records pertaining to the Purchased Assets are held not less than fifteen (15) Business Days prior to taking any such action.

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(n)Seller will maintain records with respect to the Purchased Items and the conduct and operation of its business with no less a degree of prudence than if the Purchased Items were held by Seller for its own account.

(o)Upon reasonable prior notice (unless an Event of Default shall have occurred and is continuing, in which case no prior notice shall be required), during normal business hours, Seller shall allow Buyer to (i) review any operating statements, occupancy status and other property level information with respect to the underlying real estate directly or indirectly securing or supporting the Purchased Assets that either is in Seller’s possession or is available to Seller, (ii) examine, copy (at Buyer’s expense) and make extracts from its books and records, to inspect any of its Properties, and (iii) discuss Seller’s business and affairs with its Responsible Officers.

(p)Intentionally omitted.

(q)Intentionally omitted.

(r)Seller shall continue to engage in business of the same general type as now conducted by it or otherwise as approved by Buyer prior to the date hereof and maintain and preserve its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business (including, without limitation, preservation of all lending licenses (if any) held by Seller and of Seller’s status as a “qualified transferee” (however denominated) under all documents which govern the Purchased Assets).

(s)Seller shall cause each servicer of a Purchased Asset to provide to Buyer via electronic transmission, promptly upon request by Buyer a Servicing Tape for the most recently ended month (or any portion thereof).

(t)With respect to each Eligible Asset to be purchased hereunder, Seller shall notify Buyer in writing of the creation of any right or interest in such Eligible Asset or related Underlying Mortgaged Property that is senior to or pan passu with the rights and interests that are to be transferred to Buyer under this Agreement and the other Transaction Documents, and whether any such right or interest will be held or obtained by Seller or an Affiliate of Seller.

(u)With respect to each Purchased Asset, Seller shall take all action necessary or required by the Transaction Documents, Purchased Asset Documents and each and every Requirement of Law, or reasonably requested by Buyer, to perfect, protect and evidence Buyer’s ownership of and first priority perfected security interest in such Purchased Asset and related Purchased Asset Documents, including executing or causing to be executed 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. Seller shall not take any action to cause any Purchased Asset that is not evidenced by an instrument or chattel paper (as defined in the UCC) to be so evidenced. If a Purchased Asset becomes evidenced by an instrument or chattel paper, the same shall be immediately delivered to Buyer or to Custodian on behalf of Buyer, together with endorsements required by Buyer.

(v)No later than thirty (30) calendar days after Buyer’s request (made not more than one (1) time per calendar year), Seller shall procure and deliver to Buyer an Appraisal relating to any Purchased Asset at Seller’s sole cost and expense. Notwithstanding anything herein to the contrary, Buyer shall have the unlimited right, at any time and from time to time, to obtain an Appraisal relating to any Purchased Asset at Buyer’s own cost and expense.

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(w)Seller shall provide notice to Buyer in writing of any of the following, together with a certificate of a Responsible Officer of Seller setting forth details of such occurrence and any action Seller has taken or proposes to take with respect thereto:

(i)promptly upon receipt by Seller of notice or Knowledge of the occurrence of any Default or Event of Default, but in no event later than the immediately succeeding Business Day after the earlier of obtaining notice or Knowledge of any such occurrence;

(ii)with respect to any Purchased Asset, promptly following receipt of any unscheduled Principal Payment (in full or in part);

(iii)promptly upon receipt by Seller of notice or Knowledge of the occurrence of any of the following: (A) with respect to any Purchased Asset or related Underlying Mortgaged Property, material loss or damage, regulatory issues, material licensing or permit issues, violation of any Requirement of Law, violation of any material Environmental Law or any other actual or expected event or change in circumstances that would reasonably be expected to result in a default under the related Purchased Asset Documents or material decline in value or cash flow, and (B) with respect to Seller, Pledgor and Guarantor, a violation of any Requirement of Law or other event or circumstance that would reasonably be expected to have a Material Adverse Effect;

(iv)promptly upon the establishment of a rating by any nationally recognized rating agency applicable to Guarantor and any downgrade in or withdrawal of such rating once established;

(v)promptly upon the occurrence of any event or circumstance that could
reasonably be determined to cause Guarantor to breach any of the covenants contained in Section 9 of the Guarantee Agreement;

(vi)promptly, and in any event within ten (10) days after service of process on any of the following, give Buyer notice of all litigation, action, suit, arbitration, investigation or other legal or arbitration proceedings (including, without limitation, any of the following which are pending or threatened) or other legal or arbitrable proceedings affecting Seller, Pledgor or Guarantor, any Purchased Asset (or obligor or guarantor thereunder) or affecting any of the assets of Seller before any Governmental Authority that (A) questions or challenges the validity or enforceability of any Transaction, Purchased Asset or Purchased Asset Document, (B) makes a claim or claims in an aggregate amount greater than (1) $250,000 with respect to Seller and (2) $5,000,000 with respect to Guarantor, (C) individually or in the aggregate, if adversely determined, would reasonably be likely to have a Material Adverse Effect, (D) requires filing with the SEC in accordance with the 1934 Act and any rules thereunder or (E) raises any lender licensee issues with respect to any Purchased Asset;

(vii)promptly following, and in any event within one (1) Business Day of receipt by Seller of notice or Knowledge, of: (A) any event that would result in any Purchased Asset becoming subject to a Mandatory Early Repurchase Event, (B) any unpermitted lien or security interest (other than security interests created hereby) on, or claim asserted against, any Purchased Asset or, to Seller’s Knowledge, the underlying collateral therefor, (C) any event or change in circumstances that has or would reasonably be expected to have an adverse effect on the Market Value of a Purchased Asset, or (D) the resignation or termination of any servicer under any Servicing Agreement with respect to any Purchased Asset;

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(viii)promptly upon receipt by Seller of notice or Knowledge of the occurrence of any breach of any representation contained in Article 9(b)(x), but in no event later than the immediately succeeding Business Day after the earlier of obtaining notice or Knowledge of any such occurrence; and

(ix)promptly upon any transfer of any Underlying Mortgaged Property or any direct or indirect equity interest in any Mortgagor of which Seller has Knowledge, whether or not consent to such transfer is required under the applicable Purchased Asset Documents.

(x)Seller shall comply with the USA Patriot Act and all applicable requirements of Governmental Authorities having jurisdiction over Seller and the Purchased Items, including those relating to money laundering and terrorism. Seller agrees that Buyer shall have the right to audit Seller’s compliance with the USA Patriot Act and all applicable requirements of Governmental Authorities having jurisdiction over Seller and the Purchased Items, including those relating to money laundering and terrorism. Seller agrees that, in the event Seller fails to comply with the USA Patriot Act or any such applicable requirements of Governmental Authorities, then Buyer may, at its option, cause Seller to comply therewith, and any and all reasonable costs and expenses incurred by Buyer in connection therewith shall be immediately due and payable by Seller.

(y)Seller shall provide Buyer with written notice of any amendment, modification or waiver with respect to a Purchased Asset (including such amendments, modifications or waivers that do not constitute a Significant Modification).

(z)With respect to each Mezzanine Loan for which the related Senior Mortgage Loan is not primarily serviced by Primary Servicer pursuant to a Primary Servicing Agreement that has been approved by Buyer: (a) the related Senior Mortgage Loan shall at all times be serviced pursuant to a servicing agreement in form and substance acceptable to Buyer, and (b) the servicer thereunder shall have signed and delivered a Servicer Notice in form and substance acceptable to Buyer. If any such servicing agreement with respect to any Senior Mortgage Loan is terminated, then Seller shall, prior to or simultaneously with such termination, cause a new servicer acceptable to Buyer in its sole discretion to be approved and a new servicing agreement to be entered into with respect to such Senior Mortgage Loan in form and substance acceptable to Buyer in its sole discretion.

ARTICLE 12.SINGLE PURPOSE ENTITY

Seller hereby represents and warrants to Buyer and covenants with Buyer that, since its formation, and on and as of the date of this Agreement and each Purchase Date and at all times while this Agreement and any Transaction hereunder is in effect or any Repurchase Obligations remain outstanding:

(a)it has been, is now, and intends to remain solvent, and it has paid and intends to pay its debts and liabilities (including overhead expenses) from its own assets as the same shall become due;

(b)it has complied and will comply with the provisions of its certificate of formation and its limited liability company agreement;

(c)it has done or caused to be done and will do all things necessary to observe limited liability company formalities and to preserve its existence as an entity duly organized,

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validly existing and in good standing under the applicable laws of the jurisdiction of its organization or formation;

(d)it has maintained and will maintain all of its books, records, financial statements and bank accounts separate from those of its affiliates, its members and any other Person, and it will file its own tax returns (except to the extent consolidation is required or permitted under GAAP or as a matter of law);

(e)it has been, is and will 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 of Seller), it shall correct any known misunderstanding regarding its status as a separate entity, it shall conduct business in its own name, it shall not identify itself or any of its Affiliates as a division or part of the other and it shall maintain and utilize separate stationery, invoices and checks;

(f)it has not owned and will not own any property or any other assets other than the Purchased Assets and rights ancillary thereto;

(g)it has not engaged and will not engage in any business other than the origination, acquisition, ownership, administration, financing and disposition of the Purchased Assets in accordance with the applicable provisions of the Transaction Documents or in connection with prior financings that have been paid in full on or before the date hereof;

(h)it has not entered into, and will not enter into, any contract or agreement with any of its affiliates, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s length basis with Persons other than such affiliate;

(i)it has not incurred and will not incur any indebtedness or obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) obligations under the Transaction Documents, (ii) obligations under the documents evidencing the Purchased Assets, (iii) obligations in connection with prior financings that have been paid in full on or before the date hereof, and (iv) unsecured trade payables, in an aggregate amount not to exceed $400,000 at any one time outstanding, incurred in the ordinary course of acquiring, owning, financing and disposing of the Purchased Assets; provided, however, that any such trade payables incurred by Seller shall be paid within sixty (60) days of the date incurred;

(j)it has not made and will not make any loans or advances to any other Person, and shall not acquire obligations or securities of any member or affiliate of any member or any other Person (other than in connection with the origination, acquisition, ownership or financing of Purchased Assets or in connection with prior financings that have been paid in full on or before the date hereof);

(k)it intends to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;

(l)it will not seek the dissolution, liquidation or winding up, in whole or in part of Seller;

(m)it will not commingle its funds and other assets with those of any of its Affiliates or any other Person;

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(n)it has maintained and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any of its Affiliates or any other Person;

(o)it has not held and will not hold itself out to be responsible for the debts or obligations of any other Person;

(p)it will (i) have at all times at least one (1) Independent Director and (ii) provide Buyer with up-to-date contact information for all Independent Directors and a copy of the agreement pursuant to which each Independent Director consents to and serves as an Independent Director for Seller;

(q)its organizational documents shall provide that (i) no Independent Director of Seller may be removed or replaced without Cause, (ii) Buyer be given at least five (5) Business Days prior notice of the removal and/or replacement of any Independent Director, together with the name and contact information of the replacement Independent Director and evidence of the replacement’s satisfaction of the definition of Independent Director and (iii) any Independent Director of Seller shall not have any fiduciary duty to anyone including the holders of the equity interests in Seller and any Affiliates of Seller except Seller and the creditors of Seller with respect to taking of, or otherwise voting on, any Act of Insolvency with respect to Seller; provided that the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing;

(r)it shall not, without the consent of its Independent Directors, institute any proceeding to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing of any such petition or to the appointment of a receiver, rehabilitator, conservator, liquidator, assignee, trustee or sequestrator (or other similar official) of it or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, or make an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing; and

(s)it shall not have any employees.

ARTICLE 13.EVENTS OF DEFAULT; REMEDIES

(a)Each of the following events shall constitute an “Event of Default” under this Agreement:

(i)Seller shall fail to repurchase any Purchased Asset on the applicable Repurchase Date;

(ii)(A) Buyer shall fail to receive any amounts when due in accordance with Article 5 of this Agreement (including, without limitation, accrued and unpaid Price Differential and Principal Payments), or (B) Seller shall fail to make any payments or apply any Income when due in accordance with Article 5 of this Agreement;

(iii)Seller shall fail to cure any Margin Deficit in accordance with Article 4 of this Agreement;

(iv)Seller, Pledgor or Guarantor shall fail to make any payment not otherwise addressed under this Article 13(a) owing to Buyer that has become due, whether by

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acceleration or otherwise under the terms of this Agreement or the terms of the Pledge and Security Agreement, or the Guarantee Agreement, the Fee Letter or any other Transaction Document, which failure is not remedied within three (3) Business Days of written notice thereof by Buyer to Seller;

(v)Seller shall (i) except as set forth in the following clause (ii), default in the observance or performance of its obligation in any agreement contained in Article 10 of this Agreement, or (ii) default in the observance or performance of its obligation in any agreement contained in Articles 10(d), 10(i), 10(h) or 10(k) of this Agreement and, if such default is capable of being cured, such default is not cured within ten (10) days after the earlier of obtaining notice or Knowledge of any such occurrence;

(vi)an Act of Insolvency occurs with respect to Seller, Pledgor or Guarantor;

(vii)a Change of Control shall have occurred;

(viii)an officer of Seller, Pledgor or Guarantor shall admit to any Person in writing its inability to, or its intention not to, perform any of its obligations hereunder;

(ix)the Custodial Agreement, the Depository Agreement, the Pledge and Security Agreement, the Guarantee Agreement, the Servicing Agreement, the Fee Letter or any other Transaction Document shall for whatever reason be terminated (except with Buyer’s prior written consent) or cease to be in full force and effect, or the enforceability thereof shall be contested by Seller, Pledgor or Guarantor;

(x)Seller or Guarantor shall be in default beyond all applicable notice and cure periods under (A) any Indebtedness of Seller or Guarantor, as applicable, which default (1) involves the failure to pay a matured obligation in excess of $250,000, with respect to Seller or $5,000,000, with respect to Guarantor or (2) permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness, if the aggregate amount of the Indebtedness in respect of which such default or defaults shall have occurred is at least $250,000, with respect to Seller or $5,000,000, with respect to Guarantor; or (B) any other material contract to which Seller or Guarantor is a party which default (1) involves the failure to pay a matured obligation or (2) permits the acceleration of the maturity of obligations by any other party to or beneficiary of such contract if the aggregate amount of such obligations is $250,000, with respect to Seller or $5,000,000, with respect to Guarantor;

(xi)Seller or Guarantor or any of their present or future Affiliates shall be in default under any repurchase facility, loan facility or hedging transaction entered into by Seller or Guarantor or any of their present or future Affiliates, as applicable, to Buyer or any of its present or future Affiliates, which default (A) involves the failure to pay a matured obligation, or (B) permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such repurchase facility, loan facility or hedging transaction;

(xii)(A) Seller or an ERISA Affiliate shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan that is not exempt from such Sections of ERISA and the Code, (B) any material “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the Pension Benefit Guaranty Corporation or a Plan shall arise on the assets of Seller or any ERISA Affiliate, (C) a Reportable Event (as referenced in Section 4043(b)(3) of ERISA), the reporting of which has not been waived by regulations, shall occur with respect to, or proceedings

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shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Plan, which Reportable Event (as so defined) or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of Buyer, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (D) any Plan shall terminate for purposes of Title W of ERISA, (E) Seller or any ERISA Affiliate shall, or in the reasonable opinion of Buyer is likely to, incur any liability in connection with a withdrawal from, or the insolvency or reorganization of, a Multiemployer Plan or (F) any other event or condition shall occur or exist with respect to a Plan; and in each case in clauses (A) through (F) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect;

(xiii)either (A) the Transaction Documents shall for any reason not cause, or shall cease to cause, Buyer to be the owner free of any adverse claim of any of the Purchased Assets, and such condition is not cured by Seller within five (5) Business Days after notice thereof from Buyer to Seller or after Seller otherwise has Knowledge thereof, or (B) if a Transaction is recharacterized as a secured financing, and the Transaction Documents with respect to any Transaction shall for any reason cease to create and maintain a valid first priority security interest in favor of Buyer in any of the Purchased Assets and such condition is not cured by Seller within five (5) Business Days after notice thereof from Buyer to Seller or after Seller otherwise has Knowledge thereof;

(xiv)any governmental, regulatory, or self-regulatory authority shall have taken any action to remove, limit, restrict, suspend or terminate the rights, privileges, or operations of Seller, Pledgor or Guarantor, which suspension or termination has a Material Adverse Effect in the determination of Buyer;

(xv)the breach by Pledgor of any term or condition set forth in the Pledge and Security Agreement or of any representation, warranty, certification or covenant made or deemed made in the Pledge and Security Agreement by Pledgor, and such breach is not cured within ten (10) days following written notice from Buyer to Pledgor thereof; provided that if such breach is susceptible of cure but cannot reasonably be cured within such 10-day period, and if Pledgor has diligently and expeditiously proceeded to cure such breach, then such 10-day period shall be extended for such time as is reasonably necessary for Pledgor, in the exercise of due diligence, to cure such breach, and in no event shall such cure period exceed thirty (30) days from the earlier of Pledgor’s receipt of Buyer’s notice of such breach or Pledgor’s Knowledge of such breach; provided, further, however, that if Pledgor shall have made any such representation with Knowledge that it was materially incorrect or untrue at the time made, such misrepresentation shall constitute an Event of Default;

(xvi)any representation (other than the representations and warranties of Seller set forth in Exhibit V andArticle 9(b)(x)(D)) made by Seller to Buyer shall have been incorrect or untrue in any respect when made or repeated or deemed to have been made or repeated, and such breach is not cured within ten (10) days following written notice from Buyer to Seller thereof; provided that if such breach is susceptible of cure but cannot reasonably be cured within such 10-day period, and if Seller has diligently and expeditiously proceeded to cure such breach, then such 10-day period shall be extended for such time as is reasonably necessary for Seller, in the exercise of due diligence, to cure such breach, and in no event shall such cure period exceed thirty (30) days from the earlier of Seller’s receipt of Buyer’s notice of such breach or Seller’s Knowledge of such breach; provided, further, however, that if Seller shall have made any such representation with Knowledge that it was materially incorrect or untrue at the time made, such misrepresentation shall constitute an Event of Default;

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(xvii)a final judgment by any court of competent jurisdiction for the payment of money (a) rendered against Seller in an amount greater than $250,000 or (b) rendered against Guarantor in an amount greater than $5,000,000, and remains undischarged or unpaid for a period of sixty (60) calendar days, unless such judgment is effectively stayed by fully bonding over or other means acceptable to Buyer;

(xviii)if Seller shall breach or fail to perform any of the covenants or conditions contained in this Agreement or any Transaction Document, other than those specifically otherwise referred to in this Article 13, and such breach or failure is not cured within ten (10) days following written notice from Buyer to Seller thereof; provided that if such breach or failure is non-monetary in nature and is susceptible of cure but cannot reasonably be cured within such 10-day period, and if Seller has diligently and expeditiously proceeded to cure such breach or failure, then such 10-day period shall be extended for such time as is reasonably necessary for Seller, in the exercise of due diligence, to cure such breach or failure, and in no event shall such cure period exceed sixty (60) days from the earlier of Seller’s receipt of Buyer’s notice of such breach or failure or Seller’s Knowledge of such breach or failure;

(xix)the breach, subject to applicable grace and cure periods, by Guarantor of any term, covenant (financial or otherwise) or condition set forth in the Guarantee Agreement or of any representation, warranty, certification or covenant made or deemed made in the Guarantee Agreement by Guarantor or if any certificate furnished by Guarantor to Buyer pursuant to the Guarantee Agreement or any information with respect to the Purchased Assets furnished in writing on behalf of Guarantor shall prove to have been false or misleading in any respect as of the time made or furnished;

(xx)Seller, Pledgor or Guarantor are required to register as an “investment company” (as defined in the Investment Company Act), or any of the terms of this Agreement violate any requirement of the Investment Company Act, including without limitation Section 18 thereof or any rules or regulations promulgated thereunder;

(xxi)Any servicer fails to deposit all Income or other amounts as required by the provisions of this Agreement when due, or an event of default has occurred under any servicing agreement (including the Servicing Agreement); provided that no Event of Default under this clause (xxiii) shall occur if (a) such failure to deposit all Income or any other amounts as required by the provisions of this Agreement is cured within two (2) Business Days of written notice to Seller or Seller otherwise becoming aware thereof, and (b) the related servicer is removed and replaced with a replacement servicer satisfactory to Buyer in its sole good faith discretion within sixty (60) days of such date; or

(xxii)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 Guarantor as a “going concern” or a reference of similar import.

Notwithstanding anything to the contrary contained herein, if failure to apply Income in accordance with Article 5 is solely as a result of Depository failing to remit funds on deposit in the Depository Account and sufficient funds are actually on deposit in the Depository Account, then, so long as Seller causes such funds to be remitted to Buyer within one (1) Business Day of such failure, such failure shall not be an Event of Default.

(b)After the occurrence and during the continuance of an Event of Default, Seller shall have no ability to enter into any further Transactions hereunder. If an Event of Default shall occur and be continuing with respect to Seller, the following rights and remedies shall be available to Buyer:

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(i)At the option of Buyer, exercised by written notice to Seller (which option shall be deemed to have been exercised, even if no notice is given, immediately upon the occurrence of an Act of Insolvency with respect to Seller, Pledgor or Guarantor), the Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (the date on which such option is exercised or deemed to have been exercised being referred to hereinafter as the “Accelerated Repurchase Date”).

(ii)If Buyer exercises or is deemed to have exercised the option referred to in Article 13(b)(i) of this Agreement:

(A)Seller’s obligations hereunder to repurchase all Purchased Assets shall become immediately due and payable on and as of the Accelerated Repurchase Date without presentment or demand of any kind, which are hereby expressly waived, and all Income (including, without limitation, any Principal Payments or any other amounts received, without regard to their source) deposited in the Depository Account shall be retained by Buyer and applied in accordance with Article 5(c);

(B)to the extent permitted by applicable law, the Repurchase Price with respect to each Transaction (determined as of the Accelerated Repurchase Date) shall be increased by the aggregate amount obtained by daily application of, on a 360-day-per-year basis for the actual number of days during the period from and including the Accelerated Repurchase Date to but excluding the date of payment of the Repurchase Price (as so increased), (x) the Pricing Rate for such Transaction multiplied by (y) the Purchase Price for such Transaction (decreased by (I) any amounts actually remitted to Buyer by the Depository or Seller from time to time pursuant to Article 5 of this Agreement and applied to such Repurchase Price, and (II) any amounts applied to the Repurchase Price pursuant to Article 13(b)(iii) of this Agreement); and

(C)Buyer may terminate this Agreement.

(iii)Upon the occurrence and during the continuance of an Event of Default with respect to Seller, Buyer may (A) immediately sell, at a public or private sale in a commercially reasonable manner and at such price or prices as Buyer may deem satisfactory any or all of the Purchased Assets, and/or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Assets, to give Seller credit for such Purchased Assets in an amount equal to the Market Value of such Purchased Assets against the aggregate unpaid Repurchase Price for such Purchased Assets and any other amounts owing by Seller under the Transaction Documents. The proceeds of any disposition of Purchased Assets effected pursuant to this Article 13(b)(iii) shall be applied, (v) first, to the costs and expenses incurred by Buyer in connection with Seller’s default, including without limitation, all costs of collection associated with the interpretation and enforcement of Buyer’s rights and remedies under this Agreement and all of the other Transaction Documents; (w) second, to actual, out-of-pocket damages incurred by Buyer in connection with Seller’s default, (x) third, to the Repurchase Prices; (y) fourth, to any Breakage Costs; and (z) fifth, to return any excess to Seller.

(iv)The parties recognize that it may not be possible to purchase or sell all of the Purchased Assets on a particular Business Day, or in a transaction with the same purchaser, or in the same manner because the market for such Purchased Assets may not

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be liquid. In view of the nature of the Purchased Assets, the parties agree that liquidation of a Transaction or the Purchased Assets 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, Buyer may elect, in its sole discretion, the time and manner of liquidating any Purchased Assets, and nothing contained herein shall (A) obligate Buyer to liquidate any Purchased Assets on the occurrence and during the continuance of an Event of Default or to liquidate all of the Purchased Assets in the same manner or on the same Business Day or (B) constitute a waiver of any right or remedy of Buyer.

(v)Seller shall be liable to Buyer and its Affiliates and shall indemnify Buyer and its Affiliates for the amount (including in connection with the enforcement of this Agreement) of all out-of-pocket losses, costs and expenses, including reasonable legal fees and expenses of outside counsel, actually incurred by Buyer in connection with or as a consequence of an Event of Default.

(vi)Buyer shall have, in addition to its rights and remedies under the Transaction Documents, all of the rights and remedies provided by applicable federal, state, foreign (where relevant), and local laws (including, without limitation, if the Transactions are recharacterized as secured financings, 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 Buyer and Seller. Without limiting the generality of the foregoing, Buyer shall be entitled to set off the proceeds of the liquidation of the Purchased Assets against all of Seller’s obligations to Buyer under this Agreement, without prejudice to Buyer’s right to recover any deficiency.

(vii)Buyer may exercise any or all of the remedies available to Buyer immediately upon the occurrence of an Event of Default with respect to Seller and at any time during the continuance thereof. All rights and remedies arising under the Transaction Documents, as amended from time to time, are cumulative and not exclusive of any other rights or remedies that Buyer may have.

(viii)Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and Seller hereby expressly waives any defenses Seller might otherwise have to require Buyer to enforce its rights by judicial process. Seller also waives, to the extent permitted by law, any defense Seller might otherwise have arising from the use of non-judicial process, disposition of any or all of the Purchased Assets, or from any other election of remedies. Seller recognizes that non judicial 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.

ARTICLE 14.INCREASED COSTS; TAXES

(a)Effect of Benchmark Transition Event. (i) Notwithstanding anything to the contrary herein or in any other Transaction Document:

        (A)    If a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to the Pricing Rate Determination Date for any Pricing Rate Period, the Benchmark Replacement will replace the then current Benchmark for all purposes hereunder or under any Transaction Document in respect of

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such determination and all determinations on all subsequent dates, without any amendment to, or further action or consent of any other party to, this Agreement.

        (B)    In connection with the implementation of a Benchmark Replacement, Buyer 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 Transaction Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of the Seller.

        (C)    During any Benchmark Interim Unavailability Period, the component of the Purchase Price Differential based on the then-current Benchmark shall be replaced by the Prime Rate.

(D)    Buyer will promptly notify Seller of (i) the Benchmark Replacement Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, and/or (iv) any Benchmark Interim Unavailability Period. Any determination, decision or election that may be made by Purchaser pursuant to this Section, including any determination with respect to a 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 sole discretion and without consent from the Seller.

(ii)    Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, Buyer shall have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary in this Agreement or in any other Transaction Documents, any amendments implementing such Benchmark Replacement Conforming Changes shall become effective without any further action or consent of Seller.

(iii)    Benchmark Transition Notice. Buyer shall promptly notify Seller of (i) the Benchmark Replacement Date, (ii) the implementation of any Benchmark Replacement and (iii) the effectiveness of any related Benchmark Replacement Conforming Changes in connection with the replacement of the then-current Benchmark with such Benchmark Replacement (such notice, the “Benchmark Transition Notice”). From and after the Benchmark Replacement Date related to such Benchmark Transition Notice, the specified Benchmark Replacement shall be the Benchmark for all purposes under this Agreement, each of the other Transaction Documents and every Transaction hereunder.

(b)Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for Buyer to enter into or maintain Transactions as contemplated by the Transaction Documents, (a) the commitment of Buyer hereunder to enter into new Transactions or, if such adoption of or change in Requirement of Law makes it unlawful for Buyer to continue to maintain Transactions as contemplated by this Agreement, to continue Transactions as such shall forthwith be canceled, and (b) the Transactions then outstanding shall be converted automatically, at Buyer’s election, to either Federal Funds Rate Transactions or Substitute Rate Transactions, on the last day of the then current Pricing Rate Period or within such earlier period as may be required by law. If any such conversion of a Transaction occurs on a day that is not the last day of the then current Pricing Rate Period with respect to such Transaction, Seller shall pay to Buyer such amounts, if any, as may be required pursuant to Article 14(f) of this Agreement.

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(c)Increased Costs. If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof by any Governmental Authority or compliance by Buyer with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority having jurisdiction over Buyer made subsequent to the date hereof:

(i)shall subject Buyer or any Transferee to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) under this Agreement, or its loans, loan principal, letters of credit, commitments, or other obligation, or its deposits, reserves, other liabilities or capital attributable thereto;

(ii)shall impose, modify or hold applicable any other reserves, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of Buyer that is not otherwise included in the determination of Term SOFR hereunder; or

(iii)shall impose on Buyer any other condition (other than Taxes);

and the result of any of the foregoing is to increase the cost to Buyer, by an amount that Buyer deems, in the exercise of its reasonable business judgment, to be material, of entering into, continuing or maintaining Transactions or to reduce any amount receivable under the Transaction Documents in respect thereof; then, in any such case, Seller shall promptly pay Buyer, within ten (10) Business Days of Buyer’s demand therefor, any additional amounts necessary to compensate Buyer for such increased cost or reduced amount receivable; provided, however, that any such determination by Buyer and imposition of such increased costs shall not be applied to Seller unless and until such determination by Buyer and imposition of such increased costs are applied by Buyer to other similarly situated sellers under similar repurchase facilities with Buyer; provided, further, that Seller shall not be required to compensate Buyer pursuant to this Article 14(c) for any increased cost or reduced amount receivable suffered more than 180 days prior to the date that Buyer notifies Seller of the change in Requirement of Law or other event giving rise to such increased cost or reduced amount receivable and of Buyer’s intention to claim compensation therefor. Such notification as to the calculation of any additional amounts payable pursuant to this subsection shall be submitted by Buyer to Seller and shall be prima facie evidence of such additional amounts. This covenant shall survive the termination of this Agreement and the repurchase by Seller of any or all of the Purchased Assets.

(d)Capital Adequacy. If Buyer shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by Buyer or any corporation controlling Buyer with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof does or shall have the effect of reducing the rate of return on Buyer’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by Buyer, to be material, then from time to time, after submission by Buyer to Seller of a written request therefor (provided, however, that any such determination by Buyer and imposition of such increased costs shall not be applied to Seller unless and until such determination by Buyer and imposition of such increased costs are applied by Buyer to other similarly situated sellers under similar repurchase facilities with Buyer), Seller shall pay to Buyer such additional amount or amounts as will compensate Buyer for such reduction. Such notification as to the calculation of any additional amounts payable pursuant to this subsection shall be submitted by Buyer to Seller and

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shall be prima facie evidence of such additional amounts. This covenant shall survive the termination of this Agreement and the repurchase by Seller of any or all of the Purchased Assets.

(e)Dodd-Frank; Basel III. Notwithstanding any provision herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all rules, regulations, guidelines or directives promulgated in connection therewith or in implementation thereof, and (ii) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or by United States or foreign regulatory authorities pursuant to Basel III, in each case are deemed to be an adoption of or change in a Requirement of Law made subsequent to the date of this Agreement, regardless of the date enacted, adopted or issued.

(f)Breakage Costs. If Seller repurchases Purchased Assets on a day other than the last day of a Pricing Rate Period, Seller shall indemnify Buyer and hold Buyer harmless from any actual out-of-pocket losses, costs and/or expenses which Buyer sustains as a direct consequence thereof (“Breakage Costs”), in each case for the remainder of the applicable Pricing Rate Period. Buyer shall deliver to Seller a statement setting forth the amount and basis of determination of any Breakage Costs in reasonable detail, it being agreed that such statement and the method of its calculation shall be conclusive and binding upon Seller absent manifest error. This Article 14(f) shall survive termination of this Agreement and the repurchase of all Purchased Assets subject to Transactions hereunder.

(g)Payments Free of Taxes. Any and all payments by or on account of any obligation of Seller under this Agreement or any Transaction Document shall be made without deduction or withholding for any Taxes, except as required by applicable law (including FATCA). If any applicable law (as determined in the good faith discretion of Seller) requires the deduction or withholding of any Tax from any such payment by Seller, then Seller shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by Seller shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Article 14) the applicable Buyer or Transferee receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(h)Payment of Other Taxes by Seller. Without duplication of Article 14(g), Seller shall timely pay, without duplication, (i) any Other Taxes imposed on such Seller to the relevant Governmental Authority in accordance with applicable law, and (ii) any Other Taxes imposed on Buyer or Transferee upon written notice from such Person setting forth in reasonable detail the calculation of such Other Taxes.

(i)Evidence of Payments. As soon as practicable after any payment of Taxes by Seller to a Governmental Authority pursuant to this Article 14, Seller shall deliver to Buyer or Transferee the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Buyer or Transferee.

(j)Indemnification by Seller. Without duplication of any other obligation under this Article 14, Seller shall indemnify Buyer and each Transferee, within ten (10) calendar days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Article 14) payable or paid by Buyer or such Transferee or required to be withheld or deducted from a payment to Buyer or such Transferee and any reasonable out-of-pocket expenses arising therefrom or with respect

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thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Seller by Buyer or such Transferee shall be conclusive absent manifest error.

(k)Status of Buyer and Assignees. Any Buyer or Assignee that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall deliver to Seller, at the time or times reasonably requested by Seller, such properly completed and executed documentation reasonably requested by Seller as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, Buyer or Assignee, if reasonably requested by Seller, shall deliver such other documentation prescribed by applicable law or reasonably requested by Seller as will enable Seller to determine whether or not Buyer or Assignee is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Articles 14(k)(A), 14(k)(B) and 14(k)(D) below) shall not be required if in Buyer’s or Assignee’s reasonable judgment such completion, execution or submission would subject Buyer or such Assignee to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of Buyer or such Assignee.

Without limiting the generality of the foregoing:

(A)Buyer or any Transferee that is a U.S. Person shall deliver to Seller on or prior to the date on which Buyer or such Assignee acquires an interest under any Transaction Document (and from time to time thereafter upon the reasonable request of Seller), executed copies of IRS Form W 9 certifying that Buyer or Assignee is exempt from U.S. federal backup withholding tax;

(B)any Foreign Buyer or foreign Transferee shall, to the extent it is legally entitled to do so, deliver to Seller (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Buyer or foreign Transferee acquires an interest under this Agreement (and from time to time thereafter upon the reasonable request of Seller), whichever of the following is applicable:

(1)in the case of a Foreign Buyer or foreign Transferee claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under this Agreement, executed copies of IRS Form W 8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under this Agreement, IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2)executed copies of IRS Form W-8ECI;

(3)in the case of a Foreign Buyer or foreign Transferee claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit VIII to the effect that such Foreign Buyer or foreign Transferee is not a

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“bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of Seller within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E; or

(4)to the extent a Foreign Buyer or foreign Transferee is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit VIII -Bor Exhibit VIII-C, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Buyer or foreign Transferee is a partnership and one or more direct or indirect partners of such Foreign Buyer or foreign Transferee are claiming the portfolio interest exemption, such Foreign Buyer or foreign Transferee may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit VIII-D on behalf of each such direct and indirect partner;

(C)any Foreign Buyer or foreign Transferee shall, to the extent it is legally entitled to do so, deliver to Seller (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Buyer or foreign Transferee acquires an interest under this Agreement (and from time to time thereafter upon the reasonable request of Seller), executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit Seller to determine the withholding or deduction required to be made; and

(D)if a payment made to Buyer or Transferee under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if Buyer or Transferee 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 Buyer or Transferee shall deliver to Seller at the time or times prescribed by law and at such time or times reasonably requested by Seller such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Seller as may be necessary for Seller to comply with its obligations under FATCA and to determine that Buyer or Transferee has complied with Buyer’s or Transferee’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

Buyer and each Assignee 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, provide such successor form or promptly notify Seller in writing of its legal inability to do so.

(l)Treatment of Certain Refunds. 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 Article 14 (including by the payment of additional amounts pursuant to this Article 14), it shall pay to the indemnifying party an amount equal to such

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refund (but only to the extent of indemnity payments made under this Article 14 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 Article 14(1) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Article 14(1), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Article 14(1) the payment of which would place the indemnified party in a less favorable net after Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(m)Assignment of Certain Rights. If any Buyer or Assignee requests compensation under this Article 14 or, if Seller is required to pay any Indemnified Taxes or additional amounts to any Buyer or any Assignee or any Governmental Authority for the account of any Buyer or Assignee pursuant to Article 14(d), or if any Buyer or Assignee defaults in its obligations under this Agreement, then Seller may, at its sole expense and effort, upon notice to such Buyer or Assignee, require such Buyer or Assignee to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Article 18), all its interests, rights (other than its existing rights to payments pursuant to Article 3(f)(iii) or Article 14(c)) and obligations under this Agreement and the related Transaction Documents to an assignee that shall assume such obligations (which assignee may be another Buyer, if a Buyer accepts such assignment); provided that (i) such Buyer or Assignee shall have received payment of an amount equal to the Repurchase Price for all Transactions, Price Differential accreted with respect thereto, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding Repurchase Price principal and accreted Price Differential and fees) or Seller (in the case of all other amounts) and (ii) in the case of any such assignment resulting from a claim for compensation under Article 14(c) or payments required to be made pursuant to Article 3(f)(iii), such assignment will result in a reduction in such compensation or payments. A Buyer or Assignee shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Buyer or Assignee or otherwise, the circumstances entitling Seller to require such assignment and delegation cease to apply.

(n)Survival of Obligations. Each party’s obligations under this Article 14 shall survive any assignment of rights by, or the replacement of, Buyer or Assignee, the termination of the Agreement and the repayment, satisfaction or discharge of all obligations under this Agreement.

ARTICLE 15.SINGLE AGREEMENT

Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of, and in reliance upon, the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing to them in respect of any other Transactions hereunder and

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(iii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted.

ARTICLE 16.RECORDING OF COMMUNICATIONS

EACH OF BUYER AND SELLER SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION) FROM TIME TO TIME TO MAKE OR CAUSE TO BE MADE TAPE RECORDINGS OF COMMUNICATIONS BETWEEN ITS EMPLOYEES, IF ANY, AND THOSE OF THE OTHER PARTY WITH RESPECT TO TRANSACTIONS. EACH OF BUYER AND SELLER HEREBY CONSENTS TO THE ADMISSIBILITY OF SUCH TAPE RECORDINGS IN ANY COURT, ARBITRATION, OR OTHER PROCEEDINGS, AND AGREES THAT A DULY AUTHENTICATED TRANSCRIPT OF SUCH A TAPE RECORDING SHALL BE DEEMED TO BE A WRITING CONCLUSIVELY EVIDENCING THE PARTIES’ AGREEMENT.

ARTICLE 17.NOTICES AND OTHER COMMUNICATIONS

Unless otherwise provided in this Agreement, all notices, consents, approvals and requests required or permitted hereunder shall be given in writing and shall be effective for all purposes if hand delivered or sent by (a) hand delivery, with proof of delivery, (b) certified or registered United States mail, postage prepaid, (c) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of delivery or (d) by telecopier (with answerback acknowledged) provided that such telecopied notice must also be delivered by one of the means set forth above, or (e) by e-mail with confirmation of delivery, to the address specified in Annex I attached hereto or at such other address and person as shall be designated from time to time by any party hereto, as the case may be, in a write notice to the other parties hereto in the manner provided for inthis Article 17. A notice shall be deemed to have been given: (v) in the case of hand delivery, at the time of delivery, (w) in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day, (x) in the case of expedited prepaid delivery upon the first attempted delivery on a Business Day, (y) in the case of telecopier, upon receipt of answerback confirmation, provided that such telecopied notice was also delivered as required in this Article 17, or (z) in the case of e-mail, upon confirmation of delivery. A party receiving a notice that does not comply with the technical requirements for notice under this Article 17 may elect to waive in writing any deficiencies and treat the notice as having been properly given.

ARTICLE 18.ENTIRE AGREEMENT; SEVERABILITY

This Agreement shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. 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.

ARTICLE 19.NON ASSIGNABILITY

(a)Seller may not assign any of its rights or obligations under this Agreement without the prior written consent of Buyer and any attempt by Seller to assign any of its rights or obligations under this Agreement without the prior written consent of Buyer shall be null and void ab initio.

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(b)Buyer may, without consent of Seller, sell to one or more banks, financial institutions or other entities (“Participants”) participating interests in any Transaction, its interest in the Purchased Assets, or any other interest of Buyer under this Agreement. Buyer may, at any time and from time to time, assign to any Person (an “Assignee” and together with Participants, each a “Transferee” and collectively, the “Transferees”) all or any part of its rights or interests in the Purchased Assets, or any other interest of Buyer under this Agreement; provided that, so long as no Event of Default has occurred and is continuing, and whether an assignment or a participation, (x) any such Transferee or Participant is not a Prohibited Transferee, (y) Seller shall continue to deal solely and directly with Buyer in connection with Buyer’s rights and obligations under the Transaction Documents, and (z) Buyer shall retain sole decision making authority under the Transaction Documents. Seller agrees to cooperate with Buyer, at Buyer’s cost, in connection with any such assignment, transfer or sale of participating interest and to enter into such restatements of, and amendments, supplements and other modifications to, this Agreement and all other Transaction Documents in order to give effect to such assignment, transfer or sale.

(c)Buyer, acting solely for this purpose as an agent of Seller, shall maintain, either at its offices at the address set forth on Annex I attached hereto or electronically, a copy of each assignment and a register for the recordation of the names and addresses of the Assignees, and ownership rights in the Transactions, Purchased Assets or in any other interests under this Agreement of any Assignee pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and Seller, Buyer and the Assignees shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as the beneficial owner of the interests in the Transactions, Purchased Assets or in any other interests under this Agreement for all purposes of this Agreement. The Register shall be available for inspection by Seller, Buyer and any Assignee, at any reasonable time and from time to time upon reasonable prior notice during normal banking business hours. No assignment shall be effective unless recorded in the Register. The parties intend that the Transactions and the Purchased Assets shall at all times be treated as being in “registered form” within the meaning of Section 163(f), Section 871(h)(2) and Section 881(c)(2) of the Code and any related Treasury regulations (or any other relevant or successor provisions of the Code or of such Treasury regulations), and the Register and Participant Register shall be maintained in accordance with such intention.

(d)If Buyer sells a participation it shall, acting solely for this purpose as an agent of Seller, maintain a register on which it enters the name and address of each Participant and the ownership rights in the Transactions, Purchased Assets or any other interests under this Agreement of each Participant (the “Participant Register”); provided that Buyer shall have no obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s ownership rights in the Transactions, Purchased Assets or any other interests under this Agreement) to any Person except to the extent (i) disclosing the portion of the Participant Register relating to a Participant with respect to which a claim for additional amounts is made under Articles 14(b), 14(c), 14(d) or 14(f),or (ii) otherwise to the extent such disclosure is reasonably expected to be necessary to establish that such ownership rights in the Transactions or any other interests under this Agreement are in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and Buyer shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, no sale, assignment, transfer or participation pursuant to this Article 19 shall be effective unless and until reflected in the Register or Participant Register, as applicable.

(e)Nothing in this Agreement shall prevent or prohibit any Buyer from pledging any of its Purchased Assets hereunder to a Federal Reserve Bank in support of borrowings made by

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such Buyer from such Federal Reserve Bank; provided, however, no such pledge shall release a Buyer from any of its obligations hereunder or substitute any such pledgee for such Buyer as a party hereto.

ARTICLE 20.GOVERNING LAW

THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AGREEMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.

ARTICLE 21.NO WAIVERS, ETC.

No express or implied waiver of any Event of Default by either party shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any provision of this Agreement and no consent by any party to a departure here from shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation of any of the foregoing, the failure to give a notice pursuant to Articles 4(a) or 4(b) hereof will not constitute a waiver of any right to do so at a later date.

ARTICLE 22.
USE OF EMPLOYEE PLAN ASSETS

(a)If “plan assets” within meaning of the Plan Asset Regulations are intended to be used by either party hereto (the “Plan Party”) in a Transaction, the Plan Party shall so notify the other party prior to the Transaction. The Plan Party shall represent in writing to the other party that the Transaction does not constitute a non-exempt prohibited transaction under Section 406(a) of ERISA or Section 4975(c)(1)(A)-(D) of the Code, and the other party may proceed in reliance thereon but shall not be required so to proceed.

(b)Subject to the last sentence of subparagraph (a) of this Article 22, any such Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most recent available audited statement of its financial condition and its most recent subsequent unaudited statement of its financial condition.

(c)By entering into a Transaction, pursuant to this Article 22, Seller shall be deemed (i) to represent to Buyer that since the date of Seller’s latest such financial statements, there has been no material adverse change in Seller’s financial condition that Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its financial condition as they are issued, so long as it is Seller in any outstanding Transaction involving a Plan Party.

ARTICLE 23.INTENT

(a)The parties intend and recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101(47) of the Bankruptcy Code (except insofar as the type of Assets subject to such Transaction or the term of such Transaction would render such

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definition inapplicable), and a “securities contract” as that term is defined in Section 741 of the Bankruptcy Code (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). The parties hereto intend (i) for each Transaction to qualify for the “safe harbor” treatment provided by the Bankruptcy Code and for Buyer to be entitled to all of the rights, benefits and protections afforded to Persons under the Bankruptcy Code with respect to a “repurchase agreement” as defined in Section 101(47) of the Bankruptcy Code and a “securities contract” as defined in Section 741(7) of the Bankruptcy Code and that payments under this Agreement are deemed “margin payments” or “settlement payments,” as defined in Section 101 of the Bankruptcy Code, (ii) for the grant of a security interest set forth in Article 6 to also be a “securities contract” as defined in Section 741(7)(A)(xi) of the Bankruptcy Code and a “repurchase agreement” as that term is defined in Section 101(47)(A)(v) of the Bankruptcy Code, and (iii) that Buyer (for so long as each party is either a “financial institution,” “financial participant,” “repo participant,” “master netting participant” or other entity listed in Sections 546, 555, 559, 561, 362(b)(6) or 362(b)(7) of the Bankruptcy Code) shall be entitled to the “safe harbor” benefits and protections afforded under the Bankruptcy Code with respect to a “repurchase agreement” and a “securities contract,” and a “master netting agreement” including (x) the rights, set forth in Article 13 and in Section 555, 559 and 561 of the Bankruptcy Code, to liquidate the Purchased Assets and terminate this Agreement, and (y) the right to offset or net out as set forth in Article 13 and in Sections 362(b)(6), 362(b)(7), 362(o) and 546 of the Bankruptcy Code.

(b)It is understood that either party’s right to accelerate or terminate this Agreement or to liquidate Assets delivered to it in connection with the Transactions hereunder or to exercise any other remedies pursuant to Article 13 hereof is a contractual right to accelerate or terminate this Agreement or to liquidate Assets as described in Sections 555 and 559 of the Bankruptcy Code. It is further understood and agreed that either party’s right to cause the termination, liquidation or acceleration of, or to offset net termination values, payment amounts or other transfer obligations arising under or in connection with this Agreement or the Transactions hereunder is a contractual right to cause the termination, liquidation or acceleration of, or to offset net termination values, payment amounts or other transfer obligations arising under or in connection with this Agreement as described in Section 561 of the Bankruptcy Code.

(c)The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”),then each Transaction hereunder is a “qualified financial contract,” as that term is defined in the FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).

(d)Each party hereto further agrees that it shall not challenge the characterization of this Agreement or any Transaction as a “repurchase agreement,” “securities contract,” and/or “master netting agreement,” or each party as a “repo participant” within the meaning of the Bankruptcy Code except in so far as the type of Purchased Assets subject to the Transactions or, in the case of a “repurchase agreement,” the term of the Transactions, would render such definition inapplicable.

(e)It is understood that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “coveredcontractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).

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(f)It is understood that this Agreement constitutes a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code, and as used in Section 561 of the Bankruptcy Code.

(g)Each party to this Agreement acknowledges that it is its intent for purposes of U.S. federal, state and local income and franchise taxes (a) to treat each Transaction as indebtedness of Seller that is secured by the Purchased Assets and (b) that the Purchased Assets are owned by Seller in the absence of an Event of Default by Seller. All parties to this Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless required by law.

(h)The parties agree that the Servicing Rights and other servicing provisions of this Agreement constitute (a) “related terms” under this Agreement within the meaning of Section 101(47)(A)(i) of the Bankruptcy Code and/or (b) a security agreement or other arrangement or other credit enhancement related to the Transaction Documents.

ARTICLE 24.DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

The parties acknowledge that they have been advised that:

(a)in the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the 1934 Act, the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other party with respect to any Transaction hereunder;

(b)in the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder;

(c)in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable; and

(d)In the case of Transactions in which one of the parties is an “insured depository institution”, as that term is defined in Section 1813(c)(2) of Title 12 of the United States Code, funds held by the financial institution pursuant to a Transaction are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation, the Savings Association Insurance Fund or the Bank Insurance Fund, as applicable.

ARTICLE 25.CONSENT TO JURISDICTION; WAIVERS

(a)PURSUANT TO, AND IN ACCORDANCE WITH, SECTION 5-1402 OF THE NEW YORK STATE GENERAL OBLIGATIONS LAW, EACH PARTY IRREVOCABLY AND UNCONDITIONALLY (I) SUBMITS TO THE NON EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN MANHATTAN, AND ANY APPELLATE COURT FROM ANY SUCH COURT, SOLELY FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING BROUGHT TO ENFORCE ITS OBLIGATIONS UNDER THIS AGREEMENT OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY

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TRANSACTION UNDER THIS AGREEMENT AND (H) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AND ANY RIGHT OF JURISDICTION ON ACCOUNT OF ITS PLACE OF RESIDENCE OR DOMICILE.

(b)TO THE EXTENT THAT EITHER PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY (SOVEREIGN OR OTHERWISE) FROM ANY LEGAL ACTION, SUIT OR PROCEEDING, FROM JURISDICTION OF ANY COURT OR FROM SET OFF OR ANY LEGAL PROCESS (WHETHER SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF JUDGMENT, EXECUTION OF JUDGMENT OR OTHERWISE) WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, SUCH PARTY HEREBY IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM SUCH IMMUNITY IN RESPECT OF ANY ACTION BROUGHT TO ENFORCE ITS OBLIGATIONS UNDER THIS AGREEMENT OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY TRANSACTION UNDER THIS AGREEMENT.

(c)THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT EACH MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING AND IRREVOCABLY CONSENT TO THE SERVICE OF ANY SUMMONS AND COMPLAINT AND ANY OTHER PROCESS BY THE MAILING OF COPIES OF SUCH PROCESS TO THEM AT THEIR RESPECTIVE ADDRESS SPECIFIED HEREIN. THE PARTIES HEREBY AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS ARTICLE 25 SHALL AFFECT THE RIGHT OF EITHER PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF SUCH PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST THE OTHER PARTY OR ITS PROPERTY IN THE COURTS OF OTHER JURISDICTIONS.

(d)SELLER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.

ARTICLE 26.NO RELIANCE

Each of Buyer and Seller hereby acknowledges, represents and warrants to the other that, in connection with the negotiation of, the entering into, and the performance under, the Transaction Documents and each Transaction thereunder:

(a)It is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the other party to the Transaction Documents, other than the representations expressly set forth in the Transaction Documents;

(b)It has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent that it has deemed necessary, and it has made its own investment, hedging and trading decisions (including decisions regarding the suitability of any

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Transaction) based upon its own judgment and upon any advice from such advisors as it has deemed necessary and not upon any view expressed by the other party;

(c)It is a sophisticated and informed Person that has a full understanding of all the terms, conditions and risks (economic and otherwise) of the Transaction Documents and each Transaction thereunder and is capable of assuming and willing to assume (financially and otherwise) those risks;

(d)It is entering into the Transaction Documents and each Transaction thereunder for the purposes of managing its borrowings or investments or hedging its assets or liabilities and not for purposes of speculation; and

(e)It is not acting as a fiduciary or financial, investment or commodity trading advisor for the other party and has not given the other party (directly or indirectly through any other Person) any assurance, guarantee or representation whatsoever as to the merits (either legal, regulatory, tax, business, investment, financial accounting or otherwise) of the Transaction Documents or any Transaction thereunder.

ARTICLE 27.INDEMNITY

Seller hereby agrees to indemnify Buyer, Buyer’s Affiliates, and each of its officers, directors, and employees (collectively, “Indemnified Parties”) from and against any and all actual out-of-pocket liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses (including, without limitation, reasonable attorneys’ fees and disbursements of outside counsel) or disbursements (all of the foregoing, collectively “Indemnified Amounts”) that may at any time (including, without limitation, such time as this Agreement shall no longer be in effect and the Transactions shall have been repaid in full) be imposed on, incurred and paid by or asserted against any Indemnified Party in any way whatsoever arising out of, or in connection with, or relating to the Transaction Documents including this Agreement or any Transactions hereunder or any action taken or omitted to be taken by any Indemnified Party under or in connection with any of the foregoing; provided, that Seller shall not be liable for liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of Buyer or any Indemnified Party. Without limiting the generality of the foregoing, Seller agrees to hold Buyer harmless from and indemnify Buyer against all Indemnified Amounts with respect to all Purchased Assets relating to, or arising out of, any violation or alleged violation of any Environmental Law, rule or regulation or any consumer credit laws, including, without limitation, ERISA, the Truth in Lending Act and/or the Real Estate Settlement Procedures Act; provided, that Seller shall not be liable for liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of Buyer or any Indemnified Party. In any suit, proceeding or action brought by Buyer in connection with any Purchased Asset for any sum owing thereunder, or to enforce any provisions of any Purchased Asset, Seller will save, indemnify and hold Buyer harmless from and against all actual out-of-pocket expense (including, without limitation, reasonable attorneys’ fees and disbursements of outside counsel), loss or damage suffered by reason of any defense, set off, counterclaim, recoupment or reduction or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by Seller 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 Seller. Seller also agrees to reimburse Buyer as and when billed by Buyer for all Buyer’s reasonable out-of-pocket costs and expenses incurred in connection with Buyer’s due diligence reviews with respect to the Purchased Assets (including, without limitation, those incurred pursuant to Article 28 and Article 3 (including, without limitation, all Pre-Purchase Legal Expenses, even if the underlying

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prospective Transaction for which they were incurred does not take place for any reason)) and the enforcement or the preservation of Buyer’s rights under this Agreement, any Transaction Documents or Transaction contemplated hereby, including, without limitation, the reasonable fees and disbursements of its outside counsel. Seller hereby acknowledges that the obligation of Seller hereunder is a recourse obligation of Seller and this Article 27 shall survive the termination of this Agreement and the Transactions contemplated hereby. For the avoidance of doubt, this Article 27 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

ARTICLE 28.DUE DILIGENCE

Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the Purchased Assets, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and Seller agrees that upon reasonable prior notice to Seller, Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Purchased Asset Files, Servicing Records and any and all documents, records, agreements, instruments or information relating to such Purchased Assets in the possession or under the control of Seller, Primary Servicer and any other servicer or sub-servicer and/or Custodian. Seller agrees to reimburse Buyer for any and all reasonable out of pocket costs and expenses incurred by Buyer with respect to continuing due diligence on the Purchased Assets, which shall be paid by Seller to Buyer within thirty (30) calendar days after receipt of an invoice therefor. Seller also shall make available to Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Purchased Asset Files and the Purchased Assets. Without limiting the generality of the foregoing, Seller acknowledges that Buyer may enter into Transactions with Seller based solely upon the information provided by Seller to Buyer and the representations, warranties and covenants contained herein, and that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Purchased Assets. Buyer may underwrite such Purchased Assets itself or engage a third party underwriter to perform such underwriting. Seller agrees to cooperate with Buyer and any third party underwriter in connection with such underwriting, including, but not limited to, providing Buyer and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Purchased Assets in the possession, or under the control, of Seller. Upon a written demand therefor by Buyer to Seller, Seller further agrees that Seller shall promptly (but in no event later than ten (10) Business Days after such a demand) reimburse Buyer for any and all reasonable attorneys’ fees, costs and expenses of outside counsel reasonably incurred by Buyer in connection with continuing due diligence on Eligible Assets and Purchased Assets.

ARTICLE 29.SERVICING

(a)Each servicer of any Purchased Asset (including the Primary Servicer) shall service the Assets for the benefit of Buyer and Buyer’s successors and assigns. The appointment of each servicer of any Purchased Asset (including the Primary Servicer) shall be subject to the prior written approval of Buyer. Seller shall cause each such servicer (including the Primary Servicer) to service the Purchased Assets at Seller’s sole cost and for the benefit of Buyer in accordance with Accepted Servicing Practices; provided that, without prior written consent of Buyer in its sole discretion as required by Article 7(d) no servicer (including the Primary Servicer) of any of the Purchased Assets shall take any action with respect to any Purchased Asset described in Article 7(d) other than pursuant to a Revocable Option.

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(b)Seller agrees that Buyer is the owner of all servicing records, including, but not limited to, any and all servicing agreements (including, without limitation, the Primary Servicing Agreement or any other servicing agreement relating to the servicing of any or all of the Purchased Assets) (collectively, the “Servicing Agreements”), files, documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, valuations, other closing documentation, payment history records, and any other records relating to or evidencing the servicing of Purchased Assets (the “Servicing Records”), so long as the Purchased Assets are subject to this Agreement. Seller covenants to safeguard such Servicing Records and to deliver them promptly to Buyer or its designee at Buyer’s request.

(c)Upon the occurrence and during the continuance of an Event of Default, Buyer may, in its sole discretion, (i) sell its right to the Purchased Assets on a servicing released basis and/or (ii) terminate Seller (as the servicer), Primary Servicer or any other servicer or sub-servicer of the Purchased Assets with or without cause, in each case without payment of any termination fee.

(d)Seller shall not employ sub-servicers or any other servicer other than Primary Servicer pursuant to the Primary Servicing Agreement to service the Purchased Assets without the prior written approval of Buyer, in Buyer’s sole discretion. If the Purchased Assets are serviced by such a Buyer approved sub-servicer or any other servicer, Seller shall, irrevocably assign all rights, title and interest (if any) in the servicing agreements in the Purchased Assets to Buyer. Seller shall cause all servicers and sub-servicers engaged by Seller to execute a direct agreement with Buyer acknowledging Buyer’s security interest and agreeing that each servicer and/or sub-servicer shall transfer all Income with respect to the Purchased Assets in accordance with the applicable Servicing Agreement and so long as any Purchased Asset is owned by Buyer hereunder, following notice from Buyer to Seller and each such servicer of an Event of Default under this Agreement, each such servicer (including Primary Servicer) or sub-servicer shall take no action with regard to such Purchased Asset other than as specifically directed by Buyer.

(e)The payment of servicing fees shall be the responsibility of Seller and shall be subordinate to payment of amounts outstanding and due to Buyer under any Transaction and this Agreement, other than in respect of servicing fees related to any Purchased Asset for which Buyer has exercised its remedies under Article 13(b) if Buyer elects not to terminate the Servicing Agreement, in which case Buyer shall assume those obligations of the owner/client under the Servicing Agreement which first occur or arise after the date Buyer exercises its remedies under Article 13(b).

(f)For the avoidance of doubt, Seller retains no economic rights to the servicing, other than Seller’s rights under the Primary Servicing Agreement or any other servicing agreement related to the Purchased Assets. As such, Seller expressly acknowledges that the Purchased Assets are sold to Buyer on a “servicing released” basis with such servicing retained by the Servicer.

ARTICLE 30.MISCELLANEOUS

(a)All rights, remedies and powers of Buyer hereunder and in connection herewith are irrevocable and cumulative, and not alternative or exclusive, and shall be in addition to all other rights, remedies and powers of Buyer whether under law, equity or agreement. In addition to the rights and remedies granted to it in this Agreement, to the extent this Agreement is determined to create a security interest, Buyer shall have all rights and remedies of a secured party under the UCC.

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(b)The Transaction Documents may be executed in counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument.

(c)The headings in the Transaction Documents are for convenience of reference only and shall not affect the interpretation or construction of the Transaction Documents.

(d)Without limiting the rights and remedies of Buyer under the Transaction Documents, Seller shall pay on demand Buyer’s reasonable actual out-of-pocket costs and expenses, including reasonable fees and expenses of accountants, attorneys and advisors, incurred in connection with the preparation, negotiation, execution, consummation and administration of, and any amendment, supplement or modification to, the Transaction Documents and the Transactions thereunder (except as expressly set forth herein), whether or not such Transaction Document (or amendment thereto) or Transaction is ultimately consummated. Seller agrees to pay Buyer promptly on demand (but in no event later than ten (10) Business Days after such a demand) all costs and expenses (including, without limitation, reasonable expenses for legal services of every kind) of any subsequent enforcement of any of the provisions hereof, or of the performance by Buyer of any obligations of Seller in respect of the Purchased Assets, or any actual or attempted sale, or any exchange, enforcement, collection, compromise or settlement in respect of any of the Purchased Items and for the custody, care or preservation of the Purchased Items (including insurance costs) and defending or asserting rights and claims of Buyer in respect thereof, by litigation or otherwise. In addition, Seller agrees to pay Buyer on demand all reasonable costs and expenses (including, without limitation, reasonable expenses for legal services of every kind) incurred in connection with the maintenance of the Depository Account and registering the Purchased Items in the name of Buyer or its nominee All such expenses shall be recourse obligations of Seller to Buyer under this Agreement and shall survive the termination of this Agreement.

(e)In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of such rights, Seller hereby grants to Buyer and its Affiliates a right of offset, to secure repayment of all amounts owing to Buyer or its Affiliates by Seller under the Transaction Documents, upon any and all monies, securities, collateral or other property of Seller and the proceeds therefrom, now or hereafter held or received by Buyer or its Affiliates or any entity under the control of Buyer or its Affiliates and its respective successors and assigns (including, without limitation, branches and agencies of Buyer, wherever located), for the account of Seller, whether for safekeeping, custody, pledge, transmission, collection, or otherwise, and also upon any and all deposits (general or specified) and credits of Seller at any time existing. Buyer and its Affiliates are hereby authorized at any time and from time to time upon the occurrence and during the continuance of an Event of Default, without notice to Seller, any such notice being expressly waived, to offset, appropriate, apply and enforce such right of offset against any and all items herein above referred to against any amounts owing to Buyer or its Affiliates by Seller under the Transaction, irrespective of whether Buyer or its Affiliates shall have made any demand hereunder and although such amounts, or any of them, shall be contingent or unmatured and regardless of any other collateral securing such amounts. Seller shall be deemed directly indebted to Buyer and its Affiliates in the full amount of all amounts owing to Buyer and its Affiliates by Seller under the Transaction Documents, and Buyer and its Affiliates shall be entitled to exercise the rights of offset provided for above. ANY AND ALL RIGHTS TO REQUIRE BUYER OR ITS AFFILIATES TO EXERCISE THEIR RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL OR PURCHASED ITEMS THAT SECURE THE AMOUNTS OWING TO BUYER OR ITS AFFILIATES BY SELLER UNDER THE TRANSACTION DOCUMENTS PRIOR TO EXERCISING THEIR RIGHT OF OFFSET WITH RESPECT TO SUCH MONIES, SECURITIES, COLLATERAL, DEPOSITS, CREDITS OR OTHER PROPERTY OF SELLER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY SELLER.

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(f)Each party agrees that it shall not assert any claims against the other for special, indirect, consequential or punitive damages for the actual use or purported use of proceeds hereunder.

(g)Each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or be invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

(h)This Agreement contains a final and complete integration of all prior expressions by the parties with respect to the subject matter hereof and thereof and shall constitute the entire agreement among the parties with respect to such subject matter, superseding all prior oral or written understandings.

(i)The parties understand that this Agreement is a legally binding agreement that may affect such party’s rights. Each party represents to the other that it has received legal advice from counsel of its choice regarding the meaning and legal significance of this Agreement and that it is satisfied with its legal counsel and the advice received from it.

(j)Should any provision of this Agreement require judicial interpretation, it is agreed that a court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against any Person by reason of the rule of construction that a document is to be construed more strictly against the Person who itself or through its agent prepared the same, it being agreed that all parties have participated in the preparation of this Agreement.

(k)Wherever pursuant to this Agreement, Buyer exercises any right given to it to consent or not consent, or to approve or disapprove, or any arrangement or term is to be satisfactory to, Buyer in its sole discretion, Buyer shall decide to consent or not consent, or to approve or disapprove or to decide that arrangements or terms are satisfactory or not satisfactory, in its sole discretion and such decision by Buyer shall be final and conclusive.

ARTICLE 31.POST CLOSING REQUIREMENTS

Seller hereby agrees, at Seller’s sole cost and expense, to satisfy the following post closing requirements set forth below (collectively, the “Post Closing Requirements”) within the applicable time periods set forth below, as such time periods may be extended by Buyer in its reasonable discretion:

(a)     Within thirty (30) days of the date hereof, Seller shall enter into an Account Control Agreement with Account Bank and establish a Repo Collection Account, in form and substance reasonably acceptable to Buyer and deliver a fully executed version of the Account Control Agreement to Buyer.

(b)     Upon execution of the Account Control Agreement, Seller shall deliver or cause to be delivered, to Buyer an executed legal opinion of outside counsel, in form and substance substantially similar to those opinion letters delivered at closing.

[REMAINDER OF PAGE LEFT BLANK]

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N WITNESS WHEREOF, the parties have executed this Agreement as a deed as of the day first written above.

BUYER:
GOLDMAN SACHS BANK USA, a New York state-chartered bank
By:	/s/ Prachi Bansal
	Name:	Prachi Gansal
	Title:	Authorized Person

Signature Page to Uncommitted Master Repurchase and Securities Contract Agreement

SELLER:
TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company
By:	Gregory Pinkus
	Name:	Gregory Pinkus
	Title:	Chief Financial Officer, Treasurer and Secretary

Signature Page to Uncommitted Master Repurchase and Securities Contract Agreement

ANNEXES, EXHIBITS AND SCHEDULES

ANNEX I	Names and Addresses for Communications between Parties
SCHEDULE I	Prohibited Transferees
SCHEDULE II	Purchased Asset File
SCHEDULE III	Organizational Structure Chart
EXHIBIT I	Form of Confirmation Statement
EXHIBIT II	Authorized Representatives of Seller
EXHIBIT III-A	Monthly Reporting Package
EXHIBIT III-B	Quarterly Reporting Package
EXHIBIT III-C	Annual Reporting Package
EXHIBIT W	Form of Power of Attorney
EXHIBIT V	Representations and Warranties Regarding Individual Purchased Assets
EXHIBIT VI	Advance Procedures
EXHIBIT VII	Form of Margin Deficit Notice
EXHIBIT VIII	Form of Tax Compliance Certificates
EXHIBIT IX	Form of Covenant Compliance Certificate
EXHIBIT X	UCC Filing Jurisdictions
EXHIBIT XI	Form of Servicer Notice
EXHIBIT XII	Form of Release Letter
EXHIBIT XIII	Reserved
EXHIBIT XIV	Form of Custodial Delivery Certificate
EXHIBIT XV	Form of Bailee Letter
EXHIBIT XVI	Underwriting Guidelines
EXHIBIT XVII	Future Funding Advance Procedures

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ANNEX INAMES AND ADDRESSES FOR COMMUNICATIONS BETWEEN PARTIES

Buyer
		GOLDMAN SACHS BANK USA 200 West Street New York, New York 10282 Attention: Mr. Jeffrey Dawkins Telephone: (212) 902-6852 Telecopy: (212) 977-4870 Email: jeffrey.dawkins@gs.com
		Email: gs-refgwarehouse@ny.email.gs.com Email: gs-crewarehouse-am@ny.email.gs.com Email: gs-warehouse-ops@ny.email.gs.com
	With copies to:
		GOLDMAN SACHS BANK USA 2001 Ross Avenue, Suite 2800 Dallas, Texas 75201 Attention: Joe Osborne and Robert Ivey Telephone: (972) 501-3977 Email: joe.osborne@gs.com Email: Robert.ivey@gs.com
	and
		DECHERT LLP Cira Centre 2929 Arch Street Philadelphia, PA 19104 Attention: Kenneth Hackman, Esq. Telephone: (215) 994-2638 Facsimile: (215) 655-2638 Email: kenneth.hackman@dechert.com
Seller:

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	TERRA MORTGAGE CAPITAL I, LLC Terra Mortgage Capital I, LLC 550 Fifth Avenue, Sixth Floor New York, New York 10036 Attn: Michael Muscat Telephone: (212) 753-5100 Ext 268 Email: mikem@mavikcapital.com
With copies to:
	TERRA MORTGAGE CAPITAL I, LLC 550 Fifth Avenue, Sixth Floor New York, New York 10036 Attn: Vik Uppal Telephone: (212) 753-5100 Ext 250 Email: vik@mavikcapital.com
and:
	TERRA MORTGAGE CAPITAL I, LLC 550 Fifth Avenue, Sixth Floor New York, New York 10036 Attn: Greg Pinkus Telephone: (212) 753-5100 Ext 275 Email:greg@mavikcapital.com assetmanagement@mavikcapital.com don@mavikcapital.com

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Schedule I

Prohibited Transferees

1.Fortress

2.Stabilis

3.Lone Star

4.Mack

5.Blackstone

6.Oaktree

7.Rialto

8.KKR

9.Starwood

10.Apollo

11.iStar

12.Square Mile

13.Vornado

14.Cerberus

15.Colony

16.Angelo Gordon

17.Brookfield

18.SL Green

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Schedule II

With respect to each Purchased Asset, the following documents, as applicable:

(A)The original Mortgage Note bearing all intervening endorsements, endorsed “Pay to the order of without recourse” and signed in the name of the last endorsee (the “Last Endorsee”) by an authorized Person of the Last Endorsee (in the event that the Purchased Asset was acquired by the Last Endorsee in a merger, the signature must be in the following form: “[Last Endorsee], successor by merger to [name of predecessor]”; in the event that the Purchased Asset was acquired or originated by the Last Endorsee while doing business under another name, the signature must be in the following form: “[Last Endorsee], [formerly known] or [doing business] as [previous name]”) or a lost note affidavit in a form reasonably approved by Buyer, with a copy of the applicable Mortgage Note attached thereto.

(B)The original or a copy of the loan agreement and the guarantee, if any, executed in connection with the Purchased Asset.

(C)The original Mortgage with evidence of recording thereon, or a copy thereof together with an officer’s certificate of Seller or certification of the named bailee certifying that such copy represents a true and correct copy of the original and that such original has been submitted for recordation in the appropriate governmental recording office of the jurisdiction where the Underlying Mortgaged Property is located.

(D)The originals of all assumption, modification, consolidation or extension agreements with evidence of recording thereon, or copies thereof together with an officer’s certificate of Seller or certification of the named bailee certifying that such copies represent true and correct copies of the originals and, if applicable, that such originals have each been submitted for recordation in the appropriate governmental recording office of the jurisdiction where the Underlying Mortgaged Property is located.

(E)The original Assignment of Mortgage in blank for each Purchased Asset, in form and substance acceptable for recording and signed in the name of the Last Endorsee (in the event that the Purchased Asset was acquired by the Last Endorsee in a merger, the signature must be in the following form: “[Last Endorsee], successor by merger to [name of predecessor]”; in the event that the Purchased Asset was acquired or originated while doing business under another name, the signature must be in the following form: “[Last Endorsee], [formerly known] or [doing business] as [previous name]”).

(F)The originals of all intervening assignments of mortgage (if any) with evidence of recording thereon, or copies thereof together with an officer’s certificate of Seller or certification of the named bailee certifying that such copies represent true and correct copies of the originals and that such originals have each been submitted for recordation in the appropriate governmental recording office of the jurisdiction where the Underlying Mortgaged Property is located.

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(G)The original or a copy of the title policy or, if the original title policy has not been issued, the original or a copy of the irrevocable marked commitment to issue the same or pro-forma title policy.

(H)The original or a copy of any security agreement, chattel mortgage or equivalent document executed in connection with the Purchased Asset.

(I)The original Assignment of Leases, if any, with evidence of recording thereon, or a copy thereof together with an officer’s certificate of Seller or certification of the named bailee certifying that such copy represents a true and correct copy of the original that has been submitted for recordation in the appropriate governmental recording office of the jurisdiction where the Underlying Mortgaged Property is located.

(J)The originals of all intervening assignments of Assignment of Leases and rents, if any, or copies thereof, with evidence of recording thereon, or copies thereof together with an officer’s certificate of Seller or certification of the named bailee certifying that such copies represent true and correct copies of the originals and that such originals have each been submitted for recordation in the appropriate governmental recording office of the jurisdiction where the Underlying Mortgaged Property is located.

(K)A copy of the UCC financing statements, certified as true and correct by Seller, and all necessary UCC continuation statements with evidence of filing thereon or copies thereof together with evidence that such UCC financing or continuation statements have been sent for filing, and UCC assignments in blank, which UCC assignments shall be in form and substance acceptable for filing in the applicable jurisdictions.

(L)The original or a copy of any environmental indemnity agreement or similar guaranty or indemnity, whether stand-alone or incorporated into the applicable loan documents (if any).

(M)Mortgagor’s certificate or title affidavit (if any).

(N)A survey of the Underlying Mortgaged Property (if any) as accepted by the title company for issuance of the title policy.

(O)A copy of all servicing agreements and Servicing Records related to such Purchased Asset, which Seller shall deliver to Servicer (with a copy to Buyer).

(P)A copy of the Mortgagor’s opinions of counsel.

(Q)An assignment of any management agreements, permits, contracts and other material agreements (if any).

(R)If reasonably requested by Buyer, reports of UCC, tax lien, judgment and litigation searches, conducted by search firms reasonably acceptable to Buyer with respect to the Purchased Asset, Seller and the related underlying obligor and such reports reasonably satisfactory to Buyer.

(S)Copies of all documents relating to the formation and organization of the related obligor under such Purchased Asset, together with all consents and resolutions delivered in connection with such obligor’s obtaining such Purchased Asset.

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(T)The original omnibus assignment in blank or such other documents necessary and sufficient to transfer to Buyer all of Seller’s right, title and interest in and to the Purchased Asset.

(U)The original or a copy of any participation agreement and an original or copy of any intercreditor, co-lender agreement, and/or servicing agreement executed in connection with the Purchased Asset.

(V)Copies of all other material documents and instruments evidencing, guaranteeing, insuring, securing or modifying such Purchased Asset, executed and delivered to Seller in connection with, or otherwise relating to, such Purchased Asset, including all documents establishing or implementing any lockbox pursuant to which Seller is entitled to receive any payments from cash flow of the underlying real property.

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Schedule III

ORGANIZATIONAL STRUCTURE CHART

[ATTACHED]

Exhibit I

CONFIRMATION STATEMENT
GOLDMAN SACHS BANK USA

Ladies and Gentlemen:

Seller is pleased to deliver our written CONFIRMATION of our agreement to enter into the Transaction pursuant to which GOLDMAN SACHS BANK USA, a New York state-chartered bank, shall purchase from us the Purchased Assets identified on the attached Schedule 1 pursuant to the Uncommitted Master Repurchase and Securities Contract Agreement, dated as of February 18, 2022 (the “Master Repurchase and Securities Contract Agreement”), between GOLDMAN SACHS BANK USA, a New York state-chartered bank (“Buyer”) and TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company (“Seller”), on the following terms. Capitalized terms used herein without definition have the meanings given in the Master Repurchase and Securities Contract Agreement.

Purchase Date:	, 20
Purchased Assets:	[Name]: As identified on attached Schedule 1
Principal Amount of Purchased Asset as of Purchase Date:	[$ ]
Available Future Funding as of Purchase Date:
Fully-funded Principal Amount of Purchased Asset:
Repurchase Date:
Advance Rate:
Purchase Price:	[$ ]
Change in Purchase Price	[$ ]
Pricing Rate:	Term SOFR plus %
Governing Agreements:	As identified on attached Schedule 1
Requested Fund Date:
As-Is Value of Underlying
Mortgaged Property:
Buyer’s LTV:
Maximum Buyer’s LTV:

Purchase Price Debt Yield			Underwritten Net Operating Income	Purchase Price Debt Yield
	Year 1
	Year 2
	Year 3
	Year 4
	Year 5
Draw Fee:
Requested Wire Amount (net of Draw Fee):
Type of Funding:	[Table/Non-table]
Wiring Instructions:	See Schedule 2
Name and address for communications:	Buyer:	GOLDMAN SACHS BANK USA 200 West Street New York, New York 10282 Attention:    Mr. Jeffrey Dawkins Telephone:    (212) 902-6852 Email:    jeffrey.dawkins@gs.com Email: gs-refgwarehouse@ny.email.gs.com Email: gs-crewarehouse-am@ny.email.gs.com Email: gs-warehouse-ops@ny.email.gs.com With copies to: GOLDMAN SACHS BANK USA 2001 Ross Avenue, Suite 2800 Dallas, Texas 75201 Attention: Joe Osborne and Robert Ivey Telephone: (972) 501-3977 Email: joe.osborne@gs.com Email: Robert.ivey@gs.com Dechert LLP Cire Centre 2929 Arch Street Philadelphia, PA 19104 Attention:    Kenneth Hackman, Esq. Telephone:    (215) 994-2638 Facsimile:    (215) 655-2638 Email:    kenneth.hackman@dechert.com

1

Seller:	TERRA MORTGAGE CAPITAL I, LLC 550 Fifth Avenue, Sixth Floor New York, New York 10036 Attn: Michael Muscat Telephone: (212) 753-5100 ext 268 Email: mikem@mavikcapital.com
With copies to	TERRA MORTGAGE CAPITAL I, LLC 550 Fifth Avenue, Sixth Floor New York, New York 10036 Attn: Vik Uppal Telephone: (212) 753-5100 ext 250 Email: vik@mavikcapital.com TERRA MORTGAGE CAPITAL I, LLC 550 Fifth Avenue, Sixth Floor New York, New York 10036 Attn: Greg Pinkus Telephone: (212) 753-5100 ext 275 Email:greg@mavikcapital.com assetmanagement@mavikcapital.com don@mavikcapital.com

2

TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company

By:     
Name:
Title:

3

AGREED AND ACKNOWLEDGED:

GOLDMAN SACHS BANK USA,
a New York state-chartered bank

By:
Name:
Title:

4

Schedule 1 to Confirmation Statement

Purchased Asset:	[Asset Type] dated as of [] in the original principal amount of $[    ], made by [] to [] under and pursuant to that certain [loan agreement]/[applicable document] (the “Governing Agreement”).
Aggregate Principal Amount:	$ [] [(plus up to $[] of future advances under Section [] of the Governing Agreement). Buyer’s obligation to fund any future advances is contingent on (a) Seller’s satisfaction of the conditions captained in Article 3(1) of the Uncommitted Master Repurchase and Securities Contract Agreement and (b) a bringdown by Seller of all representations and warranties made on the date hereof with regard to the Purchased Asset pursuant to Article 9 of the Uncommitted Master Repurchase and Securities Contract Agreement.]
Representations	Seller acknowledges and agrees that upon funding by Buyer of the Purchase Price for the Purchased Asset [and, in connection with any subsequent funding of the Advance Rate of a future advance under the Purchased Asset, (i)] Seller shall be deemed to have confirmed that all of the representations and warranties set forth in Article 9 of the Uncommitted Master Repurchase and Securities Contract Agreement are true and correct as of the Purchase Date with respect to all Purchased Assets [or the applicable funding date, as the case may be,], except such representations and warranties which by their terms speak as of a specified date and except as set forth in the Requested Exception Report attached as Schedule 3 hereto or in the Requested Exception Report delivered with respect to any other Purchased Asset [and (ii) with respect to the funding of a Future Funding Advance, Seller shall be deemed to have represented and warranted that all of the conditions to funding of such advance set forth in Section r 1 of the Governing Agreement have been satisfied (and no conditions have been waived, except as has been previously disclosed by Seller to Buyer in writing)].

Fixed/Floating	Floating
Coupon	[]%
Term of Loan Including Extension Options	[], []
Amortization (e.g., IO, full amortization etc.):	[] year amortization[, with []-month IO.]

Schedule 2 to Confirmation Statement

Wiring Instructions

[to be attached]

Schedule 3 to Confirmation Statement

Requested Exceptions Report

[to be attached]

EXHIBIT II

AUTHORIZED REPRESENTATIVES OF SELLER

Name Specimen Signature

EXHIBIT III-A

MONTHLY REPORTING PACKAGE

The Monthly Reporting Package shall include, inter alia, the following:

•A listing of all Purchased Assets reflecting (i) the payment status of each Purchased Asset and any material changes in the financial or other condition of each Purchased Asset, including, without limitation any new or ongoing litigation; and (ii) any representation and/or warranty breaches under the Purchased Asset Documents.

•Any and all financial statements, rent rolls, leasing status reports for the immediately preceding twelve (12) month period, copies of any newly executed leases, any other financial reports or certificates, or other material information received from the borrowers related to each Purchased Asset.

•A listing of any existing Defaults.

•A remittance report containing servicing information, including, without limitation, the beginning and ending balances of the Purchased Assets for such period (listing the dates and amounts of any activity impacting the outstanding principal balances of the Purchased Assets), the amount of each periodic payment received and the date of receipt on a loan by loan basis and in the aggregate, with respect to the Purchased Assets serviced by any servicer (such remittance report, a “Servicing Tape”), or to the extent any servicer does not provide any such Servicing Tape, a remittance report containing the servicing information that would otherwise be set forth in the Servicing Tape or in the Servicer’s standard format.

•All other information as Buyer, from time to time, may reasonably request with respect to Seller or any Purchased Asset, obligor or Underlying Mortgaged Property.

EXHIBIT III-B

QUARTERLY REPORTING PACKAGE

The Quarterly Reporting Package shall include, inter alia, the following:

•Consolidated unaudited financial statements of Guarantor presented fairly in accordance with GAAP or, if such financial statements being delivered have been filed with the SEC pursuant to the requirements of the 1934 Act, or similar state securities laws, presented in accordance with applicable statutory and/or regulatory requirements and delivered to Buyer within the same time frame as are required to be filed in accordance with such applicable statutory or regulatory requirements, in either case accompanied by a Covenant Compliance Certificate, including a statement of operations and a statement of changes in cash flows for such quarter and statement of net assets as of the end of such quarter, and certified as being true and correct by a Covenant Compliance Certificate.

•Quarterly asset management reports.

•A business plan update, monthly and year-to-date operating statements, rent rolls, comparison of budget and actual income and expenses, ARGUS (or similar) cash flow projections model, and a leasing status report for the Purchased Assets, to the extent available.

EXHIBIT III-C

EXHIBIT III-C

ANNUAL REPORTING PACKAGE

The Annual Reporting Package shall include, inter alia, the following:

•Guarantor’s consolidated audited financial statements, prepared by a nationally recognized independent certified public accounting firm and presented fairly in accordance with GAAP or, if such financial statements being delivered have been filed with the SEC pursuant to the requirements of the 1934 Act, or similar state securities laws, presented in accordance with applicable statutory and/or regulatory requirements and delivered to Buyer within the same time frame as are required to be filed in accordance with such applicable statutory and/or regulatory requirements, in either case accompanied by a Covenant Compliance Certificate, including a statement of operations and a statement of changes in cash flows for such year and statement of net assets as of the end of such year accompanied by an unqualified report of the nationally recognized independent certified public accounting firm that prepared them.

EXHIBIT IV

FORM OF POWER OF ATTORNEY

Know All Men by These Presents, that TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company (“Seller”), does hereby appoint GOLDMAN SACHS BANK USA, a New York state-chartered bank (“Buyer”),its attorney in fact to act in Seller’s name, place and stead in any way that Seller could do with respect to (i) the completion of any endorsements of documents or instruments relating to the Purchased Assets, including, without limitation, any transfer documents related thereto and any written notices to underlying obligors to effectuate a legal transfer of the Purchased Assets, (ii) the recordation of any instruments relating to such Purchased Assets, (iii) the preparation and filing, in form and substance satisfactory to Buyer, of such financing statements, continuation statements, and other uniform commercial code forms, as Buyer may from time to time, reasonably consider necessary to create, perfect, and preserve Buyer’s security interest in the Purchased Assets, and (iv) the enforcement of Seller’s rights under the Purchased Assets purchased by Buyer pursuant to the Uncommitted Master Repurchase and Securities Contract Agreement, dated as of February 18, 2022 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Master Repurchase and Securities Contract Agreement”), between Buyer and Seller, and to take such other steps as may be necessary or desirable to enforce Buyer’s rights against such Purchased Assets, the related Purchased Asset Files and the Servicing Records to the extent that Seller is permitted by law to act through an agent.

TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OR SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND SELLER ON ITS OWN BEHALF AND ON BEHALF OF SELLER’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

IN WITNESS WHEREOF, Seller has caused this Power of Attorney to be executed as a

deed this [ ] day of [        ], 2022.

[SIGNATURES ON THE FOLLOWING PAGE]

TERRA MORTGAGE CAPITAL I, LLC

By:     
Name:
Title:

EXHIBIT V

EXHIBIT V-A

REPRESENTATIONS AND WARRANTIES
REGARDING THE PURCHASED ASSETS

With respect to each Purchased Asset and the related Underlying Mortgaged Property or Underlying Mortgaged Properties, on the related Purchase Date and at all times while this Agreement and any Transaction contemplated hereunder is in effect, Seller shall be deemed to make the following representations and warranties to Buyer as of such date; provided, however, that, with respect to any Purchased Asset, such representations and warranties shall be deemed to be modified by any Requested Exceptions Report delivered by Seller to Buyer prior to the issuance of a Confirmation with respect thereto.

(1)Whole Loan; Ownership of Purchased Assets. Each Purchased Asset is an Eligible Asset. At the time of the sale, transfer and assignment to Buyer, no Mortgage Note or Mortgage was subject to any assignment (other than assignments to Seller), participation or pledge, and Seller had good title to, and was the sole owner of, each Purchased Asset free and clear of any and all liens, charges, pledges, encumbrances, participations, any other ownership interests on, in or to such Purchased Asset. Seller has full right and authority to sell, assign and transfer each Purchased Asset, and the assignment to Buyer constitutes a legal, valid and binding assignment of such Purchased Asset free and clear of any and all liens, pledges, charges or security interests of any nature encumbering such Purchased Asset.

(2)Loan Document Status. Each related Mortgage Note, Mortgage, Assignment of Leases (if a separate instrument), guaranty and other agreement executed by or on behalf of the related Mortgagor, guarantor or other obligor in connection with such Purchased Asset is the legal, valid and binding obligation of the related Mortgagor, guarantor or other obligor (subject to any non-recourse provisions contained in any of the foregoing agreements and any applicable state anti-deficiency, one-action or market value limit deficiency legislation), as applicable, and is enforceable in accordance with its terms, except (a) as such enforcement may be limited by (i) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and (b) that certain provisions in such Purchased Asset Documents (including, without limitation, provisions requiring the payment of default interest, late fees or prepayment/yield maintenance or prepayment fees, charges and/or premiums) are, or may be, further limited or rendered unenforceable by or under applicable law, but (subject to the limitations set forth in clause (a) above) such limitations or unenforceability will not render such Purchased Asset Documents invalid as a whole or materially interfere with the mortgagee’s realization of the principal benefits and/or security provided thereby (clauses (a) and (b) collectively, the “Standard Qualifications”). Except as set forth in the immediately preceding sentences, there is no valid offset, defense, counterclaim or right of rescission available to the related borrower with respect to any of the related Mortgage Notes, Mortgages or other Purchased Asset Documents, including, without limitation, any such valid offset, defense, counterclaim or right based on intentional fraud by Seller in connection with the origination of the Purchased Asset, that would deny the mortgagee the principal benefits intended to be provided by the Mortgage Note, Mortgage or other Purchased Asset Documents.

(3)Mortgage Provisions. The Purchased Asset Documents for each Purchased Asset contain provisions that render the rights and remedies of the holder thereof adequate for the practical realization against the Underlying Mortgaged Property of the principal benefits

of the security intended to be provided thereby, including realization by judicial or, if applicable, non judicial foreclosure subject to the limitations set forth in the Standard Qualifications.

(4)Hospitality Provisions. The Purchased Asset Documents for each Purchased Asset that is secured by a hospitality property operated pursuant to a franchise agreement includes an executed comfort letter or similar agreement signed by the Mortgagor and franchisor of such property enforceable against such franchisor, either directly or as an assignee of the originator. The Mortgage or related security agreement for each Purchased Asset secured by a hospitality property creates a security interest in the revenues of such property for which a UCC financing statement has been filed in the appropriate filing office.

(5)Mortgage Status; Waivers and Modifications. Since origination and except by written instruments set forth in the related Purchased Asset File or as otherwise provided in the related Purchased Asset Documents (a) the material terms of such Mortgage, Mortgage Note, guaranty, participation agreement, if applicable, and related Purchased Asset Documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect that could have a material adverse effect on Purchased Asset; (b) no related Underlying Mortgaged Property or any portion thereof has been released from the lien of the related Mortgage in any manner which materially interferes with the security intended to be provided by such Mortgage or the use or operation of the remaining portion of such Underlying Mortgaged Property; and (c) neither the related borrower nor the related guarantor nor the related participating Person has been released from its material obligations under the Purchased Asset Documents. With respect to each Purchased Asset, except as contained in a written document included in the Purchased Asset File, there have been no modifications, amendments or waivers, that could be reasonably expected to have a material adverse effect on such Purchased Asset consented to by Seller.

(6)Lien; Valid Assignment. Subject to the Standard Qualifications, each assignment of Mortgage and assignment of Assignment of Leases to Buyer constitutes a legal, valid and binding assignment to Buyer. Each related Mortgage and Assignment of Leases is freely assignable without the consent of the related Mortgagor. Each related Mortgage is a legal, valid and enforceable first lien on the related Mortgagor’s fee or leasehold interest in the Underlying Mortgaged Property in the principal amount of such Purchased Asset or allocated loan amount (subject only to Permitted Encumbrances, except as the enforcement thereof may be limited by the Standard Qualifications. Such Underlying Mortgaged Property (subject to and excepting Permitted Encumbrances) is free and clear of any recorded mechanics’ liens, recorded materialmen’s liens and other recorded encumbrances, and no rights exist which under law could give rise to any such lien or encumbrance that would be prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy (as described below). Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Purchased Asset establishes and creates a valid and enforceable lien on property described therein, except as such enforcement may be limited by Standard Qualifications subject to the limitations described in Paragraph (9) below. Notwithstanding anything herein to the contrary, no representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of UCC financing statements is required in order to effect such perfection.

(7)Permitted Liens; Title Insurance. Each Underlying Mortgaged Property securing a Purchased Asset is covered by a Title Policy in the original principal amount of such Purchased Asset (or with respect to a Purchased Asset secured by multiple properties, an

amount equal to at least the allocated loan amount with respect to the Title Policy for each such property) after all advances of principal (including any advances held in escrow or reserves), that insures for the benefit of the owner of the indebtedness secured by the Mortgage, the first priority lien of the Mortgage, which lien is subject only to Permitted Encumbrances. None of the Permitted Encumbrances are mortgage liens that are senior to or coordinate and co-equal with the lien of the related Mortgage. Such Title Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, all premiums thereon have been paid and no claims have been made by Seller thereunder and no claims have been paid thereunder. Neither Seller, nor to Seller’s knowledge, any other holder of the Purchased Asset, has done, by act or omission, anything that would materially impair the coverage under such Title Policy. Each Title Policy contains no exclusion for, or affirmatively insures (except for any Underlying Mortgaged Property located in a jurisdiction where such affirmative insurance is not available in which case such exclusion may exist), (a) that the area shown on the survey is the same as the property legally described in the Mortgage and (b) to the extent that the Underlying Mortgaged Property consists of two or more adjoining parcels, such parcels are contiguous.

(8)Junior Liens. There are no subordinate mortgages or junior liens securing the payment of money encumbering the related Underlying Mortgaged Property (other than Permitted Encumbrances). Seller has no knowledge of any mezzanine debt secured directly by interests in the related Mortgagor.

(9)Assignment of Leases. There exists as part of the related Purchased Asset File an Assignment of Leases (either as a separate instrument or incorporated into the related Mortgage). Subject to the Permitted Encumbrances, each related Assignment of Leases creates a valid first-priority collateral assignment of, or a valid first-priority lien or security interest in, rents and certain rights under the related lease or leases, subject only to a license granted to the related Mortgagor to exercise certain rights and to perform certain obligations of the lessor under such lease or leases, including the right to operate the related leased property, except as the enforcement thereof may be limited by the Standard Qualifications. No Person other than the related Mortgagor owns any interest in any payments due under such lease or leases that is superior to or of equal priority with the lender’s interest therein. The related Mortgage or related Assignment of Leases, subject to applicable law, provides that, upon an event of default under the Purchased Asset, a receiver is permitted to be appointed for the collection of rents or for the related mortgagee to enter into possession to collect the rents or for rents to be paid directly to the mortgagee.

(10)UCC Filings. Seller has filed and/or recorded or caused to be filed and/or recorded (or, if not filed and/or recorded, have been submitted in proper form for filing and/or recording), UCC-1 financing statements in the appropriate public filing and/or recording offices necessary at the time of the origination of the Purchased Asset to perfect a valid security interest in all items of physical personal property reasonably necessary to operate such Underlying Mortgaged Property owned by such Mortgagor and located on the related Underlying Mortgaged Property (other than any non-material personal property, any personal property subject to a purchase money security interest, a sale and leaseback financing arrangement as permitted under the terms of the related Purchased Asset Documents or any other personal property leases applicable to such personal property), to the extent perfection may be effected pursuant to applicable law by recording or filing, as the case may be. Subject to the Standard Qualifications, each related Mortgage (or equivalent document) creates a valid and enforceable lien and security interest on the items of personalty described above. No representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control

of such items or actions other than the filing of UCC-1 financing statements are required in order to effect such perfection. Each UCC-1 financing statement, if any, filed with respect to personal property constituting a part of the related Underlying Mortgaged Property and each UCC-2 or UCC-3 assignment, if any, of such financing statement to Seller was in suitable form for filing in the filing office in which such financing statement was filed.

(11)Condition of Property. Seller or the originator of the Purchased Asset inspected or caused to be inspected each related Underlying Mortgaged Property within six months of origination of the Purchased Asset and within twelve months of the Purchase Date. An engineering report or property condition assessment was prepared in connection with the origination of each Purchased Asset no more than twelve months prior to the Purchase Date. To Seller’s knowledge, based solely upon due diligence customarily performed in connection with the origination of comparable mortgage loans, each related Underlying Mortgaged Property was (a) free and clear of any material damage, (b) in good repair and condition and (c) is free of structural defects, except in each case (i) for any damage or deficiencies that would not materially and adversely affect the use, operation or value of such Underlying Mortgaged Property as security for the Purchased Asset, (ii) if such repairs have been completed or (iii) if escrows in an aggregate amount consistent with the standards utilized by Seller with respect to similar loans its holds for its own account have been established, which escrows will in all events be in an aggregate amount not less than the estimated cost of such repairs. Seller has no knowledge of any material issues with the physical condition of the Underlying Mortgaged Property that Seller believes would have a material adverse effect on the use, operation or value of the Underlying Mortgaged Property other than those disclosed in the engineering report and those addressed in clauses (i), (ii) and (iii) above.

(12)Taxes and Assessments. All real estate taxes, governmental assessments and other similar outstanding governmental charges (including, without limitation, water and sewage charges), or installments thereof, that could be a lien on the related Underlying Mortgaged Property that would be of equal or superior priority to the lien of the Mortgage and that prior to the Purchase Date have become delinquent in respect of each related Underlying Mortgaged Property have been paid, or, if the appropriate amount of such taxes or charges is being appealed or is otherwise in dispute, an escrow of funds has been established in an amount sufficient to cover such payments and reasonably estimated interest and penalties, if any, thereon. For purposes of this Paragraph (12), real estate taxes and governmental assessments and other outstanding governmental charges and installments thereof shall not be considered delinquent until the earlier of (a) the date on which interest and/or penalties would first be payable thereon and (b) the date on which enforcement action is entitled to be taken by the related taxing authority.

(13)Condemnation. As of the date of origination and to Seller’s knowledge as of the Purchase Date, there is no proceeding pending, and, to Seller’s knowledge as of the date of origination and as of the Purchase Date, there is no proceeding threatened, for the total or partial condemnation of such Underlying Mortgaged Property that would have a material adverse effect on the value, use or operation of the Underlying Mortgaged Property.

(14)Actions Concerning Purchased Asset. As of the date of origination and to Seller’s knowledge as of the Purchase Date, there was no pending, filed or threatened action, suit or proceeding, arbitration or governmental investigation involving any Mortgagor, guarantor, or the Underlying Mortgaged Property, an adverse outcome of which would reasonably be expected to materially and adversely affect (a) such Mortgagor’s title to the Underlying Mortgaged Property, (b) the validity or enforceability of the Mortgage, (c) such Mortgagor’s ability to perform under the related Purchased Asset Documents, (d)

such guarantor’s ability to perform under the related guaranty, (e) the use, operation or value of the Underlying Mortgaged Property, (f) the principal benefit of the security intended to be provided by the Purchased Asset Documents, (g) the current ability of the Underlying Mortgaged Property to generate net cash flow sufficient to service such Purchased Asset or (h) the current principal use of the Underlying Mortgaged Property.

(15)Escrow Deposits. All escrow deposits and payments required to be escrowed with lender pursuant to the Purchased Asset Documents are in the possession, or under the control, of Seller or its servicer, and there are no deficiencies (subject to any applicable grace or cure periods) in connection therewith, and all such escrows and deposits (or the right thereto) that are required to be escrowed with lender under the related Purchased Asset Documents are being conveyed by Seller to Buyer or its servicer. Any and all requirements under the Purchased Asset Documents as to completion of any material improvements and as to disbursements of any funds escrowed for such purpose, which requirements were to have been complied with on or before the Purchase Date, have been complied with in all material respects or the funds so escrowed have not been released. No other escrow amounts have been released except in accordance with the terms and conditions of the Purchased Asset Documents.

(16)No Holdbacks. The principal balance of the Purchased Asset set forth on the Purchased Asset Schedule has been fully disbursed as of the Purchase Date and there is no requirement for future advances thereunder (except in those cases where the full amount of the Purchased Asset has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the satisfaction of certain conditions relating to leasing, repairs or other matters with respect to the related Underlying Mortgaged Property, the Mortgagor or other considerations determined by Seller to merit such holdback), and any requirements or conditions to disbursements of any loan proceeds held in escrow have been satisfied with respect to any disbursements of any such escrow fund made on or prior to the date hereof.

(17)Insurance. Each related Underlying Mortgaged Property is, and is required pursuant to the related Mortgage to be, insured by a property insurance policy providing coverage for loss in accordance with coverage found under a “special cause of loss form” or “all risk form” that includes replacement cost valuation issued by an insurer meeting the requirements of the related Purchased Asset Documents and having a claims-paying or financial strength rating of any one of the following: (i) at least “A-:VII” from A.M. Best Company, Inc., (ii) at least “A3” (or the equivalent) from Moody’s or (iii) at least “A-” from Standard & Poor’s (collectively, the “Insurance Rating Requirements”), in an amount (subject to a customary deductible) not less than the lesser of (1) the original principal balance of the Purchased Asset and (2) the full insurable value on a replacement cost basis of the improvements, furniture, furnishings, fixtures and equipment owned by the Mortgagor and included in the Underlying Mortgaged Property (with no deduction for physical depreciation), but, in any event, not less than the amount necessary or containing such endorsements as are necessary to avoid the operation of any coinsurance provisions with respect to the related Underlying Mortgaged Property.

Each related Underlying Mortgaged Property is also covered, and required to be covered pursuant to the related Loan Documents, by business interruption or rental loss insurance which (subject to a customary deductible) (i) covers a period of not less than 12 months (or with respect to each Purchased Asset on a single asset with a principal balance of $50 million or more, 18 months); (ii) for a Purchased Asset with a principal balance of $50 million or more, contains a 180 day “extended period of indemnity”; and (iii) covers the actual loss sustained during restoration.

If any material part of the improvements, exclusive of a parking lot, located on a Underlying Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards, the related Mortgagor is required to maintain insurance in the maximum amount available under the National Flood Insurance Program, plus such additional excess flood coverage in an amount as is generally required by prudent institutional commercial mortgage lenders originating mortgage loans for securitization.

If windstorm and/or windstorm related perils and/or “named storms” are excluded from the primary property damage insurance policy, the Underlying Mortgaged Property is insured by a separate windstorm insurance policy issued by an insurer meeting the Insurance Rating Requirements or endorsement covering damage from windstorm and/or windstorm related perils and/or named storms in an amount at least equal to 100% of the full insurable value on a replacement cost basis of the improvements and personalty and fixtures included in the related Underlying Mortgaged Property by an insurer meeting the Insurance Rating Requirement.

The Underlying Mortgaged Property is covered, and required to be covered pursuant to the related Purchased Asset Documents, by a commercial general liability insurance policy issued by an insurer meeting the Insurance Rating Requirements including coverage for property damage, contractual damage and personal injury (including bodily injury and death) in amounts as are generally required by a prudent institutional commercial mortgage lender for loans originated for securitization, and in any event not less than $1 million per occurrence and $2 million in the aggregate.

An architectural or engineering consultant has performed an analysis of each of the Underlying Mortgaged Properties located in seismic zones 3 or 4 in order to evaluate the structural and seismic condition of such property, for the sole purpose of assessing either the scenario expected limit (the “SEL”) or the probable maximum loss (the “PML”) for the Underlying Mortgaged Property in the event of an earthquake. In such instance, the SEL or PML, as applicable, was based on a 475-year return period, an exposure period of 50 years and a 10% probability of exceedance. If the resulting report concluded that the SEL or PML, as applicable, would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Underlying Mortgaged Property was obtained by an insurer rated at least “A:VII” by A.M. Best Company, Inc. or “A3” (or the equivalent) from Moody’s or “A-” by Standard & Poor’s in an amount not less than 150% of the SEL or PML, as applicable.

The Purchased Asset Documents require insurance proceeds in respect of a property loss to be applied either (a) to the repair or restoration of all or part of the related Underlying Mortgaged Property, with respect to all property losses in excess of 5% of the then outstanding principal amount of the related Purchased Asset, the lender (or a trustee appointed by it) having the right to hold and disburse such proceeds as the repair or restoration progresses, or (b) to the reduction of the outstanding principal balance of such Purchased Asset together with any accrued interest thereon.

All premiums on all insurance policies referred to in this Paragraph (17) required to be paid as of the Purchase Date have been paid, and such insurance policies name the lender under the Purchased Asset and its successors and assigns as a loss payee under a mortgagee endorsement clause or, in the case of the general liability insurance policy, as named or additional insured. Such insurance policies will inure to the benefit of Buyer. Each related Purchased Asset obligates the related Mortgagor to maintain all such insurance and, at such Mortgagor’s failure to do so, authorizes the lender to maintain such insurance at the Mortgagor’s cost and expense and to charge such Mortgagor for

related premiums and other related expenses, including reasonable attorney’s fees. All such insurance policies (other than commercial liability policies) require at least 10 days’ prior notice to the lender of termination or cancellation arising because of nonpayment of a premium and at least 30 days prior notice to the lender of termination or cancellation (or such lesser period, not less than 10 days, as may be required by applicable law) arising for any reason other than non-payment of a premium and no such notice has been received by Seller.

(18)Access; Utilities; Separate Tax Lots. Each Underlying Mortgaged Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has access via an irrevocable easement or irrevocable right of way permitting ingress and egress to/from a public road, (b) is served by or has uninhibited access rights to public or private water and sewer (or well and septic) and all required utilities, all of which are appropriate for the current use of the Underlying Mortgaged Property, and (c) constitutes one or more separate tax parcels which do not include any property which is not part of the Underlying Mortgaged Property or is subject to an endorsement under the related Title Policy insuring the Underlying Mortgaged Property, or in certain cases, an application has been, or will be, made to the applicable governing authority for creation of separate tax lots, in which case the Purchased Asset Documents require the Mortgagor to escrow an amount sufficient to pay taxes for the existing tax parcel of which the Underlying Mortgaged Property is a part until the separate tax lots are created or the non-recourse carveout guarantor under the Purchased Asset Documents has indemnified the mortgagee for any loss suffered in connection therewith.

(19)No Encroachments. To Seller’s knowledge based solely on surveys obtained in connection with origination (which may have been a previously existing “as built” survey) and the lender’s Title Policy (or, if such policy is not yet issued, a pro forma title policy, a preliminary title policy with escrow instructions or a “marked up” commitment) obtained in connection with the origination of each Purchased Asset, all material improvements that were included for the purpose of determining the appraised value of the related Underlying Mortgaged Property at the time of the origination of such Purchased Asset are within the boundaries of the related Underlying Mortgaged Property, except encroachments that do not materially and adversely affect the value or current use of such Underlying Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy. No improvements on adjoining parcels encroach onto the related Underlying Mortgaged Property except for encroachments that do not materially and adversely affect the value or current use of such Underlying Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy. No material improvements encroach upon any easements except for encroachments the removal of which would not materially and adversely affect the value or current use of such Underlying Mortgaged Property or for which insurance or endorsements have been obtained under the Title Policy.

(20)No Contingent Interest or Equity Participation. No Purchased Asset has a shared appreciation feature, any other contingent interest feature or a negative amortization feature (except that an anticipated repayment date loan may provide for the accrual of the portion of interest in excess of the rate in effect prior to the anticipated Repayment Date) or an equity participation by Seller.

(21)REMIC. The Purchased Asset is a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code (but determined without regard to the rule in Treasury Regulations Section 1.860G-2(f)(2) that treats certain defective mortgage loans as qualified mortgages), and, accordingly, (a) the issue price of the Purchased Asset to the related Mortgagor at origination did not exceed the non-contingent principal amount of

the Purchased Asset and (b) either: (i) such Purchased Asset is secured by an interest in real property (including buildings and structural components thereof, but excluding personal property) having a fair market value (A) at the date the Purchased Asset was originated at least equal to 80% of the adjusted issue price of the Purchased Asset on such date or (B) at the Purchase Date at least equal to 80% of the adjusted issue price of the Purchased Asset on such date, provided that, for purposes hereof, the fair market value of the real property interest must first be reduced by (1) the amount of any lien on the real property interest that is senior to the Purchased Asset and (2) a proportionate amount of any lien that is in parity with the Purchased Asset; or (ii) substantially all of the proceeds of such Purchased Asset were used to acquire, improve or protect the real property which served as the only security for such Purchased Asset (other than a recourse feature or other third-party credit enhancement within the meaning of Treasury Regulations Section 1.860G-2(a)(1)(ii)). If the Purchased Asset was “significantly modified” prior to the Purchase Date so as to result in a taxable exchange under Section 1001 of the Code, it either (i) was modified as a result of the default or reasonably foreseeable default of such Purchased Asset or (ii) satisfies the provisions of either clause (b)(i)(A) above (substituting the date of the last such modification for the date the Purchased Asset was originated) or clause (b)(i)(B), including the proviso thereto. Any prepayment premium and yield maintenance charges applicable to the Purchased Asset constitute “customary prepayment penalties” within the meaning of Treasury Regulations Section 1.860G-(b)(2). All terms used in this Paragraph (21) shall have the same meanings as set forth in the related Treasury Regulations.

(22)Compliance with Usury Laws. The interest rate (exclusive of any default interest, late charges, yield maintenance charges, exit fees, or prepayment premiums) of such Purchased Asset complied as of the date of origination with, or was exempt from, applicable state or federal laws, regulations and other requirements pertaining to usury.

(23)Authorized to do Business. To the extent required under applicable law, as of the Purchase Date and as of each date that such entity held the Mortgage Note, each holder of the Mortgage Note was authorized to transact and do business in the jurisdiction in which each related Underlying Mortgaged Property is located, or the failure to be so authorized does not materially and adversely affect the enforceability of such Purchased Asset by Buyer.

(24)Trustee under Deed of Trust. With respect to each Mortgage which is a deed of trust, a trustee, duly qualified under applicable law to serve as such, currently so serves and is named in the deed of trust or has been substituted in accordance with the Mortgage and applicable law or may be substituted in accordance with the Mortgage and applicable law by the related mortgagee, and except in connection with a trustee’s sale after a default by the related Mortgagor or in connection with any full or partial release of the related Underlying Mortgaged Property or related security for such Purchased Asset, and except in connection with a trustee’s sale after a default by the related Mortgagor, no fees are payable to such trustee except for de minimis fees paid.

(25)Local Law Compliance. To Seller’s knowledge, based upon any of a letter from any governmental authorities, a legal opinion, an architect’s letter, a zoning consultant’s report, an endorsement to the related Title Policy, or other affirmative investigation of local law compliance consistent with the investigation conducted by Seller for similar commercial, multifamily and manufactured housing community mortgage loans intended for securitization, with respect to the improvements located on or forming part of each Underlying Mortgaged Property securing a Purchased Asset, there are no material violations of applicable laws, zoning ordinances, rules, covenants, building codes, restrictions and land laws (collectively, “Zoning Regulations”) other than those which (i)

constitute a legal non-conforming use or structure, as to which the Underlying Mortgaged Property may be restored or repaired to the full extent necessary to maintain the use of the structure immediately prior to a casualty or the inability to restore or repair to the full extent necessary to maintain the use or structure immediately prior to the casualty would not materially and adversely affect the use or operation of the Underlying Mortgaged Property, (ii) are insured by the Title Policy or other insurance policy, (iii) are insured by law and ordinance insurance coverage in amounts customarily required by prudent commercial mortgage lenders for loans originated for securitization that provides coverage for additional costs to rebuild and/or repair the property to current Zoning Regulations or (iv) would not have a material adverse effect on the Purchased Asset. The terms of the Purchased Asset Documents require the Mortgagor to comply in all material respects with all applicable governmental regulations, zoning and building laws.

(26)Licenses and Permits. Each Mortgagor covenants in the Purchased Asset Documents that it shall keep all material licenses, permits, franchises, certificates of occupancy, consents and applicable governmental authorizations necessary for its operation of the Underlying Mortgaged Property in full force and effect, and to Seller’s knowledge based upon a letter from any government authorities or other affirmative investigation of local law compliance consistent with the investigation conducted by Seller for similar commercial, multifamily and manufactured housing community mortgage loans intended for securitization, all such material licenses, permits and applicable governmental authorizations are in effect. The Purchased Asset Documents require the related Mortgagor to be qualified to do business in the jurisdiction in which the related Underlying Mortgaged Property is located and for the Mortgagor and the Underlying Mortgaged Property to be in compliance in all material respects with all regulations, zoning and building laws.

(27)Recourse Obligations. The Purchased Asset Documents for each Purchased Asset provide that such Purchased Asset is non-recourse to the related parties thereto except that: (a) the related Mortgagor and a guarantor (which is a natural person or persons, or an entity distinct from the Mortgagor (but may be affiliated with Mortgagor) that has assets other than equity in the related Underlying Mortgaged Property that are not de minimis) shall be fully liable for losses, liabilities, costs and damages arising from certain acts of the related Mortgagor and/or its principals specified in the related Purchased Asset Documents, which acts generally include the following: (i) acts of fraud or intentional material misrepresentation, (ii) misappropriation of rents (following an event of default), insurance proceeds or condemnation awards, (iii) intentional material physical waste of the Underlying Mortgaged Property, (iv) intentional misconduct and (v) any breach of the environmental covenants contained in the related Loan Documents, and (b) the Purchased Asset shall become full recourse to the related Mortgagor and a guarantor (which is a natural person or persons, or an entity distinct from the Mortgagor (but may be affiliated with Mortgagor) that has assets other than equity in the related Underlying Mortgaged Property that are not de minimis), upon any of the following events: (i) if any petition for bankruptcy, insolvency, dissolution or liquidation pursuant to federal bankruptcy law, or nay similar federal or state law, shall be filed, consented to, or acquiesced in by the Mortgagor, (ii) Mortgagor and/or its principals shall have colluded with other creditors to cause an involuntary bankruptcy filing with respect to the Mortgagor or (iii) upon the transfer of either the Underlying Mortgaged Property or equity interests in Mortgagor made in violation of the Purchased Asset Documents.

(28)Mortgage Releases. The terms of the related Mortgage or related Purchased Asset Documents do not provide for release of any material portion of the Underlying Mortgaged Property from the lien of the Mortgage except (a) a partial release, accompanied by principal repayment of not less than a specified percentage at least equal

to the lesser of (i) 115% of the related allocated loan amount of such portion of the Underlying Mortgaged Property and (ii) the outstanding principal balance of the Purchased Asset, (b) upon payment in full of such Purchased Asset, (c) releases of out-parcels that are unimproved or other portions of the Underlying Mortgaged Property which will not have a material adverse effect on the underwritten value of the Underlying Mortgaged Property and which were not afforded any material value in the appraisal obtained at the origination of the Purchased Asset and are not necessary for physical access to the Underlying Mortgaged Property or compliance with zoning requirements, or (d) as required pursuant to an order of condemnation. With respect to any partial release under the preceding clause (a) or 101 , either: (i) such release of collateral (A) would not constitute a “significant modification” of the subject Purchased Asset within the meaning of Treasury Regulations Section 1.860G-2(b)(2) and (B) would not cause the subject Purchased Asset to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the Code; or (ii) the mortgagee or servicer can, in accordance with the related Purchased Asset Documents, condition such release of collateral on the related Mortgagor’s delivery of an opinion of tax counsel to the effect specified in the immediately preceding clause (i). For purposes of the preceding clause (i), if the fair market value of the real property constituting such Underlying Mortgaged Property after the release is not equal to at least 80% of the principal balance of the Purchased Asset outstanding after the release, the Mortgagor is required to make a payment of principal in an amount not less than the amount required by the provisions governing a “real estate mortgage investment conduit” as defined in Section 860D of the Code (the “REMIC Provisions”).

In the event of a taking of any portion of a Underlying Mortgaged Property by a State or any political subdivision or authority thereof, whether by legal proceeding or by agreement, the Mortgagor can be required to pay down the principal balance of the Purchased Asset in an amount not less than the amount required by the REMIC Provisions and, to such extent, awards are not required to be applied to the restoration of the Underlying Mortgaged Property or to be released to the Mortgagor, if, immediately after the release of such portion of the Underlying Mortgaged Property from the lien of the Mortgage (but taking into account the planned restoration) the fair market value of the real property constituting the remaining Underlying Mortgaged Property is not equal to at least 80% of the remaining principal balance of the Purchased Asset.

No such Purchased Asset that is secured by more than one Underlying Mortgaged Property or that is cross-collateralized with another Purchased Asset permits the release of cross-collateralization of the related Underlying Mortgaged Properties, other than in compliance with the REMIC Provisions.

(29)Financial Reporting and Rent Rolls. The Purchased Asset Documents for each Purchased Asset require the Mortgagor to provide the owner or holder of the Mortgage with quarterly (other than for single-tenant properties) and annual operating statements, and quarterly (other than for single-tenant properties) rent rolls for properties that have leases contributing more than 5% of the in-place base rent and annual financial statements, which annual financial statements with respect to each Purchased Asset with more than one Mortgagor are in the form of an annual combined balance sheet of the Mortgagor entities (and no other entities), together with the related combined statements of operations, members’ capital and cash flows, including a combining balance sheet and statement of income for the Underlying Mortgaged Properties on a combined basis.

(30)Acts of Terrorism Exclusion. With respect to each Purchased Asset over $20 million, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) do not specifically exclude Acts

of Terrorism, as defined in the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2007 (collectively, the “TRIA”), from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each other Purchased Asset, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) does not specifically exclude Acts of Terrorism, as defined in TRIA, from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each Purchased Asset, the related Purchased Asset Documents do not expressly waive or prohibit the mortgagee from requiring coverage for Acts of Terrorism, as defined in the TRIA, or damages related thereto except to the extent that any right to require such coverage may be limited by commercial availability on commercially reasonable terms; provided, however, that if the TRIA or a similar or subsequent statute is not in effect, then, provided that terrorism insurance is commercially available, the Mortgagor under each Purchased Asset is required to carry terrorism insurance, but in such event the Mortgagor shall not be required to spend on terrorism insurance coverage more than two times the amount of the insurance premium that is payable in respect of the property and business interruption/rental loss insurance required under the related Purchased Asset Documents (without giving effect to the cost of terrorism and earthquake components of such casualty and business interruption/rental loss insurance) at the time of the origination of the Purchased Asset, and if the cost of terrorism insurance exceeds such amount, the borrower is required to purchase the maximum amount of terrorism insurance available with funds equal to such amount.

(31)Due on Sale or Encumbrance. Subject to specific exceptions set forth below, each Purchased Asset contains a “due on sale” or other such provision for the acceleration of the payment of the unpaid principal balance of such Purchased Asset if, without the consent of the holder of the Mortgage (which consent, in some cases, may not be unreasonably withheld) and/or complying with the requirements of the related Purchased Asset Documents (which provide for transfers without the consent of the lender which are customarily acceptable to prudent commercial and multifamily mortgage lending institutions on the security of property comparable to the related Underlying Mortgaged Property, including, without limitation, transfers of worn-out or obsolete furnishings, fixtures, or equipment promptly replaced with property of equivalent value and functionality and transfers by leases entered into in accordance with the Purchased Asset Documents), (a) the related Underlying Mortgaged Property, or any equity interest of greater than 50% in the related Mortgagor, is directly or indirectly pledged, transferred or sold, other than as related to (i) family and estate planning transfers or transfers upon death or legal incapacity, (ii) transfers to certain affiliates as defined in the related Purchased Asset Documents, (iii) transfers that do not result in a change of Control of the related Mortgagor or transfers of passive interests so long as the guarantor retains Control, (iv) transfers to another holder of direct or indirect equity in the Mortgagor, a specific Person designated in the related Purchased Asset Documents or a Person satisfying specific criteria identified in the related Purchased Asset Documents, such as a qualified equityholder, (v) transfers of stock or similar equity units in publicly traded companies or (vi) a substitution or release of collateral within the parameters of Paragraph (28) herein, or (vii) to the extent set forth in any Exception Report, by reason of any mezzanine debt that existed at the origination of the related Purchased Asset, or future permitted mezzanine debt in each case as set forth in any Exception Report or (b) the related Underlying Mortgaged Property is encumbered with a subordinate lien or security interest against the related Underlying Mortgaged Property, other than any Permitted Encumbrances. The Mortgage or other Purchased Asset Documents provide that to the extent any rating agency fees are incurred in connection with the review of and consent to any transfer or encumbrance, the Mortgagor is responsible for such payment

along with all other reasonable fees and expenses incurred by the Mortgagee relative to such transfer or encumbrance. For purposes of the foregoing representation, “Control” means the power to direct the management and policies of an entity, directly or indirectly, whether through the ownership of voting securities or other beneficial interests, by contract or otherwise.

(32)Single-Purpose Entity. Each Purchased Asset requires the borrower to be a Single-Purpose Entity for at least as long as the Purchased Asset is outstanding. Both the Purchased Asset Documents and the organizational documents of the Mortgagor with respect to each Purchased Asset with a principal amount on the Purchase Date of $5 million or more provide that the borrower is a Single-Purpose Entity, and each Purchased Asset with a principal amount on the Purchase Date of $20 million or more has a counsel’s opinion regarding non-consolidation of the Mortgagor. For purposes of this Paragraph (32), a “Single-Purpose Entity” shall mean an entity, other than an individual, whose organizational documents provide substantially to the effect that it was formed or organized solely for the purpose of owning and operating one or more of the Underlying Mortgaged Properties securing the Purchased Assets and prohibit it from engaging in any business unrelated to such Underlying Mortgaged Property or Properties, and whose organizational documents further provide, or which entity represented in the related Purchased Asset Documents, substantially to the effect that it does not have any assets other than those related to its interest in and operation of such Underlying Mortgaged Property or Properties, or any indebtedness other than as permitted by the related Mortgage(s) or the other related Purchased Asset Documents, that it has its own books and records and accounts separate and apart from those of any other person, and that it holds itself out as a legal entity, separate and apart from any other person or entity.

(33)Defeasance. With respect to any fixed rate Purchased Asset that, pursuant to the Purchased Asset Documents, can be defeased, (i) the Purchased Asset Documents provide for defeasance as a unilateral right of the Mortgagor, subject to satisfaction of conditions specified in the Purchased Asset Documents; (ii) the Purchased Asset cannot be defeased within two years after the closing date of a securitization of such Purchased Asset; (iii) the Mortgagor is permitted to pledge only United States “government securities” within the meaning of Treasury Regulations Section 1.860G-2(a)(8)(ii), the revenues from which will be sufficient to make all scheduled payments under the Purchased Asset when due, including the entire remaining principal balance on the maturity date (or on or after the first date on which payment may be made without payment of a yield maintenance charge or prepayment penalty) and if the Purchased Asset permits partial releases of real property in connection with partial defeasance, the revenues from the collateral will be sufficient to pay all such scheduled payments calculated on a principal amount equal to a specified percentage at least equal to 115% of the allocated loan amount for the real property to be released; (iv) the defeasance collateral is not permitted to be subject to prepayment, call, or early redemption; (v) the Mortgagor is required to provide a certification from an independent certified public accountant that the collateral is sufficient to make all scheduled payments under the Mortgage Note as set forth in (iii) above; (vi) if the Mortgagor would continue to own assets in addition to the defeasance collateral, the portion of the Purchased Asset secured by defeasance collateral is required to be assumed by a Single-Purpose Entity; (vii) the Mortgagor is required to provide an opinion of counsel that the mortgagee has a perfected security interest in such collateral prior to any other claim or interest; and (viii) the Mortgagor is required to pay all rating agency fees associated with defeasance (if rating confirmation is a specific condition precedent thereto) and all other reasonable expenses associated with defeasance, including, but not limited to, accountant’s fees and opinions of counsel.

(34)Ground Leases. For purposes of this Exhibit VIII, a “Ground Lease” shall mean a lease creating a leasehold estate in real property where the fee owner as the ground lessor conveys for a term or terms of years its entire interest in the land and buildings and other improvements, if any, comprising the premises demised under such lease to the ground lessee (who may, in certain circumstances, own the building and improvements on the land), subject to the reversionary interest of the ground lessor as fee owner and does not include industrial development agency (IDA) or similar leases for purposes of conferring a tax abatement or other benefit.

With respect to any Purchased Asset where the Purchased Asset is secured by a leasehold estate under a Ground Lease in whole or in part, and the related Mortgage does not also encumber the related lessor’s fee interest in such Underlying Mortgaged Property, based upon the terms of the Ground Lease and any estoppel or other agreement received from the ground lessor in favor of Seller, its successors and assigns, Seller represents and warrants that:

(a)(i) the Ground Lease or a memorandum regarding such Ground Lease has been duly recorded or submitted for recordation in a form that is acceptable for recording in the applicable jurisdiction; (ii) the Ground Lease or an estoppel or other agreement received from the ground lessor permits the interest of the lessee to be encumbered by the related Mortgage and does not restrict the use of the related Underlying Mortgaged Property by such lessee, its successors or assigns in a manner that would materially adversely affect the security provided by the related Mortgage and (iii) no material change in the terms of the Ground Lease had occurred since its recordation, except by any written instrument which are included in the related Purchased Asset File;

(b)the lessor under such Ground Lease has agreed in a writing included in the related Purchased Asset File (or in such Ground Lease) that the Ground Lease may not be amended or modified, or canceled or terminated, without the prior written consent of the lender (except termination or cancellation if (i) notice of a default under the Ground Lease is provided to lender and (ii) such default is curable by lender as provided in the Ground Lease but remains uncured beyond the applicable cure period), and no such consent has been granted by Seller since the origination of the Purchased Asset except as reflected in any written instruments which are included in the related Purchased Asset File;

(c)the Ground Lease has an original term (or an original term plus one or more optional renewal terms, which, under all circumstances, may be exercised, and will be enforceable, by either Mortgagor or the mortgagee) that extends not less than 20 years beyond the stated maturity of the related Purchased Asset, or 10 years past the stated maturity if such Purchased Asset fully amortizes by the stated maturity (or with respect to a Purchased Asset that accrues on an actual 360 basis, substantially amortizes);

(d)the Ground Lease either (i) is not subject to any liens or encumbrances superior to, or of equal priority with, the Mortgage, except for the related fee interest of the ground lessor and the Permitted Encumbrances, or (ii) is subject to a subordination, non-disturbance and attornment agreement to which the mortgagee on the lessor’s fee interest in the Underlying Mortgaged Property is subject;

(e)the Ground Lease does not place commercially unreasonable restrictions on the identity of the mortgagee and the Ground Lease is assignable to the holder of the Purchased Asset and its successors and assigns without the consent of the lessor

thereunder, and in the event it is so assigned, it is further assignable by the holder of the Purchased Asset and its successors and assigns without the consent of the lessor;

(f)Seller has not received any written notice of material default under or notice of termination of such Ground Lease and, to Seller’s knowledge, there is no material default under such Ground Lease and no condition that, but for the passage of time or giving of notice, would result in a material default under the terms of such Ground Lease and, to Seller’s knowledge, such Ground Lease is in full force and effect;

(g)the Ground Lease or ancillary agreement between the lessor and the lessee requires the lessor to give to the lender written notice of any default, and provides that no notice of default or termination is effective against the lender unless such notice is given to the lender;

(h)a lender is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the Ground Lease through legal proceedings) to cure any default under the Ground Lease which is curable after the lender’s receipt of notice of any default before the lessor may terminate the Ground Lease;

(i)the Ground Lease does not impose any restrictions on subletting that would be viewed as commercially unreasonable by a prudent commercial mortgage lender;

(j)under the terms of the Ground Lease, an estoppel or other agreement received from the ground lessor and the related Mortgage (taken together), any related insurance proceeds or the portion of the condemnation award allocable to the ground lessee’s interest (other than (i) de minim is amounts for minor casualties or (ii) in respect of a total or substantially total loss or taking as addressed in Paragraph (34)(k) below) will be applied either to the repair or to restoration of all or part of the related Underlying Mortgaged Property with (so long as such proceeds are in excess of the threshold amount specified in the related Purchased Asset Documents) the lender or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses, or to the payment of the outstanding principal balance of the Purchased Asset, together with any accrued interest;

(k)in the case of a total or substantially total taking or loss, under the terms of the Ground Lease, an estoppel or other agreement and the related Mortgage (taken together), any related insurance proceeds, or portion of the condemnation award allocable to ground lessee’s interest in respect of a total or substantially total loss or taking of the related Underlying Mortgaged Property to the extent not applied to restoration, will be applied first to the payment of the outstanding principal balance of the Purchased Asset, together with any accrued interest; and

(l)provided that the lender cures any defaults which are susceptible to being cured, the ground lessor has agreed to enter into a new lease with the lender upon termination of the Ground Lease for any reason, including rejection of the Ground Lease in a bankruptcy proceeding.

(35)Servicing. The servicing and collection practices used by Seller with respect to the Purchased Asset have been, in all material respects, legal and have met customary industry standards for servicing of similar commercial loans.

(36)Origination and Underwriting. The origination practices of Seller (or the related originator if Seller was not the originator) with respect to each Purchased Asset have been, in all material respects, legal and as of the date of its origination, such Purchased Asset and the origination thereof complied in all material respects with, or was exempt from, all requirements of federal, state or local laws and regulations relating to the origination of such Purchased Asset. At the time of origination of such Purchased Asset, the origination, due diligence and underwriting performed by or on behalf of Seller in connection with each Purchased Asset complied in all material respects with the terms, conditions and requirements of Seller’s origination, due diligence, underwriting procedures, guidelines and standards for similar commercial and multifamily loans.

(37)Rent Rolls; Operating Histories. Seller has obtained a rent roll (other than with respect to hospitality properties) certified by the related Mortgagor or the related guarantor(s) as accurate and complete in all material respects as of a date within 180 days of the date of origination of the related Purchased Asset. Seller has obtained operating histories (the “Certified Operating Histories”) with respect to each Underlying Mortgaged Property certified by the related Mortgagor or the related guarantor(s) as accurate and complete in all material respects as of a date within 180 days of the date of origination of the related Purchased Asset. The Certified Operating Histories collectively report on operations for a period equal to (a) at least a continuous three-year period or (b) in the event the Underlying Mortgaged Property was owned, operated or constructed by the Mortgagor or an affiliate for less than three years then for such shorter period of time.

(38)No Material Default; Payment Record. No Purchased Asset has been more than 30 days delinquent, without giving effect to any grace or cure period, in making required payments since origination, and as of the Purchase Date, no Purchased Asset is delinquent (beyond any applicable grace or cure period) in making required payments. To Seller’s knowledge, there is (a) no, and since origination there has been no, material default, breach, violation or event of acceleration existing under the related Purchased Asset Documents, or (b) no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration, which default, breach, violation or event of acceleration, in the case of either clause (a) or (b), materially and adversely affects the value of the Purchased Asset, or the value, use or operation of the related Underlying Mortgaged Property, provided, however, that this Paragraph (38) does not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of an exception scheduled to any other representation and warranty made by Seller in any Exception Report. No person other than the holder of such Purchased Asset may declare any event of default under the Purchased Asset or accelerate any indebtedness under the Purchased Asset Documents.

(39)Bankruptcy. As of the date of origination of the related Purchased Asset and to Seller’s knowledge as of the Purchase Date, neither the Underlying Mortgaged Property nor any portion thereof is the subject of, and no Mortgagor, guarantor or tenant occupying a single-tenant property is a debtor in state or federal bankruptcy, insolvency or similar proceeding.

(40)Organization of Mortgagor. With respect to each Purchased Asset, in reliance on certified copies of the organizational documents of the Mortgagor delivered by the Mortgagor in connection with the origination of such Purchased Asset, the Mortgagor is an entity organized under the laws of a state of the United States of America, the District of Columbia or the Commonwealth of Puerto Rico. No Purchased Asset has a Mortgagor that is an Affiliate of another borrower.

Seller has obtained an organizational chart or other description of each Mortgagor which identifies all beneficial controlling owners of the Mortgagor (i.e., managing members, general partners or similar controlling person for such Mortgagor) (the “Controlling Owner”) and all owners that hold a 20% or greater direct ownership share (the “Major Sponsors”). Seller (a) required questionnaires to be completed by each Controlling Owner and guarantor or performed other processes designed to elicit information from each Controlling Owner and guarantor regarding such Controlling Owner’s or guarantor’s prior history regarding any bankruptcies or other insolvencies, any felony convictions, and (b) performed or caused to be performed searches of the public records or services such as Lexis/Nexis, or a similar service designed to elicit information about each Controlling Owner, Major Sponsor and guarantor regarding such Controlling Owner’s, Major Sponsor’s or guarantor’s prior history regarding any bankruptcies or other insolvencies, any felony convictions, and provided, however, that manual public records searches were limited to the last 10 years (clauses (a) and (b) collectively, the “Sponsor Diligence”). Based solely on the Sponsor Diligence, to the knowledge of Seller, no Major Sponsor or guarantor (i) was in a state or federal bankruptcy or insolvency proceeding, (ii) had a prior record of having been in a state of federal bankruptcy or insolvency, or (iii) had been convicted of a felony.

(41)Environmental Conditions. At origination, each Mortgagor represented and warranted that to its knowledge no hazardous materials or any other substances or materials which are included under or regulated by Environmental Laws are located on, or have been handled, manufactured, generated, stored, processed, or disposed of on or released or discharged from the Underlying Mortgaged Property, except for those substances commonly used in the operation and maintenance of properties of kind and nature similar to those of the Underlying Mortgaged Property in compliance with all Environmental Laws and in a manner that does not result in contamination of the Underlying Mortgaged Property or in a material adverse effect on the value, use or operations of the Underlying Mortgaged Property.

A Phase I environmental site assessment (or update of a previous Phase I and or Phase II site assessment) and, with respect to certain Purchased Assets, a Phase II environmental site assessment (collectively, an “ESA”) meeting ASTM requirements was conducted by a reputable environmental consultant in connection with such Purchased Asset within 12 months prior to its origination date (or an update of a previous ESA was prepared), and such ESA either (i) did not identify the existence of recognized “environmental conditions” as such term is defined in ASTM E1527-05 or its successor (the “Environmental Conditions”) at the related Underlying Mortgaged Property or the need for further investigation with respect to any Environmental Condition that was identified, or (ii) if the existence of an Environmental Condition or need for further investigation was indicated in any such ESA, then at least one of the following statements is true: (A) an amount reasonably estimated by a reputable environmental consultant to be sufficient to cover the estimated cost to cure any material noncompliance with applicable environmental laws or the Environmental Condition has been escrowed by the related Mortgagor and is held or controlled by the related lender; (B) if the only Environmental Condition relates to the presence of asbestos-containing materials, radon in indoor air, lead based paint or lead in drinking water, and the only recommended action in the ESA is the institution of such a plan, an operations or maintenance plan has been required to be instituted by the related Mortgagor that can reasonably be expected to mitigate the identified risk; (C) the Environmental Condition identified in the related environmental report was remediated or abated in all material respects prior to the date hereof, and, if and as appropriate, a no further action or closure letter was obtained from the applicable governmental regulatory authority (or the Environmental Condition affecting the related Underlying Mortgaged Property was otherwise listed by such governmental authority as

“closed” or a reputable environmental consultant has concluded that no further action is required); (D) a secured creditor environmental policy or a pollution legal liability insurance policy that covers liability for the Environmental Condition was obtained from an insurer rated no less than “A-” (or the equivalent) by Moody’s, Standard & Poor’s and/or Fitch, Inc.; (E) a party not related to the Mortgagor was identified as the responsible party for such Environmental Condition and such responsible party has financial resources reasonably estimated to be adequate to address the situation; or (F) a party related to the Mortgagor having financial resources reasonably estimated to be adequate to address the situation is required to take action. To Seller’s knowledge, except as set forth in the ESA, there is no Environmental Condition (as such term is defined in ASTM E1527-05 or its successor) at the related Underlying Mortgaged Property.

In the case of each Purchased Asset with respect to which there is an environmental insurance policy (the “Environmental Insurance Policy”), (i) such Environmental Insurance Policy has been issued by the issuer set forth in the related Exception Report (the “Policy Issuer”) and is effective as of the Purchase Date, (ii) as of origination and to Seller’s knowledge as of the Purchase Date the Environmental Insurance Policy is in full force and effect, there is no deductible and Seller is a named insured under such policy, (iii) (A) a property condition or engineering report was prepared, if the related Underlying Mortgaged Property was constructed prior to 1985, with respect to asbestos-containing materials (“ACM”) and, if the related Underlying Mortgaged Property is a multifamily property, with respect to radon gas (“RG”) and lead-based paint (“LBP”), and (B) if such report disclosed the existence of a material and adverse LBP, ACM or RG environmental condition or circumstance affecting the related Underlying Mortgaged Property, the related Mortgagor (1) was required to remediate the identified condition prior to closing the Purchased Asset or provide additional security or establish with the mortgagee a reserve in an amount deemed to be sufficient by Seller, for the remediation of the problem, and/or (2) agreed in the Purchased Asset Documents to establish an operations and maintenance plan after the closing of the Purchased Asset that should reasonably be expected to mitigate the environmental risk related to the identified LBP, ACM or RG condition, (iv) on the effective date of the Environmental Insurance Policy, Seller as originator had no knowledge of any material and adverse environmental condition or circumstance affecting the Underlying Mortgaged Property (other than the existence of LBP, ACM or RG) that was not disclosed to the Policy Issuer in one or more of the following: (A) the application for insurance, (B) a Mortgagor questionnaire that was provided to the Policy Issuer, or (C) an engineering or other report provided to the Policy Issuer, and (v) the premium of any Environmental Insurance Policy has been paid through the maturity of the policy’s term and the term of such policy extends at least five years beyond the maturity of the Purchased Asset.

(42)Lease Estoppels. With respect to each Purchased Asset secured by retail, office or industrial properties, Seller requested the related Mortgagor to obtain estoppels from each commercial tenant with respect to the rent roll delivered as of the origination date. With respect to each Purchased Asset predominantly secured by a retail, office or industrial property leased to a single tenant, Seller reviewed such estoppel obtained from such tenant no earlier than 90 days prior to the origination date of the related Purchased Asset, and to Seller’s knowledge, (i) the related lease is in full force and effect and (ii) there exists no default under such lease, either by the lessee thereunder or by the lessor subject, in each case, to customary reservations of tenant’s rights, such as with respect to common area maintenance (“CAM”) and pass-through audits and verification of landlord’s compliance with co-tenancy provisions. With respect to each Purchased Asset predominantly secured by a retail, office or industrial property, Seller has received lease estoppels executed within 90 days of the origination date of the related Purchased Asset that collectively account for at least 65% of the in-place base rent for the Underlying

Mortgaged Property that secure a Purchased Asset that is represented as of the origination date. To Seller’s knowledge, (i) each lease represented on the rent roll delivered as of the origination date is in full force and effect and (ii) there exists no material default under any such related lease that represents 20% or more of the in-place base rent for the Underlying Mortgaged Property either by the lessee thereunder or by the related Mortgagor, subject, in each case, to customary reservations of tenant’s rights, such as with respect to CAM and pass-through audits and verification of landlord’s compliance with co-tenancy provisions.

(43)Appraisal. The Purchased Asset File contains an appraisal of the related Underlying Mortgaged Property with an appraisal date within six months of the Purchased Asset origination date, and within 12 months of the Purchase Date. The appraisal is signed by an appraiser who is a Member of the Appraisal Institute. Each appraiser has represented in such appraisal or in a supplemental letter that the appraisal satisfies the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation and has certified that such appraiser had no interest, direct or indirect, in the Underlying Mortgaged Property or the borrower or in any loan made on the security thereof, and its compensation is not affected by the approval or disapproval of the Purchased Asset.

(44)Purchased Asset Schedule. The information pertaining to each Purchased Asset which is set forth in the Purchased Asset Schedule is true and correct in all material respects as of the Purchase Date and contains all information required by the Repurchase Agreement to be contained therein.

(45)Cross-Collateralization. No Purchased Asset is cross-collateralized or cross-defaulted with any other mortgage loan.

(46)Advance of Funds by Seller. After origination, no advance of funds has been made by Seller to the related Mortgagor other than in accordance with the Purchased Asset Documents, and, to Seller’s knowledge, no funds have been received from any person other than the related Mortgagor or an affiliate for, or on account of, payments due on the Purchased Asset (other than as contemplated by the Purchased Asset Documents, such as, by way of example and not in limitation of the foregoing, amounts paid by the tenant(s) into a lender-controlled lockbox if required or contemplated under the related lease or Purchased Asset Documents). Neither Seller nor any affiliate thereof has any obligation to make any capital contribution to any Mortgagor under a Purchased Asset, other than contributions made on or prior to the date hereof.

(47)Compliance with Anti-Money Laundering Laws. Seller has complied in all material respects with the Prescribed Laws. Seller has established an anti-money laundering compliance program as required by the Prescribed Laws, has conducted the requisite due diligence in connection with the origination of the Purchased Asset for purposes of the Prescribed Laws, including with respect to the legitimacy of the applicable Mortgagor and the origin of the assets used by the said Mortgagor to purchase the property in question, and maintains, and will maintain, sufficient information to identify the applicable Mortgagor for purposes of the Prescribed Laws.

(48)OFAC. (a) No Purchased Asset is (i) subject to nullification pursuant to Executive Order 13224 or the regulations promulgated by OFAC (the “OFAC Regulations”) or (ii) in violation of Executive Order 13224 or the OFAC Regulations, and (b) no Mortgagor is (i) subject to the provisions of Executive Order 13224 or the OFAC Regulations or (ii) listed as a “blocked person” for purposes of the OFAC Regulations.

(49)Floating Interest Rates. Each Purchased Asset bears interest at a floating rate of interest that is based on Term SOFR plus a margin (which interest rate may be subject to a minimum or “floor” rate).

(50)Prior Asset Pledges/Sales. No Purchased Asset has been pledged as collateral to any lender in connection with any loan or sold to any buyer in connection with a repurchase or other facility.

EXHIBIT V-B

REPRESENTATIONS AND WARRANTIES
REGARDING EACH INDIVIDUAL PURCHASED ASSET THAT IS
A MEZZANINE LOAN

(1)The representations and warranties set forth in this Exhibit V regarding Senior Mortgage Loans shall be deemed incorporated herein in respect of each Senior Mortgage Loan related to the Purchased Asset.

(2)The Mezzanine Loan is a performing mezzanine loan secured by a pledge of all of the capital stock of a Mortgagor that owns income producing commercial real estate (a “Property Owner”).

(3)As of the Purchase Date, such Mezzanine Loan and the Senior Mortgage Loan related thereto complies in all material respects with, or is exempt from, all requirements of federal, state or local law relating to such Mezzanine Loan and Senior Mortgage Loan.

(4)Immediately prior to the sale, transfer and assignment to Buyer thereof, (i) Seller had good and marketable title to, and was the sole owner and holder of, such Mezzanine Loan, (ii) Seller had full right, power and authority to transfer, and is transferring, such Mezzanine Loan free and clear of any and all liens, pledges, encumbrances, charges, security interests or any other ownership interests of any nature encumbering such Mezzanine Loan, and (iii) other than consents and approvals obtained as of the related Purchase Date or those already granted in the documentation governing such Mezzanine Loan, no consent, approval or authorization of any Person is required for any such transfer or assignment by the holder of such Mezzanine Loan. No third party holds any “right of first refusal”, “right of first negotiation”, “right of first offer”, purchase option, or other similar rights of any kind, and no other impediment exists to any such transfer or exercise of rights or remedies. Upon consummation of the purchase contemplated to occur in respect of such Mezzanine Loan on the Purchase Date therefor, Seller will have validly and effectively conveyed to Buyer all legal and beneficial interest in and to such Mezzanine Loan free and clear of any pledge, lien, encumbrance or security interest.

(5)No fraudulent acts were committed by Seller in connection with its acquisition or origination of such Mezzanine Loan nor were any fraudulent acts committed by any Person in connection with the origination of such Mezzanine Loan.

(6)All information contained in the related Due Diligence Package (or as otherwise provided to Buyer) and set forth on the Purchased Asset Schedule in respect of such Mezzanine Loan and the Senior Mortgage Loan related thereto is accurate and complete in all material respects. Seller has delivered to Buyer a true, correct and complete copy of all related Purchased Asset Documents, which have not been amended, modified, supplemented or restated since the related date of origination.

(7)Except as included in the Purchased Asset File, Seller is not a party to any document, instrument or agreement, and there is no document, that by its terms modifies or affects the rights and obligations of any holder of such Mezzanine Loan or the related Senior Mortgage Loan and Seller has not consented to any material change or waiver to any term or provision of any such document, instrument or agreement and no such change or waiver exists.

(8)Such Mezzanine Loan and the related Senior Mortgage Loan is presently outstanding, the proceeds thereof have been fully and properly disbursed and, except for amounts held in escrow by Seller, there is no requirement for any future advances thereunder.

(9)The Mezzanine Loan is secured by a pledge of equity ownership interests in the related borrower under the Senior Mortgage Loan or a direct or indirect owner of the related borrower and the security interest created thereby has been fully perfected in favor of Seller as mezzanine lender under the Mezzanine Loan.

(10)As of the origination date, the Underlying Obligor has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization, with requisite power and authority to own its assets and to transact the business in which it is now engaged, the sole purpose of the Underlying Obligor under its organizational documents is to own, finance, sell or otherwise manage the related Underlying Mortgaged Property and to engage in any and all activities related or incidental thereto, and the Underlying Mortgaged Property (or the capital stock of the Property Owner) and assets related thereto constitute the sole assets of the Underlying Obligor.

(11)The Underlying Obligor has good and marketable title to the related Underlying Mortgaged Property, subject to any Permitted Exceptions; no claims under the title policies insuring the Underlying Obligor’s title to the Properties have been made.

(12)The Mezzanine Loan Documents provide for the acceleration of the payment of the unpaid principal balance of the Mezzanine Loan if (i) the Mezzanine Borrower voluntarily transfers or encumbers all or any portion of any related Mezzanine Collateral (as hereinafter defined), or (ii) any direct or indirect interest in the Mezzanine Borrower is voluntarily transferred or assigned, other than, in each case, as permitted under the terms and conditions of the related loan documents.

(13)Pursuant to the terms of the Mezzanine Loan Documents: (a) no material terms of any related Senior Mortgage Loan may be waived, canceled, subordinated or modified in any material respect and no material portion of such Mortgage or the Underlying Mortgaged Property may be released without the consent of the holder of the Mezzanine Loan; (b) no material action may be taken by the Underlying Obligor with respect to the Underlying Obligor without the consent of the holder of the Mezzanine Loan; (c) the holder of the Mezzanine Loan is entitled to approve the budget of the Underlying Obligor as it relates to the Underlying Mortgaged Property; and (d) the holder of the Mezzanine Loan’s consent is required prior to the Underlying Obligor incurring any additional indebtedness.

(14)There is no default with respect to the payment of principal and/or interest that has existed for more than ten (10) days. There is no other material default under any of the related Purchased Asset Documents, after giving effect to any applicable notice and/or grace period; no such material default or breach has been waived in writing by Seller or on its behalf or, by Seller’s predecessors in interest with respect to the Purchased Asset. No event has occurred that, with the passing of time or giving of notice would constitute a material default under the related Purchased Asset Documents. No Purchased Asset has been accelerated and no foreclosure or power of sale proceeding has been initiated in respect of the related pledge agreement or similar security agreement entered into in connection with such Mezzanine Loan. Seller has not waived in writing any material claims against the related Mezzanine Borrower under any non-recourse exceptions contained in the related Mezzanine Note.

(15)Seller’s security interest in the Mezzanine Loan is covered by a UCC-9 insurance policy (the “UCC-9 Policy”) in the maximum principal amount of the Mezzanine Loan insuring

that the related pledge is a valid first priority lien on the collateral pledged in respect of such Mezzanine Loan (the “Mezzanine Collateral”), subject only to the exceptions stated therein (or a pro forma title policy or marked up title insurance commitment on which the required premium has been paid exists which evidences that such UCC-9 Policy will be issued), then such UCC-9 Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, Seller has not done, by act or omission, anything that would materially impair the coverage under the UCC-9 Policy and as of the Purchase Date, the UCC-9 Policy (or, if it has yet to be issued, the coverage to be provided thereby) will inure to the benefit of Seller and its successors and assigns without the consent of (but upon notice to) the insurer.

(16)Seller has delivered to Buyer or its designee the original promissory note made in respect of such Mezzanine Loan, together with an original assignment thereof executed by Seller in blank.

(17)Seller has not received any written notice of any setoff, right of recoupment, defense, counterclaim or impairment of any kind from the Mezzanine Borrower.

(18)The servicing and collection practices used by the servicer of the Mezzanine Loan have complied with applicable law in all material respects and are consistent with those employed by prudent institutional commercial mezzanine lenders.

(19)All real estate taxes and governmental assessments, or installments thereof, which would be a lien on any related Underlying Mortgaged Property and that prior to the Purchase Date for the related Purchased Asset have become delinquent in respect of such Underlying Mortgaged Property have been paid, or an escrow of funds in an amount sufficient to cover such payments has been established with the mortgagee. For purposes of this representation and warranty, real estate taxes and governmental assessments and installments thereof shall not be considered delinquent until the earlier of (a) the date on which interest and/or penalties would first be payable thereon and (b) the date on which enforcement action is entitled to be taken by the related taxing authority.

(20)Seller inspected or caused to be inspected each related Underlying Mortgaged Property within twelve (12) months of the related Purchase Date. An engineering report or property condition assessment was prepared in connection with the origination of the related Senior Mortgage Loan and, if applicable, Junior Mortgage Loan in connection each Purchased Asset no more than twelve (12) months prior to the related Purchase Date. There exists no material damage to any related Underlying Mortgaged Property that would have a material adverse effect on the value of such Underlying Mortgaged Property as security for the related Purchased Asset other than those disclosed in the engineering report or property condition assessment.

(21)The fire and casualty insurance policy covering the related Underlying Mortgaged Property (i) affords (and will afford) sufficient insurance against fire and other risks as are usually insured against in the broad form of extended coverage insurance from time-to-time available, as well as insurance against flood hazards if the related Underlying Mortgaged Property is located in an area identified by FEMA as having special flood hazards, (ii) is a standard policy of insurance for the locale where the related Underlying Mortgaged Property is located, is in full force and effect, and the amount of the insurance is in the amount of the full insurable value of the related Underlying Mortgaged Property on a replacement cost basis or the unpaid balance of the related Senior Mortgage Loan and, if applicable, Junior Mortgage Loan, whichever is less, (iii) names (and will name) the present owner of the related Underlying Mortgaged Property as the insured, and (iv) contains a standard mortgagee loss payable clause in favor of Seller.

(22)An Environmental Site Assessment relating to each related Underlying Mortgaged Property and prepared no earlier than 12 months prior to the Purchase Date was obtained and reviewed by Seller in connection with the origination of such Purchased Asset and a copy is included in the Purchased Asset File.

(23)Except as may be set forth in the Environmental Site Assessment in connection with the related Underlying Mortgaged Property, there are no adverse circumstances or conditions with respect to or affecting the Underlying Mortgaged Property that would constitute or result in a material violation of any Environmental Laws, other than with respect to an Underlying Mortgaged Property (i) for which environmental insurance is maintained, or (ii) that would require (x) any expenditure less than or equal to 5% of the outstanding principal balance of the Mortgage Loan to achieve or maintain compliance in all material respects with any Environmental Laws or (y) any expenditure greater than 5% of the outstanding principal balance of such Purchased Asset to achieve or maintain compliance in all material respects with any Environmental Laws for which, in connection with this clause (y), adequate sums, but in no event less than 125% of the estimated cost as set forth in the Environmental Site Assessment, were reserved in connection with the origination of the Purchased Asset and for which the related Mortgagor has covenanted to perform, or (iii) as to which the related Mortgagor or one of its affiliates is currently taking or required to take such actions, if any, with respect to such conditions or circumstances as have been recommended by the Environmental Site Assessment or required by the applicable Governmental Authority, or (iv) as to which another responsible party not related to the Mortgagor with assets reasonably estimated by Seller at the time of origination to be sufficient to effect all necessary or required remediation identified in a notice or other action from the applicable Governmental Authority is currently taking or required to take such actions, if any, with respect to such regulatory authority’s order or directive, or (v) as to which the conditions or circumstances identified in the Environmental Site Assessment were investigated further and based upon such additional investigation, an environmental consultant recommended no further investigation or remediation, or (vi) as to which a party with financial resources reasonably estimated to be adequate to cure the condition or circumstance that would give rise to such material violation provided a guarantee or indemnity to the related Mortgagor or to the mortgagee to cover the costs of any required investigation, testing, monitoring or remediation, or (vii) as to which the related Mortgagor or other responsible party obtained a “No Further Action” letter or other evidence reasonably acceptable to a prudent commercial mortgage lender that applicable federal, state, or local Governmental Authorities had no current intention of taking any action, and are not requiring any action, in respect of such condition or circumstance, or (viii) that would not require substantial cleanup, remedial action or other extraordinary response under any Environmental Laws reasonably estimated to cost in excess of 5% of the outstanding principal balance of such Purchased Asset.

(24)No borrower under the Mezzanine Loan nor any Mortgagor under any Mortgage Loan is a debtor in any state or federal bankruptcy or insolvency proceeding.

(25)The related Underlying Mortgaged Property is in compliance with, and is used and occupied in accordance with, all restrictive covenants of record applicable to such Underlying Mortgaged Property and applicable zoning laws and all inspections, licenses, permits and certificates of occupancy required by law, ordinance or regulation to be made or issued with regard to the Underlying Mortgaged Property have been obtained and are in full force and effect, except to the extent (a) any material non-compliance with applicable zoning laws is insured by an ALTA lender’s title insurance policy (or binding commitment therefor), or the equivalent as adopted in the applicable jurisdiction, or a law and ordinance insurance policy, or (b) the failure to obtain or maintain such inspections,

licenses, permits or certificates of occupancy does not materially impair or materially and adversely affect the use and/or operation of the Underlying Mortgaged Property as it was used and operated as of the date of origination of the Purchased Asset or the rights of a holder of the related Purchased Asset. The Mezzanine Loan Documents and the Mortgage Loan documents require the related Underlying Mortgaged Property to comply with all applicable laws and ordinances.

(26)As of the Purchase Date for the related Purchased Asset, there was no pending action, suit or proceeding, or governmental investigation against Seller, the Mezzanine Borrower, Underlying Obligor or the related Underlying Mortgaged Property the adverse outcome of which could reasonably be expected to materially and adversely affect the Mezzanine Loan or the Underlying Mortgaged Property.

(27)Except for Mortgagors under a Senior Mortgage Loan or Junior Mortgage Loan, the Underlying Mortgaged Property with respect to which includes a Ground Lease, the related Mortgagor (or its affiliate) has title in the fee simple interest in each related Underlying Mortgaged Property.

(28)The related Underlying Mortgaged Property is not encumbered, and none of the Mezzanine Loan Documents or any Mortgage Loan documents permits the related Underlying Mortgaged Property to be encumbered subsequent to the Purchase Date of the related Purchased Asset without the prior written consent of the holder thereof, by any lien securing the payment of money junior to or of equal priority with, or superior to, the lien of the related Mortgage (other than Permitted Encumbrances).

(29)Each related Underlying Mortgaged Property constitutes one or more complete separate tax lots (or the related Mortgagor has covenanted to obtain separate tax lots and a Person has indemnified the Mortgagee for any loss suffered in connection therewith or an escrow of funds in an amount sufficient to pay taxes resulting from a breach thereof has been established) or is subject to an endorsement under the related title insurance policy.

(30)An appraisal of the related Underlying Mortgaged Property was conducted in connection with the origination of the Mezzanine Loan; and such appraisal satisfied either (A) the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation, or (B) the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act or 1989, in either case as in effect on the date such Mezzanine Loan was originated.

(31)With respect to each related Underlying Mortgaged Property consisting of a Ground Lease, Seller represents and warrants the following with respect to the related Ground Lease:

(i)Such Ground Lease or a memorandum thereof has been or will be duly recorded no later than thirty (30) days after the Purchase Date of the related Purchased Asset and such Ground Lease permits the interest of the lessee thereunder to be encumbered by the related Mortgage or, if consent of the lessor thereunder is required, it has been obtained prior to the Purchase Date.

(ii)Upon the foreclosure of the Senior Mortgage Loan (or acceptance of a deed in lieu thereof), the Mortgagor’s interest in such Ground Lease is assignable to the Mortgagee under the leasehold estate and its assigns without the consent of the lessor thereunder (or, if any such consent is required, it has been obtained prior to the Purchase Date).

(iii)Such Ground Lease may not be amended, modified, canceled or terminated without the prior written consent of the Mortgagee and any such action without such consent is not binding on the Mortgagee, its successors or assigns, except termination or cancellation if (i) an event of default occurs under the Ground Lease, (ii) notice thereof is provided to the Mortgagee and (iii) such default is curable by the Mortgagee as provided in the Ground Lease but remains uncured beyond the applicable cure period.

(iv)Such Ground Lease is in full force and effect, there is no material default under such Ground Lease, and there is no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default under such Ground Lease.

(v)The Ground Lease or ancillary agreement between the lessor and the lessee requires the lessor to give notice of any default by the lessee to the Mortgagee. The Ground Lease or ancillary agreement further provides that no notice given is effective against the Mortgagee unless a copy has been given to the Mortgagee in a manner described in the Ground Lease or ancillary agreement.

(vi)The Ground Lease (i) is not subject to any liens or encumbrances superior to, or of equal priority with, the Mortgage, subject, however, to only the Title Exceptions or (ii) is subject to a subordination, non-disturbance and attornment agreement to which the Mortgagee on the lessor’s fee interest in the Underlying Mortgaged Property is subject.

(vii)A Mortgagee is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the Ground Lease) to cure any curable default under such Ground Lease before the lessor thereunder may terminate such Ground Lease.

(viii)Such Ground Lease has an original term (together with any extension options, whether or not currently exercised, set forth therein all of which can be exercised by the Mortgagee if the Mortgagee acquires the lessee’s rights under the Ground Lease) that extends not less than 20 years beyond the stated maturity date.

(ix)Under the terms of such Ground Lease, any estoppel or consent letter received by the Mortgagee from the lessor, and the related Mortgage, taken together, any related insurance proceeds or condemnation award (other than in respect of a total or substantially total loss or taking) will be applied either to the repair or restoration of all or part of the related Underlying Mortgaged Property, with the Mortgagee or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses, or to the payment or defeasance of the outstanding principal balance of the Senior Mortgage Loan, together with any accrued interest (except in cases where a different allocation would not be viewed as commercially unreasonable by any commercial mortgage lender, taking into account the relative duration of the Ground Lease and the related Mortgage and the ratio of the market value of the related Underlying Mortgaged Property to the outstanding principal balance of such Senior Mortgage Loan).

(x)The ground lessor under such Ground Lease is required to enter into a new lease upon termination of the Ground Lease for any reason, including the rejection of the Ground Lease in bankruptcy.

(32)The Senior Mortgage Loan to which the Purchased Asset relates is also a Purchased Asset.

EXHIBIT VI

ADVANCE PROCEDURES

(a)Submission of Due Diligence Package. Seller shall deliver to Buyer a due diligence package for Buyer’s review and approval, which shall contain the following items (the “Due Diligence Package”):

1Delivery of Purchased Asset Documents. With respect to a New Asset that is a Pre-Existing Asset, each of the Purchased Asset Documents.

2Transaction-Specific Due Diligence Materials. With respect to any New Asset, a summary memorandum outlining the proposed transaction, including potential transaction benefits and all material underwriting risks, all Underwriting Issues and all other characteristics of the proposed transaction that a reasonable lender would consider material, together with the following due diligence information relating to the New Asset:

A. With respect to each Eligible Asset:

(i)a current rent roll and roll over schedule, if applicable;

(ii)a cash flow pro forma, plus historical operating statements, if available;

(iii)flood certification (or the equivalent in the applicable jurisdiction);

(iv)if available, maps and photos;

(v)copies of valuation, environmental, engineering, insurance and any other third party reports; provided, that, if same are not available to Seller at the time of Seller’s submission of the Due Diligence Package to Buyer, Seller shall deliver such items to Buyer promptly upon Seller’s receipt of such items;

(vi)a description of the underlying real estate directly or indirectly securing or supporting such Purchased Asset and the ownership structure of the borrower and the sponsor;

(vii)indicative debt service coverage ratios;

(viii)indicative loan-to-value ratios;

(ix)indicative debt yield ratios;

(x)a term sheet outlining the transaction generally;

(xi)a description of the Mortgagor, including experience with other projects (real estate owned), its ownership structure and financial statements;

(xii)a description of Seller’s relationship with the Mortgagor, if any;

(xiii)copies of documents evidencing such New Asset, or current drafts thereof, including, without limitation, underlying debt and security documents, guaranties, the underlying borrower’s and guarantor’s organizational documents, warrant agreements, and loan and collateral pledge agreements, as applicable, provided that, if same are not available to Seller at the time of Seller’s submission

of the Due Diligence Package to Buyer, Seller shall deliver such items to Buyer promptly upon Seller’s receipt of such items;

(xiv)any exceptions to the representations and warranties set forth in Exhibit V to this Agreement.

3Environmental and Engineering. A “Phase 1” (and, if applicable, “Phase 2”) environmental report, an asbestos survey, if applicable, and an engineering report, each in form reasonably satisfactory to Buyer, by an engineer or environmental consultant reasonably approved by Buyer.

4Credit Memorandum. Copies of all internal credit analysis, including, without limitation, investment committee memoranda, credit memoranda, asset summaries or other similar documents that detail, among other things, cash flow, underwriting, historical operating numbers, underwriting footnotes, rent roll and lease rollover schedule.

5Appraisal. An Appraisal acceptable to Buyer, which Appraisal shall be dated less than one hundred eighty (180) days prior to the proposed Purchase Date.

6Opinions of Counsel. Opinion letters to Seller and its successors and assigns from counsels to Seller and the underlying obligor, as applicable, on the underlying loan transaction, as to enforceability of the loan documents governing such transaction and such other matters as Buyer shall require (including, without limitation, opinions as to due formation, authority, choice of law, and perfection of security interests).

7Additional Real Estate Matters. To the extent obtained by Seller from the Mortgagor relating to any Eligible Asset at the origination of the Eligible Asset, such other real estate related certificates and documentation as may have been requested by Buyer.

8Other Documents. Any other documents as Buyer or its counsel shall reasonably deem necessary.

(b)Submission of Legal Documents. With respect to a New Asset that is an Originated Asset, no less than seven (7) calendar days (or such other time as may be mutually acceptable to Buyer and Seller) prior to the proposed Purchase Date, Seller shall deliver, or cause to be delivered, to counsel for Buyer the following items, where applicable:

1Copies of all draft Purchased Asset Documents in substantially final form, blacklined against the approved form Purchased Asset Documents.

2Certificates or other evidence of insurance demonstrating insurance coverage in respect of the underlying real estate directly or indirectly securing or supporting such Purchased Asset, if applicable, of types, in amounts, with insurers and otherwise in compliance with the terms, provisions and conditions set forth in the Purchased Asset Documents, in each case satisfactory to Buyer.

3All surveys of the underlying real estate directly or indirectly securing or supporting such Purchased Asset that are in Seller’s possession.

4As reasonably requested by Buyer, satisfactory reports of tax lien, judgment and litigation searches and other searches customarily required in the relevant jurisdiction, conducted by search firms which are reasonably acceptable to Buyer with respect to the Eligible Asset, underlying real estate directly or indirectly securing or supporting such Eligible Asset, Seller and Mortgagor, such searches to be conducted in each location Buyer shall reasonably designate.

5Certifications that the property is in compliance with all applicable licensing and zoning laws, each issued by the appropriate Governmental Authority.

(c)Approval of Eligible Asset. Conditioned upon the timely and satisfactory completion of Seller’s requirements in clauses (a) and (b) above, Buyer shall (1) notify Seller in writing (which may take the form of electronic mail format) that Buyer has not approved the proposed Eligible Asset as a Purchased Asset or (2) notify Seller in writing (which may take the form of electronic mail format) that Buyer has approved the proposed Eligible Asset as a Purchased Asset.

(d)Assignment Documents. Seller shall have executed and delivered to Buyer, in form and substance reasonably satisfactory to Buyer and its counsel, all applicable assignment documents executed in blank with respect to the proposed Eligible Asset that shall be subject to no liens except as expressly permitted by Buyer. Each of the assignment documents shall contain such representations and warranties in writing concerning the proposed Eligible Asset and such other terms as shall be satisfactory to Buyer in its sole discretion, and shall include blacklined copies of each document, showing all changes made to the forms of assignment documents that have been approved in advance by Buyer.

EXHIBIT VII

FORM OF MARGIN DEFICIT NOTICE

[DATE]

VIA ELECTRONIC TRANSMISSION

[_______________________]

[    ]
[    ]
[    ]
Attention:    [    ]

Re:    Uncommitted Master Repurchase and Securities Contract Agreement, dated as of February 18, 2022 (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase and Securities Contract Agreement”; capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Master Repurchase and Securities Contract Agreement) by and between GOLDMAN SACHS BANK USA, a New York state-chartered bank (“Buyer”), and TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company (“Seller”).

Pursuant to Article 4(a) of the Master Repurchase and Securities Contract Agreement, Buyer hereby notifies Seller of the existence of a Margin Deficit as of the date hereof as follows:

Purchase Price for certain Purchased Asset:    $

Margin Deficit Event (check as applicable):

◦Decline in Market Value by twenty percent (20%) or more from par (related Purchased Asset and calculation as follows):

◦Purchase Price Debt Yield is less than Minimum Purchase Price Debt Yield (related Purchased Asset and calculation as follows):

◦Buyer’s LTV is equal to or greater than the Maximum Buyer’s LTV (related Purchased Asset and calculation as follows):

MARGIN DEFICIT:    $
Accrued Price Differential from [ ] to [ ]:    $
TOTAL WIRE DUE:    $

SELLER IS REQUIRED TO CURE THE MARGIN DEFICIT SPECIFIED ABOVE IN ACCORDANCE WITH THE UNCOMMITTED MASTER REPURCHASE AND SECURITIES CONTRACT AGREEMENT AND WITHIN THE TIME PERIOD SPECIFIED ARTICLE 4(A) THEREOF.

X-1

GOLDMAN SACHS BANK USA, a New York state-chartered bank

By:     
Name:
Title:

X-2

EXHIBIT VIII

EXHIBIT VIII-A

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Assignees That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to Article 14(k) of the Uncommitted Master Repurchase and Securities Contract Agreement, dated as of February 18, 2022 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Master Repurchase and Securities Contract Agreement”), by and between GOLDMAN SACHS BANK USA, a New York state-chartered bank, as Buyer, and TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company, as Seller. Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Master Repurchase and Securities Contract Agreement.

The undersigned hereby certifies that (i) it is the sole record and beneficial owner of the ownership interest in the Transaction(s) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the applicable Seller(s) within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the applicable Seller(s) as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the applicable Seller(s) with a correct, complete, and accurate executed IRS Form W-8BEN or W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the applicable Seller(s), and (2) the undersigned shall have at all times furnished the applicable Seller(s) with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

[NAME OF ASSIGNEE]

By:
Name:
Title:

Date: , 20[]

X-3

EXHIBIT VIII -B

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to Article 14(k) of the Uncommitted Master Repurchase and Securities Contract Agreement, dated as of February 18, 2022 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Master Repurchase and Securities Contract Agreement”), by and between GOLDMAN SACHS BANK USA, a New York state-chartered bank, as Buyer, and TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company, as Seller. Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Master Repurchase and Securities Contract Agreement.

The undersigned hereby certifies that (i) it is the sole record and beneficial owner of the ownership interest in the Transaction(s) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the applicable Seller(s) within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the applicable Seller(s) as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the applicable Buyer or Assignee with a correct, complete, and accurate executed IRS Form W-8BEN or W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Buyer or Assignee in writing, and (2) the undersigned shall have at all times furnished such Buyer or Assignee with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

[NAME OF ASSIGNEE]

By:
Name:
Title:

Date: , 20[]

X-4

EXHIBIT VIII-C

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to Article 14(k) of the Uncommitted Master Repurchase and Securities Contract Agreement, dated as of February 18, 2022 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Master Repurchase and Securities Agreement”), by and between GOLDMAN SACHS BANK USA, a New York state-chartered bank, as Buyer, and TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company, as Seller. Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Master Repurchase and Securities Contract Agreement.

The undersigned hereby certifies that (i) it is the sole record owner of the ownership interest in the Transaction(s) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such interest, (iii) with respect such interest, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the applicable Seller(s) within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the applicable Seller(s) as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the applicable Buyer or Assignee with a correct, complete, and accurate executed IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Buyer or Assignee and (2) the undersigned shall have at all times furnished such Buyer or Assignee with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

[NAME OF ASSIGNEE]

By:
Name:
Title:

Date: , 20[]

X-5

EXHIBIT VIII-D

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Assignees That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to Article 14(k) of the Uncommitted Master Repurchase and Securities Contract Agreement, dated as of February 18, 2022 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Master Repurchase and Securities Contract Agreement”), by and between GOLDMAN SACHS BANK USA, a New York state-chartered bank, as Buyer, and TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company, as Seller. Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Master Repurchase and Securities Contract Agreement.

The undersigned hereby certifies that (i) it is the sole record owner of the ownership interest in the Transaction(s) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such interest, (iii) with respect to such interest, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the applicable Seller(s) within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the applicable Seller(s) as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the applicable Seller(s) with a correct, complete, and accurate executed IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the applicable Seller(s), and (2) the undersigned shall have at all times furnished the applicable Seller(s) with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

[NAME OF ASSIGNEE]

By:
Name:
Title:

Date: , 20[]

X-6

EXHIBIT VII

FORM OF COVENANT COMPLIANCE CERTIFICATE

[ ] [ ], 20[ ]

GOLDMAN SACHS BANK USA
200 West Street
New York, New York 10282
Attention:    Mr. Jeffrey Dawkins

This Covenant Compliance Certificate is furnished pursuant to that certain Uncommitted Master Repurchase and Securities Contract Agreement, dated as of February 18, 2022, by and between GOLDMAN SACHS BANK USA, a New York state-chartered bank (“Buyer”),and TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company (“Seller”) (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase and Securities Contract Agreement”). Unless otherwise defined herein, capitalized terms used in this Covenant Compliance Certificate have the respective meanings ascribed thereto in the Master Repurchase and Securities Contract Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1I am a duly elected Responsible Officer.

2All of the financial statements, calculations and other information set forth in this Covenant Compliance Certificate, including, without limitation, in any exhibit or other attachment hereto, are true, complete and correct as of the date hereof.

3I have reviewed the terms of the Master Repurchase and Securities Contract Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and financial condition of Seller during the accounting period covered by the financial statements attached (or most recently delivered to Buyer if none are attached).

4I am not aware of any facts, or pending developments that have caused, or may in the future cause the Market Value of any Purchased Asset to decline at any time within the reasonably foreseeable future.

5As of the date hereof, and since the date of the certificate most recently delivered pursuant to Article 11(x) of the Master Repurchase and Securities Contract Agreement, Seller has observed or performed in all material respects all of its covenants and other agreements, and satisfied in all material respects, every condition, contained in the Master Repurchase and Securities Contract Agreement and the related documents to be observed, performed or satisfied by it.

6The examinations described in Paragraph 3 above did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes an Event of Default or Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Covenant Compliance Certificate (including after giving effect to any pending Transactions requested to be entered into), except as set forth below.

7As of the date hereof, each of the representations and warranties made by Seller in the Master Repurchase and Securities Contract Agreement is true, correct and complete in all material respects with the same force and effect as if made on and as of the date hereof, except to the extent disclosed in a Requested Exceptions Report and except to the extent made as of a certain date.

8Attached as Exhibit 1 hereto is a description of all interests of Affiliates of Seller in any Underlying Mortgaged Property (including without limitation, any lien, encumbrance or other debt or equity position or other interest in the Underlying Mortgaged Property that is senior or junior to, or pan passu with, a Senior Mortgage Loan in right of payment or priority).

9Attached as Exhibit 2 hereto are the financial statements required to be delivered pursuant to Article 11 of the Master Repurchase and Securities Contract Agreement (or, if none are required to be delivered as of the date of this Covenant Compliance Certificate, the financial statements most recently delivered pursuant to Article 11 of the Master Repurchase and Securities Contract Agreement), which financial statements, to the best of my knowledge after due inquiry, fairly and accurately present in all material respects, the financial condition and operations of Seller as of the date or with respect to the period therein specified, determined in accordance with the requirements set forth in Article 11.

10Attached as Exhibit 3 hereto are the calculations demonstrating compliance with the financial covenants set forth in the Guarantee Agreement.

11As of the date hereof, all representations and warranties made on the applicable Purchase Date with respect to each Purchased Asset and as set forth on Exhibit V of the Master Repurchase and Securities Agreement remain true, complete and correct in all material respects except to the extent disclosed in a Requested Exceptions Report.

To the extent that Financial Statements are being delivered in connection with this Covenant Compliance Certificate, Seller hereby makes the following representations and warranties: (i) it is in compliance with all of the terms and conditions of the Master Repurchase and Securities Contract Agreement and (ii) it has no claim or offset against Buyer under the Transaction Documents.

To the best of my knowledge, Seller has, during the period since the delivery of the immediately preceding Covenant Compliance Certificate, observed or performed in all material respects all of its covenants and other agreements, and satisfied in all material respects every condition, contained in the Master Repurchase and Securities Contract Agreement and the related documents to be observed, performed or satisfied by it, and I have no knowledge of the occurrence during such period, or present existence, of any condition or event which constitutes an Event of Default or Default (including after giving effect to any pending Transactions requested to be entered into), except as set forth below.

Described below are the exceptions, if any, to the foregoing paragraphs, listing, in detail, the nature of the condition or event, the period during which it has existed and the action which Guarantor or Seller has taken, is taking, or proposes to take with respect to each such condition or event:

The foregoing certifications, together with the financial statements, updates, reports, materials, calculations and other information set forth in any exhibit or other attachment hereto, or otherwise covered by this Covenant Compliance Certificate, are made and delivered this [ ] day of [ ], 20[ ].

TERRA MORTGAGE CAPITAL I, LLC,
a Delaware limited liability company

By:
Name:
Title:

TERRA PROPERTY TRUST, INC.,
a Maryland corporation

By:
Name:
Title:

EXHIBIT X

UCC FILING JURISDICTIONS

Delaware

EXHIBIT XI

FORM OF SERVICER NOTICE
[DATE], 2022

[SERVICER]
[ADDRESS]
Attention:

Re:     Uncommitted Master Repurchase and Securities Contract Agreement, dated as of February 18, 2022 by and between GOLDMAN SACHS BANK USA, a New York state-chartered bank (“Buyer”) and TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company (“Seller”) (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase and Securities Contract Agreement”); (capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Master Repurchase and Securities Contract Agreement).

Ladies and Gentlemen:

[        ] (the “Servicer”) is servicing certain mortgage assets sold by Seller to Buyer pursuant to the Master Repurchase and Securities Contract Agreement (the “Purchased Assets”) pursuant to a servicing agreement dated as of February 18, 2022 between Servicer and Seller (the “Servicing Agreement”). Servicer is hereby notified that, pursuant to the Master Repurchase and Securities Contract Agreement, Seller has sold the Purchased Assets to Buyer on a servicing-released basis, and has granted a security interest to Buyer in the Purchased Assets.

In accordance with Seller’s requirements under the Master Repurchase and Securities Contract Agreement, Seller hereby notifies and instructs Servicer, and Servicer hereby agrees that Servicer shall (a) segregate all amounts collected on account of the Purchased Assets, (b) hold the Purchased Assets in trust for Buyer, (c) immediately following the receipt thereof by Servicer, deposit all collections of income to the collection account at [], ABA # [], Account #
[] and (d) in accordance with the terms of the Servicing Agreement, remit all such income (net of any deductions permitted under Section [    ] of the Servicing Agreement), to the Depository Account at [], ABA # [], Account # []. Upon receipt of a notice of Event of Default under the Master Repurchase and Securities Contract Agreement from Buyer, Servicer shall only follow the instructions of Buyer with respect to the Purchased Assets, and shall deliver to Buyer any information with respect to the Purchased Assets reasonably requested by Buyer.

Servicer hereby agrees that, notwithstanding any provision to the contrary in the Servicing Agreement or in any other agreement which exists between Servicer and Seller in respect of any Purchased Asset, (i) Servicer is servicing the Purchased Assets for the joint benefit of Seller and Buyer, (ii) Buyer is expressly intended to be a third-party beneficiary under the Servicing Agreement, and (iii) Buyer may, at any time after the occurrence and during the continuance of an Event of Default under the Master Repurchase and Securities Contract Agreement, terminate the Servicing Agreement and any other such agreement immediately upon the delivery of written notice thereof to Servicer and/or in any event transfer servicing to Buyer’s designee, at no cost or expense to Buyer, it being agreed that Seller will pay any and all fees required to terminate the Servicing Agreement and any other such agreement and to effectuate the transfer of servicing to the designee of Buyer in accordance with this Servicer Notice.

Notwithstanding any contrary information or direction which may be delivered to Servicer by Seller, Servicer may conclusively rely on any information, direction or notice of an Event of Default under the Master Repurchase and Securities Contract Agreement delivered by Buyer, and, so long as an Event of Default under the Master Repurchase and Securities Contract Agreement exists at such time, Seller shall indemnify and hold Servicer harmless for any and all claims asserted against Servicer for any actions taken in good faith by Servicer in connection with the delivery of such information, direction or notice of any such Event of Default.

No provision of this letter or any Servicing Agreement may be amended, countermanded or otherwise modified without the prior written consent of Buyer. Buyer is an intended third party beneficiary of this letter.

Please acknowledge receipt and your agreement to the terms of this instruction letter by signing in the signature block below and forwarding an executed copy to Buyer promptly upon receipt. Any notices to Buyer should be delivered to the following address: [        ].

Very truly yours,

GOLDMAN SACHS BANK USA, a New York state-chartered bank

By:     
Name:
Title:

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

ACKNOWLEDGED AND AGREED TO:

TERRA MORTGAGE CAPITAL I, LLC

By:
Name:
Title:

EXHIBIT XII

FORM OF RELEASE LETTER

[Date]

GOLDMAN SACHS BANK USA
200 West Street
New York, New York 10282
Attention:    Mr. Jeffrey Dawkins

Re:    Uncommitted Master Repurchase and Securities Contract Agreement, dated as of February 18, 2022 by and between GOLDMAN SACHS BANK USA, a New York state-chartered bank (“Buyer”) and TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company (“Seller”) (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase and Securities Contract Agreement”); (capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Master Repurchase and Securities Contract Agreement).

Ladies and Gentlemen:

With respect to the Purchased Assets described in the attached Schedule A (the “Purchased Assets”) (a) we hereby certify to you that the Purchased Assets are not subject to a lien of any third party, and (b) we hereby release all right, interest or claim of any kind other than any rights under the Master Repurchase and Securities Contract Agreement with respect to such Purchased Assets, such release to be effective automatically without further action by any party upon payment by Buyer of the amount of the Purchase Price contemplated under the Master Repurchase and Securities Contract Agreement (calculated in accordance with the terms thereof) in accordance with the wiring instructions set forth in the Master Repurchase and Securities Contract Agreement.

Very truly yours,

TERRA MORTGAGE CAPITAL I, LLC

By:     
Name:
Title:

Schedule A

[List of Purchased Asset Documents]

EXHIBIT XIII

Reserved.

EXHIBIT XIIV

FORM OF CUSTODIAL DELIVERY CERTIFICATE

On this of, 202_, a Delaware limited liability company (“Seller”) under that certain Uncommitted Master Repurchase and Securities Contract Agreement, dated as of February 18, 2022 (the “Repurchase Agreement”) between GOLDMAN SACHS BANK USA, a New York state-chartered bank (“Buyer”) and Seller, does hereby deliver to
[] (“Custodian”), as custodian under that certain Custodial Agreement, dated as of
[] (the “Custodial Agreement”), among Buyer, Custodian and Seller, the Purchased Asset Files with respect to the Purchased Assets to be purchased by Buyer pursuant to the Repurchase Agreement, which Purchased Assets are listed on the Purchased Asset Schedule attached hereto and which Purchased Assets shall be subject to the terms of the Custodial Agreement on the date hereof.

With respect to the Purchased Asset Files delivered hereby, for the purposes of issuing the Trust Receipt, Custodian shall review the Purchased Asset Files to ascertain delivery of the documents listed in Section [_] to the Custodial Agreement.

Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Custodial Agreement.

IN WITNESS WHEREOF, Seller has caused its name to be signed hereto by its officer thereunto duly authorized as of the day and year first above written.

TERRA MORTGAGE CAPITAL I, LLC

By:    
Name:
Title:

Purchased Asset Schedule to Custodial Delivery Certificate

Purchased Assets

EXHIBIT XV

FORM OF BAILEE LETTER

,20

Ladies and Gentlemen:

Reference is made to that certain Uncommitted Master Repurchase and Securities Contract Agreement, dated as of February 18, 2022 (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase and Securities Contract Agreement”; capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Master Repurchase and Securities Contract Agreement) by and between GOLDMAN SACHS BANK USA, a New York state-chartered bank (“Buyer”), and TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company (“Seller”).In consideration of the mutual promises set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller, Buyer and [] (the “Bailee”) hereby agree as follows:

(a)Seller shall deliver to the Bailee in connection with any Purchased Assets delivered to the Bailee hereunder, the Custodial Identification Certificate attached hereto as Attachment 1.

(b)On or prior to the date indicated on the Custodial Identification Certificate delivered by Seller (the “Funding Date”), Seller shall have delivered to the Bailee, as bailee for hire, the original documents set forth on Schedule A attached hereto (collectively, the “Purchased Asset File”) for each of the Purchased Assets (each a “Purchased Asset” and collectively, the “Purchased Assets”) listed in Exhibit A to Attachment 1 to Attachment attached thereto.

(c)The Bailee shall issue and deliver to Buyer and [    ] (the “Custodian”) on or prior to the Funding Date by electronic mail (a) in the name of Buyer, an initial trust receipt and certification in the form of Attachment 2 attached hereto (the “Bailee’s Trust Receipt and Certification”)which Bailee’s Trust Receipt and Certification shall state that the Bailee has received the documents comprising the Purchased Asset File as set forth in the Custodial Delivery Certificate.

(d)On the applicable Funding Date, in the event that Buyer fails to purchase from Seller the Purchased Assets identified in the related Custodial Identification Certificate, Buyer shall deliver by electronic mail to the Bailee to the attention of
[] at [], an authorization (the “Electronic Authorization”) to release the Purchased Asset Files with respect to the Purchased Assets identified therein to Seller. Upon receipt of such Electronic Authorization, the Bailee shall release the Purchased Asset Files to Seller in accordance with Seller’s instructions.

(e)Following the Funding Date and the funding of the Purchase Price, the Bailee shall forward the Purchased Asset Files to Custodian at [], by insured overnight courier for receipt by Custodian no later than 1:00 p.m. on the third (3rd) Business Day following the applicable Funding Date (the “Delivery Date”).

(f)From and after the applicable Funding Date until the time of receipt of the Electronic Authorization or the Delivery Date, as applicable, the Bailee (a) shall maintain continuous custody (and will forward in accordance with clause (e) above) and control of the related Purchased Asset Files as bailee for Buyer and (b) is holding the related Purchased Assets as sole and exclusive bailee for Buyer unless and until otherwise instructed in writing by Buyer.

(g)Seller agrees to indemnify and hold the Bailee and its partners, directors, officers, agents and employees harmless against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever, including reasonable attorneys fees, that may be imposed on, incurred by, or asserted against it or them in any way relating to or arising out of this Bailee Letter or any action taken or not taken by it or them hereunder unless such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements (other than special, indirect, punitive or consequential damages, which shall in no event be paid by the Bailee) were imposed on, incurred by or asserted against the Bailee because of the breach by the Bailee of its obligations hereunder, which breach was caused by gross negligence or willful misconduct on the part of the Bailee or any of its partners, directors, officers, agents or employees. The foregoing indemnification shall survive any resignation or removal of the Bailee or the termination or assignment of this Bailee Letter.

(h)In the event that the Bailee fails to produce any document in a Purchased Asset File related to a Purchased Asset that is (or was required to be) then in its possession within ten (10) business days after required or requested by Seller or Buyer (a “Delivery Failure”), the Bailee shall indemnify and hold Buyer, on behalf of Buyers, harmless against actual out of pocket liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever, including reasonable attorneys fees, that may be imposed on, incurred by, or asserted against it in any way relating to or arising out of such Delivery Failure (but excluding special, indirect, punitive or consequential damages).

(i)Seller agrees to indemnify and hold Buyer and its respective affiliates and designees harmless against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever, including reasonable attorneys fees, that may be imposed on, incurred by, or asserted against it or them in any way relating to or arising out of a Custodial Delivery Failure (as defined in the Custodial Agreement) or the Bailee’s negligence, lack of good faith or willful misconduct. The foregoing indemnification shall survive any termination or assignment of this Bailee Letter.

(j)Seller hereby represents, warrants and covenants that the Bailee is not an affiliate of or otherwise controlled by Seller. Notwithstanding the foregoing, the parties hereby acknowledge that the Bailee hereunder may act as counsel to Seller in connection with a proposed transaction and [    ], has represented Seller in connection with negotiation, execution and delivery of the Master Repurchase and Securities Contract Agreement.

(k)The agreement set forth in this Bailee Letter may not be modified, amended or altered, except by written instrument, executed by all of the parties hereto.

(l)This Bailee Letter may not be assigned by Seller or the Bailee without the prior written consent of Buyer.

(m)For the purpose of facilitating the execution of this Bailee Letter as herein provided and for other purposes, this Bailee Letter may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute and be one and the same instrument. Electronically transmitted signature pages shall be binding to the same extent.

(n)This Bailee Letter shall be construed in accordance with the laws of the State of New York, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

(o)Capitalized terms used herein and defined herein shall have the meanings ascribed
to them in the Repurchase Agreement.

[SIGNATURES COMMENCE ON FOLLOWING PAGE]

Very truly yours,

[], as Seller

By:    
Name:
Title:

ACCEPTED AND AGREED:

[], as Bailee

By:
Name:
Title:

ACCEPTED AND AGREED:

GOLDMAN SACHS BANK USA,
a New York state-chartered bank, as Buyer

By:
Name:
Title:

Schedule A

[List of Purchased Asset Documents]

Attachment 1

CUSTODIAL IDENTIFICATION CERTIFICATE

On this [] day of [], 202[_], TERRA MORTGAGE CAPITAL I, LLC (“Seller”), under that certain Bailee Agreement of even date herewith (the “Bailee Agreement”), among Seller, [] (the “Bailee”), and GOLDMAN SACHS BANK USA, a New York state-chartered bank, as Buyer, does hereby instruct the Bailee to hold, in its capacity as Bailee, the Purchased Asset Files with respect to the Purchased Assets listed on Exhibit A to Attachment 1 hereto, which Purchased Assets shall be subject to the terms of the Bailee Agreement as of the date hereof.

Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Bailee Agreement.

IN WITNESS WHEREOF, Seller has caused this Identification Certificate to be executed and delivered by its duly authorized officer as of the day and year first above written.

TERRA MORTGAGE CAPITAL I, LLC

By:    
Name:
Title:

Exhibit A to Attachment 1

PURCHASED ASSET SCHEDULE

Attachment 2

FORM OF BAILEE’S TRUST RECEIPT AND CERTIFICATION

[], 201

GOLDMAN SACHS BANK USA
[*]
[*]
[*]

Re:    Bailee Letter, dated as of [    ] (the “Bailee Letter”) by and among TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company (“Seller”), GOLDMAN SACHS BANK USA, a New York state-chartered bank (“Buyer”) and [    _____] (the “Bailee”)

Ladies and Gentlemen:

In accordance with the provisions of Paragraph (c) of the above-referenced Bailee Letter, the undersigned, as the Bailee, hereby certifies that as to each Purchased Asset described in the Purchased Asset Schedule (Exhibit A to Attachment 1), a copy of which is attached hereto, it has reviewed the Purchased Asset File (Exhibit B to Attachment 1) and has determined that (i) all documents listed in the Purchased Asset File are in its possession and (ii) such documents have been reviewed by it and appear regular on their face and relate to such Purchased Asset.

The Bailee hereby confirms that it is holding each such Purchased Asset File as agent and bailee for the exclusive use and benefit of Buyer pursuant to the terms of the Bailee Letter.

All initially capitalized terms used herein shall have the meanings ascribed to them in the above-referenced Bailee Letter.

[], BAILEE

By:    
Name:
Title:

cc: [Custodian]

EXHIBIT XVI

UNDERWRITING GUIDELINES1

1 Seller to advise.

EXHIBIT XVII

FUTURE FUNDING ADVANCE PROCEDURES

(a)Submission of Future Funding Due Diligence Package. Seller shall deliver to Buyer a due diligence package (the “Future Funding Due Diligence Package”) for Buyer’s review and approval, which shall contain the following items, to the extent applicable under the subject Purchased Asset Documents:

1The executed request for advance (which shall include Seller’s approval of such Future Funding Advance);

2The executed borrower’s affidavit;

3The fund control agreement (or escrow agreement, if funding through escrow);

4Certified copies of all relevant trade contracts, invoices, and lien wavers, if applicable

5The title policy endorsement for the advance;

6Certified copies of any tenant leases;

7Certified copies of any service contracts;

8Updated financial statements, operating statements and rent rolls, if applicable;

9Evidence of required insurance; and

10Updates to the engineering report, inspection report, and budget, if required.

(b)Approval of Future Funding Advance. Conditioned upon the timely and satisfactory completion of Seller’s requirements in clause (a) above, Buyer shall, no less than three (3) Business Days prior to the proposed Future Funding Date (1) notify Seller in writing (which may take the form of electronic mail format) that Buyer has not approved the proposed Future Funding Advance or (2) notify Seller in writing (which may take the form of electronic mail format) that Buyer has approved the proposed Future Funding Advance. Buyer’s failure to respond to Seller on or prior to three (3) Business Days prior to the proposed Future Funding Date shall be deemed to be a denial of Seller’s request that Buyer approve the proposed Future Funding Advance, unless Buyer and Seller has agreed otherwise in writing.

EX-10.15

Exhibit 10.15

GUARANTEE AGREEMENT

THIS GUARANTEE AGREEMENT, dated as of February 18, 2022 (as amended, restated, supplemented, or otherwise modified from time to time, this “Guarantee”), made by TERRA PROPERTY TRUST, INC., a Maryland corporation (“Guarantor”), in favor of GOLDMAN SACHS BANK USA, a New York state-chartered bank, as buyer (“Buyer”).

RECITALS

A.    Pursuant to that certain Uncommitted Master Repurchase and Securities Contract Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Repurchase Agreement”), between Buyer and Terra Mortgage Capital I, LLC, a Delaware limited liability company (“Seller”), Seller has agreed to sell to Buyer certain Eligible Assets (as defined in the Repurchase Agreement), upon the terms and subject to the conditions set forth therein. Pursuant to the terms of that certain Custodial Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Custodial Agreement”), by and among Buyer, Seller and Computershare Trust Company, N.A. (“Custodian”), Custodian is required to take possession of the Purchased Assets (as defined in the Custodial Agreement), along with certain other documents specified in the Custodial Agreement, as Custodian of Buyer and any future purchaser, on several delivery dates, in accordance with the terms and conditions of the Custodial Agreement. Pursuant to the terms of that certain Pledge and Security Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Pledge Agreement”), made by Terra Mortgage Portfolio I, LLC, a Delaware limited liability company (“Pledgor”), in favor of Buyer, Pledgor has pledged to Buyer all of Pledgor’s right, title and interest in and to the Collateral (as defined in the Pledge Agreement). The Repurchase Agreement, the Custodial Agreement, the Depository Agreement (as defined in the Repurchase Agreement), the Servicing Agreement (as defined in the Repurchase Agreement), the Fee Letter (as defined in the Repurchase Agreement), the Pledge Agreement and this Guarantee shall be referred to herein as the “Transaction Documents”.

B.    Guarantor directly or indirectly owns one hundred percent (100%) of the legal and beneficial limited liability company interest in, and controls, Seller and Pledgor, and Guarantor will derive benefits, directly and indirectly, from the execution, delivery and performance by Seller of the Transaction Documents to which Seller is a party and the transactions contemplated by the Repurchase Agreement.

C.    It is a condition precedent to Buyer acquiring the Purchased Assets pursuant to the Repurchase Agreement that Guarantor shall have executed and delivered this Guarantee.

NOW, THEREFORE, in consideration of the foregoing premises, to induce Buyer to enter into the Transaction Documents and to enter into the transactions contemplated thereunder, Guarantor hereby agrees with Buyer as follows:

1.Defined Terms. Each of the definitions set forth on Exhibit A hereto are, solely for the purpose of Section 9 hereof, hereby incorporated herein by reference. Unless otherwise defined herein, terms which are defined in the Repurchase Agreement and used herein are intended to be used as such terms are so defined in the Repurchase Agreement.

28701071.4.BUSINESS

2.Guarantee.

(a)Subject to Sections 2(b), 2(c), 2(d) and 2(e) below, Guarantor hereby unconditionally and irrevocably guarantees to Buyer the prompt and complete payment and performance when due, whether at stated maturity, by acceleration of the Repurchase Date or otherwise, of all of the following: (i) all payment obligations owing by Seller and Pledgor to Buyer under or in connection with the Repurchase Agreement or any of the other Transaction Documents or other agreements relating thereto, (ii) any and all extensions, renewals, modifications, amendments or substitutions of the foregoing, and (iii) any other obligations of Seller and Pledgor in favor of Buyer under each of the Transaction Documents (collectively, the “Obligations”).

(b)Notwithstanding anything in Section 2(a) above to the contrary, but subject in all cases to Sections 2(c), 2(d) and 2(e) below, the maximum aggregate liability of Guarantor hereunder and under the other Transaction Documents shall in no event exceed (i) prior to the Amortization Extension Period, twenty-five percent (25%) of the then currently unpaid aggregate Purchase Prices of all Purchased Assets, and (ii) during the Amortization Extension Period, fifty percent (50%) of the then currently unpaid aggregate Purchase Prices of all Purchased Assets; provided, that Guarantor’s maximum aggregate liability will be fifty percent (50%) of the then currently unpaid aggregate Purchase Prices of all Purchased Assets that Buyer has approved as non-performing Purchased Assets at all times prior to the Termination Date.

(c)Notwithstanding the foregoing, or any other provision herein to the contrary, the applicable maximum limitation on recourse liability as set forth in Section 2(b) above SHALL BECOME NULL AND VOID and shall be of no further force and effect, and the Obligations shall be full recourse to Guarantor, upon the occurrence of any of the following:

(i)a voluntary bankruptcy or insolvency proceeding is commenced by Seller, Pledgor or Guarantor under the Bankruptcy Code or any similar federal or state law;

(ii)Seller, Pledgor or Guarantor consents to or joins in any application for the appointment of a custodian, receiver, trustee or examiner for Seller or Seller’s assets and liabilities;

(iii)an involuntary bankruptcy or insolvency proceeding is commenced against Seller, Pledgor or Guarantor under the Bankruptcy Code or any similar federal or state law, and, in connection therewith, Seller, Pledgor or Guarantor or any Affiliate of Seller, Pledgor or Guarantor (alone or in any combination) (A) has or have colluded or conspired with the creditors commencing such involuntary bankruptcy or insolvency proceeding, (B) has or have solicited or caused to be solicited petition creditors for such involuntary bankruptcy or insolvency proceeding, or (C) has or have filed an answer consenting to or joining in such involuntary bankruptcy or insolvency proceeding;

(iv)the gross negligence or willful misconduct of Seller, Pledgor or Guarantor which results in the seizure or forfeiture of the Purchased Assets or any portion thereof, or Seller’s interest therein; and

(v)any breach of the separateness covenants set forth in Article 12 of the Repurchase Agreement that results in the substantive consolidation of any of the assets and/or liabilities of Seller with the assets and/or liabilities of any other Person in any bankruptcy or insolvency proceeding under the Bankruptcy Code or any similar federal or state law (including, without limitation, in connection with any proceeding under any Insolvency Law).

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28701071.4.BUSINESS

(d)In addition to the foregoing, and notwithstanding the applicable maximum limitation on recourse liability as set forth in Section 2(b) above (which Section 2(b), for the avoidance of doubt, shall not apply to this Section 2(d)), Guarantor shall be liable to Buyer for any costs, losses, claims, expenses or other liabilities actually incurred by Buyer resulting from any of the following matters:

(i)fraud, intentional misrepresentation or willful misconduct by Seller, Pledgor, or Guarantor, or any Affiliate of Seller, Pledgor or Guarantor, in connection with the execution and delivery of this Guarantee, the Repurchase Agreement or any of the other Transaction Documents, or any certificate, report, financial statement or other instrument or document furnished to Buyer at the time of the closing of the Repurchase Agreement or during the term of the Repurchase Agreement;

(ii)any material breach by Seller, Guarantor, or any of their respective Affiliates, of any representations and warranties relating to Environmental Laws, or any indemnity for costs incurred by Buyer in connection with the violation of any Environmental Law, the correction of any environmental condition, or the removal of any Materials of Environmental Concern, in each case in any way affecting any or all of the Purchased Assets; provided that the guarantee set forth in this Section 2(d)(ii) shall terminate upon foreclosure and transfer or assumption of the Purchased Asset following an Event of Default pursuant to a public or private sale or strict foreclosure, or other similar enforcement proceeding but solely to the extent that the occurrence giving rise to Buyer’s liability under this Section 2(d)(ii) (A) first arose after such Purchased Asset was transferred or assumed and (B) is unrelated to any act or omission of Seller, Pledgor or Guarantor; and

(iii)Seller’s failure to obtain Buyer’s prior written consent to any subordinate financing or voluntary liens in each case that encumber any or all of the Purchased Assets that are not permitted under the Transaction Documents.

(e)In addition to the foregoing, Guarantor further agrees to pay any and all reasonable out-of-pocket expenses (including, without limitation, all reasonable fees and disbursements of counsel) which may be paid or incurred by Buyer in enforcing any rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights with respect to, or collecting against, Guarantor under this Guarantee after the occurrence and during the continuance of an Event of Default. This Guarantee shall remain in full force and effect until the later of (i) the date upon which the Obligations are paid in full and (ii) the termination of the Repurchase Agreement, notwithstanding that from time to time prior thereto, Seller and/or Pledgor may be free from any Obligations.

(f)Nothing herein shall be deemed a waiver of any right which Buyer may have under Sections 506(a), 506(b), 1111(b) or any other provision of the Bankruptcy Code to file a claim for the full amount of the outstanding obligations under the Repurchase Agreement or to require that all Purchased Assets shall continue to secure all of the outstanding obligations owing to Buyer in accordance with the Repurchase Agreement or any other Transaction Documents.

(g)No payment or payments made by Seller, Pledgor or any other Person or received or collected by Buyer from Seller, Pledgor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application, at any time or from time to time, in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of Guarantor hereunder which shall, notwithstanding any such payment or payments, remain liable for the amount of the Obligations under this Guarantee until the Obligations are paid in full, but subject to the limitations on Guarantor’s liability under Section 2(b) above (if applicable).

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28701071.4.BUSINESS

(h)Guarantor agrees that whenever, at any time, or from time to time, Guarantor shall make any payment to Buyer on account of any liability hereunder, Guarantor will notify Buyer in writing that such payment is made under this Guarantee for such purpose.

3.Subrogation. Upon making any payment hereunder, Guarantor shall be subrogated to the rights of Buyer against Seller and Pledgor and any collateral for any Obligations with respect to such payment; provided, that Guarantor shall not seek to enforce any right or receive any payment by way of subrogation until all amounts due and payable by Seller or Pledgor to Buyer under the Transaction Documents or any related documents have been paid in full; provided, further, that such subrogation rights shall be subordinate in all respects to all amounts owing to Buyer under the Transaction Documents.

4.Amendments, etc. with Respect to the Obligations. Subject to Section 6 hereof, until the Obligations shall have been paid in full, Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against Guarantor, and without notice to or further assent by Guarantor, any demand for payment of any of the Obligations made by Buyer may be rescinded by Buyer and any of the Obligations continued, and the Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by Buyer and any Transaction Document and any other document in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as Buyer may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by Buyer for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. Buyer shall have no obligation to protect, secure, perfect or insure any lien at any time held by it as security for the Obligations or any property subject thereto. When making any demand hereunder against Guarantor, Buyer may, but shall be under no obligation to, make a similar demand on Seller or any other Person, and any failure by Buyer to make any such demand or to collect any payments from Seller or any such other Person or any release of Seller or such other Person shall not relieve Guarantor of its Obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of Buyer against Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

5.Guarantee Absolute and Unconditional.

(a)Guarantor hereby agrees that its obligations under this Guarantee constitute a guarantee of payment when due and not of collection. Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by Buyer upon this Guarantee or acceptance of this Guarantee; the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guarantee; and all dealings between Seller and Guarantor, on the one hand, and Buyer, on the other hand, shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guarantee. Guarantor waives promptness, diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon Seller or Guarantor with respect to the Obligations. This Guarantee shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (i) the validity, regularity or enforceability of any Transaction Document, any of the Obligations or any collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by Buyer, (ii) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by Seller against Buyer, (iii) any requirement that Buyer exhaust any right to take any action against Seller or any other Person prior to or contemporaneously with proceeding to exercise any right against Guarantor under this Guarantee or (iv) any other circumstance whatsoever (with or without notice to or

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28701071.4.BUSINESS

knowledge of Seller and Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of Seller for the Obligations, in bankruptcy or in any other instance. When pursuing its rights and remedies hereunder against Guarantor, Buyer may, but shall be under no obligation to, pursue such rights and remedies that Buyer may have against Seller or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by Buyer to pursue such other rights or remedies or to collect any payments from Seller or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of Seller or any such other Person or any such collateral security, guarantee or right of offset, shall not relieve Guarantor 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 Buyer against Guarantor. This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon Guarantor and its successors and assigns, and shall inure to the benefit of Buyer and its permitted successors, endorsees, transferees and assigns, until all the Obligations and the obligations of Guarantor under this Guarantee shall have been satisfied by payment in full.

(b)Without limiting the generality of the foregoing, Guarantor hereby agrees, acknowledges, and represents and warrants to Buyer as follows:

(i)Guarantor hereby waives any defense arising by reason of, and any and all right to assert against Buyer any claim or defense based upon, an election of remedies by Buyer which in any manner impairs, affects, reduces, releases, destroys and/or extinguishes Guarantor’s subrogation rights, rights to proceed against Seller or any other guarantor for reimbursement or contribution, and/or any other rights of Guarantor to proceed against Seller, any other guarantor or any other person or security.

(ii)Guarantor is presently informed of the financial condition of Seller and of all other circumstances which diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Guarantor hereby covenants that it will make its own investigation and will continue to keep itself informed about the financial condition of Seller, the status of other guarantors, if any, and of all other circumstances which bear upon the risk of nonpayment and that it will continue to rely upon sources other than Buyer for such information and will not rely upon Buyer for any such information. Absent a written request for such information by Guarantor to Buyer, Guarantor hereby waives the right, if any, to require Buyer to disclose to Guarantor any information which Buyer may now or hereafter acquire concerning such condition or circumstances including, but not limited to, the release of or revocation by any other guarantor.

(iii)Guarantor has independently reviewed the Transaction Documents and related agreements and has made an independent determination as to the validity and enforceability thereof, and in executing and delivering this Guarantee to Buyer, Guarantor is not in any manner relying upon the validity, and/or enforceability, and/or attachment, and/or perfection of any liens or security interests of any kind or nature granted by Seller or any other guarantor to Buyer, now or at any time and from time to time in the future.

6.Reinstatement. This Guarantee shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by Buyer upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of Seller or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, Seller or any substantial part of the property of Seller, or otherwise, all as though such payments had not been made.

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7.Payments. Guarantor hereby agrees that the Obligations will be paid to Buyer, without set-off or counterclaim, in United States Dollars at the address specified in writing by Buyer.

8.Representations and Warranties. Guarantor hereby represents and warrants to Buyer that:

(a)Guarantor is duly organized, validly existing and in good standing under the laws and regulations of its jurisdiction of incorporation or organization, as the case may be. Guarantor is duly licensed, qualified, and in good standing in every state where such licensing or qualification is necessary for the transaction of its business, except where failure to so qualify would not be reasonably expected to have a Material Adverse Effect. Guarantor has the power to own and hold the assets it purports to own and hold, and to carry on its business as now being conducted and proposed to be conducted, and has the power to execute, deliver, and perform its obligations under this Guarantee and the other Transaction Documents to which Guarantor is a party;

(b)This Guarantee has been duly executed by Guarantor, for good and valuable consideration. This Guarantee constitutes a legal, valid and binding obligation of Guarantor enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (whether enforcement is sought in proceedings in equity or at law);

(c)Guarantor does not believe, nor does it have any reason or cause to believe, that it cannot perform in all respects all covenants and obligations contained in this Guarantee applicable to Guarantor;

(d)The execution, delivery and performance of this Guarantee by Guarantor will not (i) conflict with or result in a breach of any of the terms, conditions or provisions of the organizational documents of Guarantor, (ii) violate or conflict with any contractual provisions of, or cause a default or event of default under, any indenture, loan agreement, mortgage or other material contract or agreement to which Guarantor is a party or by which Guarantor may be bound, to the extent such conflict or breach would have a Material Adverse Effect upon Guarantor’s ability to perform its obligations hereunder, (iii) result in the creation or imposition of any Lien upon any of the assets of Guarantor, other than pursuant to the Transaction Documents, to the extent such creation or imposition would have a Material Adverse Effect upon Guarantor’s ability to perform its obligations hereunder, (iv) conflict with any judgment or order, writ, injunction, decree or demand of any Governmental Authority applicable to Guarantor, or (v) conflict with any applicable Requirement of Law;

(e)As of the Closing Date, any Purchase Date for any Transaction under the Repurchase Agreement, any Future Funding Date, or on the first day of any Renewal Period, except as previously disclosed to Buyer in writing on or prior to such date, there is no action, suit, proceeding, litigation, investigation, arbitration or proceeding of or before any arbitrator or Governmental Authority pending or, to Guarantor’s Knowledge, threatened in writing by or against Guarantor or against its assets (i) with respect to any of the Transaction Documents or any of the transactions contemplated hereby or thereby or (ii) that would reasonably be expected to, individually or in the aggregate, result in any Material Adverse Effect. Guarantor is in compliance in all material respects with all Requirements of Law. Guarantor is not in default in any material respect with respect to any judgment, order, writ, injunction, decree, rule, or regulation of any arbitrator or Governmental Authority;

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28701071.4.BUSINESS

(f)Guarantor has timely filed all required federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all federal and other Taxes (whether or not shown on a return), which have become due, except for Taxes that are being contested in good faith by appropriate proceedings diligently conducted and for which appropriate reserves have been established in accordance with GAAP. Guarantor has satisfied all of its withholding tax obligations. No tax Liens have been filed against any assets of Guarantor and no claims are currently being asserted in writing against Guarantor with respect to Taxes (except for liens and with respect to Taxes not yet due and payable or liens or claims with respect to Taxes that are being contested in good faith and for which adequate reserves have been established in accordance with GAAP);

(g)No order, consent, approval, license, authorization or validation of, or filing, recording or registration by Guarantor with, or exemption by, any Governmental Authority is required to authorize, or is required in connection with, (i) the execution, delivery and performance by Guarantor of this Guarantee, (ii) the legality, validity, binding effect or enforceability of this Guarantee against Guarantor or (iii) the consummation of the transactions contemplated by this Guarantee (other than consents, approvals and filings that have been obtained or made as applicable, and the filing of certain financing statements in respect of certain security interests); and

(h)Except as disclosed to Buyer in writing, there are no judgments against Guarantor unsatisfied of record or docketed in any court located in the United States of America that would reasonably be expected to have a Material Adverse Effect and no Act of Insolvency has ever occurred with respect to Guarantor.

Guarantor agrees that the foregoing representations and warranties shall be deemed to have been made by Guarantor on the date of each Transaction under the Repurchase Agreement, on and as of such date of the Transaction, as though made hereunder on and as of such date.

9.Financial Covenants.

(a)Guarantor hereby agrees that, until the Repurchase Obligations have been paid in full, Guarantor shall not:

(i)permit its Liquidity at any time to be less than an amount equal to the lesser of (A) Fifteen Million and No/100 Dollars ($15,000,000.00), and (B) the greater of (1) Five Million and No/100 Dollars ($5,000,000.00) and (2) ten percent (10%) of the aggregate Purchase Prices of all Purchased Assets;

(ii)permit its Cash Liquidity at any time to be less than the greater of (A) Five Million and No/100 Dollars ($5,000,000.00) and (B) five percent (5%) of aggregate Purchase Prices of all Purchased Assets;

(iii)permit its Tangible Net Worth at any time to be less seventy-five percent (75%) of its current Tangible Net Worth as of the date hereof;

(iv)permit its Interest Coverage Ratio to be less than 1.5 to 1.0; and

(v)permit at any time the ratio of its Total Indebtedness to the Tangible Net Worth of Guarantor, calculated in accordance with GAAP, to be greater than 3.0 to 1.0.

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28701071.4.BUSINESS

(b)Guarantor’s compliance with the financial covenants set forth in this Section 9 must be evidenced by the financial statements and by a Covenant Compliance Certificate in the form of Exhibit IX to the Repurchase Agreement furnished together therewith, as provided by Seller to Buyer pursuant to Articles 11(g)(ii) and 11(g)(iii) of the Repurchase Agreement, and compliance with all such financial covenants are subject to continuing verification by Buyer, and Guarantor shall provide information that is reasonably requested by Buyer with respect to any lawsuits and/or other matters disclosed in any financial statements of Guarantor delivered to Buyer which would reasonably be expected to have a Material Adverse Effect on Guarantor’s ability to comply with the financial covenants set forth in this Section 9; provided, that, for the avoidance of doubt, such continued verification shall not obligate Guarantor or Seller to provide additional financial statements or Covenant Compliance Certificates other than those required under Articles 11(g)(ii) and 11(g)(iii) of the Repurchase Agreement.

(c)If Seller, Guarantor or any of their respective Affiliates has entered into or shall enter into or amend any other commercial real estate loan repurchase agreement or warehouse facility or other commercial real estate lending transaction for the financing of mortgage loans with any other repurchase buyer or lender which by its terms provides more favorable terms to such other repurchase buyer or lender with respect to any of the financial covenants contained in this Section 9 (“More Favorable Agreement”), then (i) the financial covenants contained in this Section 9 shall be deemed to be automatically modified to such more favorable terms as of the effective date of such More Favorable Agreement, and (ii) Guarantor shall give to Buyer (A) in the case of an existing More Favorable Agreement, prompt notice of such more favorable terms, or (B) in the case of a More Favorable Agreement that has not yet been executed, not less than ten (10) Business Days’ prior notice of such more favorable terms. Upon Buyer’s request, Guarantor shall enter into such amendments to this Guarantee as may be required by Buyer to give effect to such more favorable terms. Notwithstanding anything contained in this Section 9(c) to the contrary, this Section 9(c) shall only apply to financial covenants and any related definitions contained in this Guarantee and shall not extend to any provisions of any other commercial real estate lending, repurchase or warehouse facility.

10.Further Covenants of Guarantor:

(a)Taxes. Guarantor will timely file all required federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by it and will pay all federal and other Taxes (whether or not shown on a return), which have become due, except for Taxes that are being contested in good faith by appropriate proceedings diligently conducted and for which appropriate reserves have been established in accordance with GAAP.

(b)Anti-Money Laundering, Anti-Corruption and Economic Sanctions.

(i)Guarantor is in compliance, in all material respects, with (A) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other applicable enabling legislation or executive order relating thereto, (B) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA Patriot Act of 2001”), and (C) the United States Foreign Corrupt Practices Act of 1977, as amended, and any other applicable anti-bribery laws and regulations. No part of the proceeds of any Transaction will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

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28701071.4.BUSINESS

(ii)Guarantor agrees that, from time to time upon the prior written request of Buyer, it shall execute and deliver such further documents, provide such additional information and reports and perform such other acts as Buyer may reasonably request in order to insure compliance with the provisions hereof (including, without limitation, compliance with the USA Patriot Act of 2001) and to fully effectuate the purposes of this Guarantee; provided, however, that nothing in this Section 10(b)(ii) shall be construed as requiring Buyer to conduct any inquiry or decreasing Guarantor’s responsibility for its statements, representations, warranties or covenants hereunder. In order to enable Buyer and its Affiliates to comply with any anti-money laundering program and related responsibilities including, but not limited to, any obligations under the USA Patriot Act of 2001 and regulations thereunder, Guarantor on behalf of itself and its Affiliates makes the foregoing representations and covenants to Buyer and its Affiliates that neither Guarantor nor any of its Affiliates is a Prohibited Investor and Guarantor is not acting on behalf of or for the benefit of any Prohibited Investor. Guarantor agrees to promptly notify Buyer or a person appointed by Buyer to administer their anti-money laundering program, if applicable, of any change in information affecting this representation and covenant.

(c)Office of Foreign Assets Control. Guarantor warrants, represents and covenants that neither Guarantor nor any of its Affiliates are or will be an entity or Person that is or is owned or controlled by a Person that is the subject of any Sanctions. Guarantor covenants and agrees that, with respect to the Transactions under the Transaction Documents, none of Guarantor or, to the best of Guarantor’s knowledge after due inquiry, any of its Affiliates will conduct any business, nor engage in any transaction, assets or dealings, with any Person who is the subject of Sanctions. Guarantor further covenants and agrees that it will not, directly or indirectly, use the proceeds of the facility, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions.

(d)Intentionally Omitted.

(e)Limitation on Distributions. After the occurrence and during the continuance of any Default or Event of Default, Guarantor shall not declare or make any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity or ownership interest of Guarantor, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Guarantor; provided, however, that so long as no monetary Default or Event of Default shall have occurred and be continuing, Guarantor may distribute the minimum amount of cash necessary for Guarantor to maintain its status as a REIT and avoid the payment of any income or excise taxes by Guarantor, provided that such distributions are further distributed by Guarantor to maintain its status as a REIT or avoid the payment of income or excise taxes by Guarantor;

11.Right of Set-Off. Guarantor hereby irrevocably authorizes Buyer and its Affiliates, after the occurrence and during the continuance of an Event of Default, without notice to Guarantor, any such notice being expressly waived by Guarantor to the extent permitted by applicable law, upon any Obligations becoming due and payable by Guarantor (whether at stated maturity, by acceleration or otherwise), to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other 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 Buyer to or for the credit or the account of Guarantor, or any part thereof in such amounts as Buyer may elect, against and on account of the obligations and liabilities of Guarantor to Buyer hereunder and claims of every nature and description of Buyer against Guarantor, in any currency, arising under any

    9

28701071.4.BUSINESS

Transaction Document, as Buyer may elect, whether or not Buyer has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Buyer shall notify Guarantor promptly of any such set-off and the application made by Buyer, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of Buyer under this Section 11 are in addition to other rights and remedies (including, without limitation, other rights of set-off) that Buyer may have.

12.Severability. Any provision of this Guarantee which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

13.Section Headings. The section headings used in this Guarantee are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

14.No Waiver; Cumulative Remedies. Buyer shall not by any act (except by a written instrument pursuant to Section 15 hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default or event of default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of Buyer, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by Buyer of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Buyer would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law.

15.Waivers and Amendments; Successors and Assigns; Governing Law. None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except by a written instrument executed by Guarantor and Buyer. This Guarantee shall be binding upon the successors and assigns of Guarantor and shall inure to the benefit of Buyer and its permitted successors and assigns. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

16.Notices. Unless otherwise provided in this Guarantee, all notices, consents, approvals and requests required or permitted hereunder shall be given in writing and shall be effective for all purposes if hand delivered or sent by (a) hand delivery, with proof of delivery, (b) certified or registered United States mail, postage prepaid, (c) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of delivery, or (d) telecopier (with answerback acknowledged) or e-mail provided that such telecopied or e-mailed notice must also be delivered by one of the means set forth above, to the address specified below or at such other address and person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the other parties hereto in the manner provided for in this Section 16. A notice shall be deemed to have been given: (v) in the case of hand delivery, at the time of delivery, (w) in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day, (x) in the case of expedited prepaid delivery upon the first attempted delivery on a Business Day, (y) in the case of telecopier, upon receipt of answerback confirmation, provided that such telecopied notice was also delivered as required in this Section 16, or (z) in the case of e-mail, at the time of delivery, provided that such e-mailed notice was

    10

28701071.4.BUSINESS

also delivered as required in this Section 16. A party receiving a notice that does not comply with the technical requirements for notice under this Section 16 may elect to waive any deficiencies and treat the notice as having been properly given.

Buyer:    GOLDMAN SACHS BANK USA
200 West Street
New York, New York 10282
Attention:    Mr. Jeffrey Dawkins
Telephone:    (212) 902-6852
Telecopy:    (212) 977-4870
Email:    jeffrey.dawkins@gs.com
Email:    gs-refgwarehouse@ny.email.gs.com
Email:    gs-crewarehouse-am@ny.email.gs.com
Email:    gs-warehouse-ops@ny.email.gs.com

With copies to:    GOLDMAN SACHS BANK USA
2001 Ross Avenue, Suite 2800

Dallas, Texas 75201

Attention: Joe Osborne and Robert Ivey

Telephone: (972) 501-3977

Email: joe.osborne@gs.com

Email: Robert.ivey@gs.com

and:    DECHERT LLP

Cira Centre

2929 Arch Street

Philadelphia, PA 19104

Attention: Kenneth Hackman, Esq.

Telephone: (215) 994-2638

Facsimile: (215) 655-2638

Email: kenneth.hackman@dechert.com

Guarantor:    TERRA PROPERTY TRUST, INC.
550 Fifth Avenue, Sixth Floor

New York, New York 10036

Attn: Michael Muscat

Telephone: (212) 753-5100 Ext 268

Email: mikem@mavikcapital.com

With copies to:    TERRA PROPERTY TRUST, INC.
550 Fifth Avenue, Sixth Floor

New York, New York 10036

Attn: Vik Uppal

Telephone: (212) 753-5100 Ext 250

Email: vik@mavikcapital.com

And to:    TERRA PROPERTY TRUST, INC.
550 Fifth Avenue, Sixth Floor

New York, New York 10036

Attn: Greg Pinkus

Telephone: (212) 753-5100 Ext 275

Email:greg@mavikcapital.com

assetmanagement@mavikcapital.com

don@mavikcapital.com

    11

28701071.4.BUSINESS

17.SUBMISSION TO JURISDICTION; WAIVERS. EACH OF GUARANTOR AND BUYER HEREBY IRREVOCABLY AND UNCONDITIONALLY:

(a)SUBMITS TO THE NON- EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF, SOLELY FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING BROUGHT TO ENFORCE ITS OBLIGATIONS UNDER THIS GUARANTEE OR RELATING IN ANY WAY TO THIS GUARANTEE, THE REPURCHASE AGREEMENT OR ANY TRANSACTION UNDER THE REPURCHASE AGREEMENT;

(b)CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AND ANY RIGHT OF JURISDICTION ON ACCOUNT OF ITS PLACE OF RESIDENCE OR DOMICILE;

(c)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 IN SECTION 16 HEREOF OR AT SUCH OTHER ADDRESS OF WHICH BUYER OR GUARANTOR, AS APPLICABLE, SHALL HAVE BEEN NOTIFIED; AND

(d)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.

18.Integration. This Guarantee represents the agreement of Guarantor and Buyer with respect to the subject matter hereof and there are no promises or representations by Buyer or Guarantor relative to the subject matter hereof not reflected herein.

19.Counterparts. This Guarantee may be executed in counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument. Delivery by telecopier or other electronic transmission (including a .pdf e-mail transmission) of an executed counterpart of a signature page to this Guarantee shall be effective as delivery of an original executed counterpart of this Guarantee.

20.Acknowledgments. Guarantor hereby acknowledges that:

(a)Guarantor has been advised by counsel in the negotiation, execution and delivery of this Guarantee and the related documents;

(b)Buyer does not have any fiduciary relationship to Guarantor, and the relationship between Buyer, on the one hand, and Guarantor, on the other, is solely that of creditor and surety; and

(c)no joint venture exists between or among any of Buyer, Guarantor and/or Seller.

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28701071.4.BUSINESS

21.Intent. Guarantor intends for this Guarantee to be a credit enhancement related to (i) a repurchase agreement, within the meaning of Section 101(47) of the Bankruptcy Code and, therefore, for this Guarantee to be itself a repurchase agreement, within the meaning of Section 101(47) and Section 559 of the Bankruptcy Code; and (ii) a securities contract within the meaning of Section 741(7) of the Bankruptcy Code and, therefore, for this Guarantee to be itself a securities contract, within the meaning of Section 741(7) and Section 555 of the Bankruptcy Code.

22.WAIVERS OF JURY TRIAL. EACH OF GUARANTOR AND BUYER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE OR ANY RELATED DOCUMENT AND FOR ANY COUNTERCLAIM HEREIN OR THEREIN.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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28701071.4.BUSINESS

IN WITNESS WHEREOF, Guarantor has caused this Guarantee to be duly executed and delivered as of the date first above written.

GUARANTOR:

TERRA PROPERTY TRUST, INC.,
a Maryland corporation

By:    /s/ Gregory Pinkus        
Name:    Gregory Pinkus
Title: Chief Financial Officer, Treasurer and Secretary    

Signature Page to Guarantee Agreement

28701071.4.BUSINESS

Exhibit A

Definitions

“Affiliate”: With respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with, such Person.

“Adjusted Interest Expense”: Interest Expense adjusted to exclude the amortization of fees paid, accrued prepayment penalties, debt extinguishment charges, non-recourse asset-level interest expense, and other one-time interest related charges.

“Cash and Cash Equivalents”: Any of the following: (a) cash, (b) fully federally insured demand deposits, or (c) USTs with residual maturity of 90 days or less.

“Cash Liquidity”: With respect to any Person on any date, the amount of unrestricted Cash and Cash Equivalents held by such Person and its consolidated Subsidiaries.

“Consolidated EBITDA”: With respect to any Person, for any period of four consecutive fiscal quarters ended on the last day of any fiscal quarter of such Person, an amount equal to, the following, all determined on a consolidated basis, without duplication, for any Person and its consolidated Subsidiaries in accordance with GAAP: (a) Consolidated Net Income (or loss) of such Person, plus (b) the following (but only to the extent actually deducted in calculating such Consolidated Net Income (or loss)): (i) depreciation and amortization expense, (ii) Interest Expense, (iii) income tax expense, (iv) extraordinary or non-cash non-recurring losses and (v) transaction costs in connection with the Transaction Documents, and minus (c) the following (but only to the extent actually added in calculating such Consolidated Net Income (or loss)): extraordinary or non-cash non-recurring gains; determined, in each case, on a consolidated basis.

“Consolidated Net Income”: With respect to any Person for any period of four consecutive fiscal quarters ended on the last day of any fiscal quarter of such Person, the sum of all the consolidated net income of such Person and its consolidated Subsidiaries determined in accordance with GAAP and in each case, determined on a consolidated basis without duplication.

“GAAP”: Generally accepted accounting principles as in effect from time to time in the United States, consistently applied.

“Governing Document”: With respect to any Person, the limited partnership agreement, limited liability company agreement, exempted limited partnership agreement, memorandum and articles of association, or other equivalent governing document in the applicable jurisdiction of such Person, as the same may be further amended, restated, modified or supplemented in accordance with the terms of such governing document.

“Interest Coverage Ratio”: As of any date of determination in respect of any fiscal quarter, Consolidated EBITDA for the preceding four fiscal quarters divided by Adjusted Interest Expense for the preceding four fiscal quarters.

“Interest Expense”: With respect to any Person and its consolidated Subsidiaries in respect of any period of four consecutive fiscal quarters, ended on the last day of any fiscal quarter of such Person, determined on a consolidated basis without duplication, consolidated interest expense of such Person and its consolidated Subsidiaries, whether paid or accrued, without deduction of consolidated interest income of such Person and its consolidated Subsidiaries, including, without limitation or duplication, or, to the extent not so included, with the addition of: (i) interest expense associated with any interest rate hedging activity of such Person; (ii) the amortization of

    A-1

28701071.4.BUSINESS

debt discounts by such Person; and (iii) prepayment penalties and debt extinguishment charges paid by such Person, in all cases as reflected in the applicable consolidated financial statements of such Person and all as determined in accordance with GAAP.

“Liquidity”: With respect to Guarantor on any date of determination, (i) unrestricted and unencumbered (other than pursuant to the Transaction Documents) Cash and Cash Equivalents held by Guarantor and its consolidated Subsidiaries (including, without limitation, Cash and Cash Equivalents held by Seller), (ii) the aggregate amount of all unsecured credit facilities, undrawn capital from lines of credit, any preferred equity providers, and unfunded investor capital commitments of Guarantor, if any, that are available to be called on without condition (other than customary notice conditions or as otherwise set forth in the Governing Document of Guarantor) and are not pledged to any other Person or subject to any Lien (other than pursuant to a subscription financing line of credit), net of amounts outstanding under any subscription financing line of credit of Guarantor or any of its consolidated Subsidiaries, and (iii) any marketable securities held by Guarantor.

“Subsidiary”: With respect to any Person, any corporation, partnership, limited liability company or other entity (heretofore, now or hereafter established) 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, limited liability company or other entity (without regard to the occurrence 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, and shall include all Persons the accounts of which are with those of such Person pursuant to GAAP.

“Tangible Net Worth”: With respect to Guarantor on any date of determination, (A) the sum of (i) all amounts that would be included under capital or shareholder’s equity (or any like caption) on a balance sheet of Guarantor and its consolidated Subsidiaries at such date, minus (B) the sum of (i) amounts owing to Guarantor from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly affiliated with Guarantor or any Affiliate thereof, (ii) intangible assets of Guarantor and its consolidated Subsidiaries, if any, and (iii) prepaid Taxes and/or expenses, all on or as of such date and all without duplication as determined in accordance with GAAP.

“Total Indebtedness”: As of any date of determination, without duplication, all Indebtedness of Guarantor and its consolidated Subsidiaries on or as of such date.

“UST”: U.S. Dollar-denominated senior debt securities of the United States of America issued by the U.S. Treasury Department in Federal Reserve book entry form and backed by the full faith and credit of the United States of America, but excluding Treasury Inflation Protected Securities (“TIPS”) and Treasury Separate Trading of Registered Interest and Principal Securities (“STRIPS”).

    A-2

28701071.4.BUSINESS

EX-21.1

Exhibit 21.1

Terra Property Trust, Inc.

Subsidiaries

Subsidiaries	Jurisdiction of formation
Terra Ocean Ave, LLC	New York
Terra Ocean Ave, LLC	Delaware
Terra Renton, LLC	Delaware
Terra Driggs, LLC	Delaware
Terra Orange Grove Pref, LLC	Delaware
Terra Harlem Member, LLC	Delaware
Terra City Gardens Pref, LLC	Delaware
Terra 370 Lex LLC	Delaware
Terra University Flats Pref, LLC	Delaware
Terra Campus Park Pref, LLC	Delaware
Terra Mortgage Capital I, LLC	Delaware
Terra Mortgage Portfolio I, LLC	Delaware
Terra Lakeside Development, LLC	Delaware
Terra LOC Portfolio I, LLC	Delaware
Terra Lennox LLC	Delaware
Terra Walnut Development, LLC	Delaware
Terra Tailor Lofs Pref, LLC	Delaware
Terra Rockland Pref, LLC	Delaware
Terra Chico Pref, LLC	Delaware
Terra Palm Springs, LLC	Delaware
Terra University Park Mortgage, LLC	Delaware
Terra 870SC, LLC	Delaware
Terra Mortgage Capital II, LLC	Delaware
Terra Mortgage Portfolio II, LLC	Delaware
Terra 1550 Sfr LLC	Delaware
Terra 1550 Sfr LLC	Massachusetts
Terra Larkin Development LLC	Delaware
Mavik Quimisa LLC	Delaware
Terra Mortgage Capital III, LLC	Delaware
Terra Mortgage Portfolio III, LLC	Delaware
TPT Special Subsidiary, LLC	Delaware
Terra Industrial, LLC	Delaware
Mavik Colgan Creek, LLC	Delaware
Asano Bankers Hill LLC	Delaware
Mavik Asano LLC	Delaware

Subsidiaries	Jurisdiction of formation
Terra Astoria Pref, LLC	Delaware
Terra Northlake LLC	Delaware
TPT Special Subsidiary LLC	Delaware

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Vikram S. Uppal, certify that:

1.I have reviewed this Annual Report on Form 10-K of Terra Property Trust, 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(s) 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:

(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;

(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;

(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

(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(s) 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):

(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

(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:	March 11, 2022
		/s/ Vikram S. Uppal
		Vikram S. Uppal
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gregory M. Pinkus, certify that:

1.I have reviewed this Annual Report on Form 10-K of Terra Property Trust, 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(s) 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:

(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;

(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;

(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

(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(s) 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):

(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

(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:	March 11, 2022
		/s/ Gregory M. Pinkus
		Gregory M. Pinkus
		Chief Financial Officer and Chief Operating Officer
		(Principal Financial and Principal Accounting Officer)

EX-32

Exhibit 32

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 the Annual Report on Form 10-K of Terra Property Trust, Inc. (the “Company”) for the quarterly period ended December 31, 2021, as filed with the Securities Exchange Commission on the date hereof (the “Report”), I, Vikram S. Uppal, Chief Executive Officer, and I, Gregory M. Pinkus, Chief Financial Officer, each certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	March 11, 2022
		/s/ Vikram S. Uppal
		Vikram S. Uppal
		Chief Executive Officer
		(Principal Executive Officer)
		/s/ Gregory M. Pinkus
		Gregory M. Pinkus
		Chief Financial Officer and Chief Operating Officer
		(Principal Financial and Principal Accounting Officer)

Pursuant to the Securities and Exchange Commission Release 33-8238, dated June 5, 2003, this certification is being furnished and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any registration statement of the Company filed under the Securities Act of 1933, as amended.

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Cover - USD ($)	12 Months Ended
	Dec. 31, 2021	Mar. 11, 2022	Jun. 30, 2021
Cover [Abstract]
Entity Registrant Name	Terra Property Trust, Inc.
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Entity Central Index Key	0001674356
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Dec. 31, 2021
Title of 12(b) Security	6.00% Notes due 2026
Trading Symbol	TPTA
Security Exchange Name	NYSE
Entity File Number	001-40496
Entity Tax Identification Number	81-0963486
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Ex Transition Period	true
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Shell Company	false
Entity Incorporation, State or Country Code	MD
Entity Address, Address Line One	550 Fifth Avenue
Entity Address, Address Line Two	6th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10036
City Area Code	212
Local Phone Number	753-5100
ICFR Auditor Attestation Flag	false
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding		19,487,460
Entity Public Float			$ 0
Documents Incorporated by Reference	None

XML

Audit Information	12 Months Ended
	Dec. 31, 2021
Audit information [Abstract]
Auditor Firm ID	185
Auditor Name	KPMG LLP
Auditor Location	New York, NY

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Consolidated Balance Sheets - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Assets
Cash and cash equivalents	$ 35,783,956	$ 18,607,952
Restricted cash	7,411,811	12,145,616
Cash held in escrow by lender	7,902,880	2,166,755
Marketable securities	1,310,000	1,287,500
Loans held for investment	469,673,314	422,280,515
Equity investment in unconsolidated investments	69,713,793	36,259,959
Real estate owned, Net
Land, building and building improvements, net	58,325,068	63,385,339
Lease intangible assets, net	7,451,771	9,793,600
Operating lease right-of-use asset	27,394,936	16,105,888
Interest receivable	2,463,037	2,509,589
Due from related party	2,605,639	0
Other assets	3,505,953	3,934,468
Total assets	693,542,158	588,477,181
Liabilities
Term loan payable, net of deferred financing fees	91,940,062	105,245,801
Unsecured notes payable, net of debt issuance cost	81,856,799	0
Repurchase agreement payable, net of deferred financing fees	43,974,608	0
Obligations under participation agreements (Note 8 )	42,232,027	71,581,897
Mortgage loan payable, net of deferred financing fees and other	32,134,295	44,117,293
Revolving line of credit payable, net of deferred financing fees	38,186,472	0
Secured borrowing	34,586,129	18,187,663
Interest reserve and other deposits held on investments	7,411,811	12,145,616
Operating lease liability	27,394,936	16,105,888
Lease intangible liabilities, net (Note 6)	9,709,710	10,249,776
Due to Manager (Note 8)	2,388,317	1,257,098
Interest payable	1,879,626	1,185,502
Accounts payable and accrued expenses	1,264,131	3,968,603
Unearned income	449,690	677,856
Other liabilities	4,289,967	429,123
Total liabilities	419,698,580	285,152,116
Commitments and Contingencies
Equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized and none issued	0	0
Common stock, $0.01 par value, 450,000,000 shares authorized and 19,487,460 shares issued and outstanding at both December 31, 2021 and 2020, respectively	194,875	194,875
Additional paid-in capital	373,443,672	373,443,672
Accumulated deficit	(99,919,969)	(70,438,482)
Total equity	273,843,578	303,325,065
Total liabilities and equity	$ 693,542,158	$ 588,477,181
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Loans held for investment, net
Assets
Loans held for investment	$ 457,329,582	$ 417,986,462
Loans Held For Investment Acquired Through Participation
Assets
Loans held for investment	12,343,732	4,294,053
Preferred Stock
Equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized and none issued	0	0
Preferred Stock | Series A Preferred Stock
Equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized and none issued	$ 125,000	$ 125,000

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Consolidated Balance Sheet (Parentheticals) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	50,000,000	50,000,000
Preferred Stock, Shares Issued	0	0
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	450,000,000	450,000,000
Common Stock, Shares, Issued	19,487,460	19,487,460
Common Stock, Shares, Outstanding	19,487,460	19,487,460
Cumulative Preferred Stock
Preferred Stock, Shares Authorized	125	125
Preferred Stock, Shares Issued	125	125
Preferred Stock, Shares Outstanding	125	125
Preferred Stock, Dividend Rate, Percentage	12.50%	12.50%

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Consolidated Statements of Operations - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Revenues [Abstract]
Interest income	$ 36,743,470	$ 39,392,209
Real estate operating revenue	8,894,991	10,423,563
Prepayment fee income	190,997	0
Other operating income	855,799	505,116
Total	46,685,257	50,320,888
Operating expenses
Operating expenses reimbursed to Manager	6,916,371	6,041,075
Asset management fee	5,134,149	4,480,706
Asset serving fee	1,181,924	1,008,256
Provision for loan losses	10,904,163	3,738,758
Real estate operating expenses	5,003,893	4,505,119
Depreciation and amortization	3,989,114	4,635,980
Impairment charge	3,395,430	0
Professional fees	1,795,856	1,695,876
Directors fees	145,000	190,000
Other	448,503	371,444
Total Operating Expenses	38,914,403	26,667,214
Operating Income	7,770,854	23,653,674
Other Income and expense
Interest expense from obligations under participation agreements	(10,596,545)	(8,514,804)
Interest expense on repurchase agreement payable	(142,495)	(3,727,466)
Interest expense on mortgage loan payable	(2,449,239)	(2,976,913)
Interest expense on revolving line of credit	(911,811)	(1,398,103)
Interest expense on term loan payable	(6,835,877)	(2,137,651)
Interest expense on unsecured notes payable	(3,173,673)	0
Interest expense on secured borrowing	(1,576,502)	(633,850)
Net loss on extinguishment of obligations under participation agreements	0	(319,453)
Net unrealized gains on marketable securities	22,500	111,494
Income from equity investment in unconsolidated investments	5,925,802	38,640
Realized loss on loan repayments	(517,989)	0
Realized gains on marketable securities	129,248	1,160,162
Other Nonoperating Income (Expense)	(20,126,581)	(18,397,944)
Net (loss) income	(12,355,727)	5,255,730
Series A preferred stock dividend declared	(15,624)	(15,624)
Net (loss) income allocable to common stock	$ (12,371,351)	$ 5,240,106
(Loss) earnings per share — basic and diluted	$ (0.63)	$ 0.28
Weighted-average shares — basic and diluted	19,487,460	18,813,066
Distributions declared per common share	$ 0.88	$ 1.16

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Consolidated Statements of Comprehensive Income Statement - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Statement of Other Comprehensive Income [Abstract]
Net (loss) income	$ (12,355,727)	$ 5,255,730
Other comprehensive loss
Net unrealized gains on marketable securities	0	192,919
Reclassification of net realized gains on marketable securities into earnings	0	(192,919)
Other comprehensive income	0	0
Total comprehensive Income	(12,355,727)	5,255,730
Series A preferred stock dividend declared	(15,624)	(15,624)
Comprehensive (loss) income attributable to common shares	$ (12,371,351)	$ 5,240,106

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Consolidated Statements of Changes in Equity - USD ($)	Total	Preferred Stock	Preferred Stock Series A Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income
Balance at beginning (Share) at Dec. 31, 2019			125	15,125,681
Balance beginning at Dec. 31, 2019	$ 247,543,733	$ 0	$ 125,000	$ 151,257	$ 301,727,297	$ (54,459,821)	$ 0
Issuance of common stock (Shares)				4,574,470
Issuance of common stock	75,379,993			$ 45,745	75,334,248
Repurchased of common stock (shares)				(212,691)
Repurchased of common stock	(3,620,000)			$ (2,127)	(3,617,873)
Distribution declared on common share	(21,218,767)					(21,218,767)
Distributions declared on preferred shares	(15,624)					(15,624)
Net (loss) income	5,255,730					5,255,730
Net unrealized gains on marketable securities	192,919						192,919
Reclassification of net realized gains on marketable securities into earnings	(192,919)						(192,919)
Balance at ending (Share) at Dec. 31, 2020			125	19,487,460
Balance ending at Dec. 31, 2020	303,325,065	0	$ 125,000	$ 194,875	373,443,672	(70,438,482)	0
Repurchased of common stock	0
Distribution declared on common share	(17,110,136)					(17,110,136)
Distributions declared on preferred shares	(15,624)					(15,624)
Net (loss) income	(12,355,727)					(12,355,727)
Net unrealized gains on marketable securities	0
Reclassification of net realized gains on marketable securities into earnings	0
Balance at ending (Share) at Dec. 31, 2021			125	19,487,460
Balance ending at Dec. 31, 2021	$ 273,843,578	$ 0	$ 125,000	$ 194,875	$ 373,443,672	$ (99,919,969)	$ 0

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Consolidated Statements of Shareholder Equity (Parentheticals) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Distributions declared per common share	$ 0.88	$ 1.16

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Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Net (loss) income	$ (12,355,727)	$ 5,255,730
Adjustments to reconcile net income to net cash provided by operating activities:
Paid-in-kind interest income, net	(1,000,028)	(2,937,909)
Depreciation and amortization	3,989,114	4,635,980
Provision for loan losses	10,904,163	3,738,758
Impairment charge	3,395,430	0
Lease termination fee income	0	(236,000)
Amortization of net purchase premiums on loans	61,390	57,155
Straight-line rent adjustments	(146,317)	(714,334)
Amortization of deferred financing costs	963,986	1,644,944
Amortization of discount on unsecured notes payable	248,108	0
Net loss on extinguishment of obligations under participation agreements	0	319,453
Amortization of above- and below-market rent intangibles	(392,161)	(1,027,129)
Amortization and accretion of investment-related fees, net	(264,697)	(4,140)
Amortization of above-market rent ground lease	(130,349)	(130,348)
Realized loss on loan repayments	517,989	0
Realized gains on marketable securities	(129,248)	(1,160,162)
Net unrealized gains on marketable securities	(22,500)	(111,494)
Income from equity investment in excess of distributions received	(1,276,726)	(38,640)
Changes in operating assets and liabilities:
Interest receivable	46,552	(632,790)
Due from related party	(2,605,639)	0
Other assets	574,832	(956,735)
Due to Manager	93,226	(409,927)
Unearned income	(215,075)	(490,233)
Interest payable	694,124	109,271
Accounts payable and accrued expenses	(2,704,472)	2,245,242
Other liabilities	3,860,844	(1,229,232)
Net cash provided by operating activities	4,106,819	7,927,460
Cash flows from investing activities:
Origination and purchase of loans	(252,437,733)	(108,488,411)
Proceeds from repayments of loans	196,780,456	66,144,729
Purchase of equity interests in unconsolidated investments	(32,177,108)	(35,862,692)
Purchase of marketable securities	(6,479,148)	(6,039,567)
Proceeds from sale of marketable securities	6,608,396	6,023,723
Net cash used in investing activities	(87,705,137)	(78,222,218)
Cash flows from financing activities:
Repayments of obligations under participation agreements	(101,722,161)	(5,855,759)
Proceeds from issuance of unsecured notes payable, net of discount	82,464,844	0
Proceeds from obligations under participation agreements	71,682,634	22,498,765
Proceeds from borrowings under repurchase agreement	44,569,600	22,860,134
Proceeds from borrowings under revolving line of credit	38,575,895	35,000,000
Distributions paid	(17,125,760)	(21,234,391)
Repayment of borrowings under the term loan	(16,585,001)
Proceeds from secured borrowing	16,239,256	18,281,848
Repayment of mortgage principal	(12,057,533)	(594,255)
Proceeds from borrowings under the term loan	2,764,020	107,584,451
Change in interest reserve and other deposits held on investments	(4,733,805)	(6,396,547)
Payment of financing costs	(2,295,347)	(2,361,369)
Repayment of borrowings under repurchase agreement	0	(103,994,570)
Repayment of borrowings under revolving line of credit	0	(35,000,000)
Payment for repurchase of common stock	0	(3,620,000)
Cash, cash equivalents and restricted cash at beginning of year	32,920,323	50,549,700
Cash, cash equivalents and restricted cash at end of year (Note 2)	$ 51,098,647	32,920,323
Terra Property Trust 2 Inc
Cash flows from financing activities:
Proceeds from issuance of common stock		16,897,074
Terra Offshore REIT
Cash flows from financing activities:
Proceeds from issuance of common stock		$ 8,600,000

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Consolidated Statements of Cash Flows Consolidated Statement of Cash Flows - Supplemental cash information - (Parenthetical) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Statement of Cash Flows [Abstract]
Cash paid for interest	$ 22,219,386	$ 16,317,378

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Consolidated Statement of Cash Flow - Merger (Parenthetical)	2 Months Ended
	Mar. 01, 2020 USD ($) $ / shares shares
Terra Fund 7
Common Stock, Par or Stated Value Per Share | $ / shares	$ 0.01
Terra Property Trust 2 Inc
Equity issued in the Merger	$ 34,630,615
Proceeds from equity issued in the Merger	16,897,074
Business Combination Consideration	17,733,541
Loans held for investment acquired through participation	17,688,741
Interest receivable	134,543
Other assets	18,384
Accounts payable and accrued expenses	(57,433)
Due to Manager	(50,694)
Net Assets Exchanged	$ 17,733,541
Common Stock, Par or Stated Value Per Share | $ / shares	$ 0.01
Terra Fund 7
Business Combination Common Stock Shares | shares	2,116,785.76

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Consolidated Statements of Cash Flows - Non-cash Proceeds from Issuance of Common Stock to TIF3 REIT (Parenthetical)	Mar. 02, 2020 USD ($)
Terra Offshore Funds REIT
Equity issued in the Merger	$ 40,749,378
Proceeds from equity issued to Terra Offshore REIT	8,600,000
Business Combination Consideration	32,149,378
Loans held for investment acquired through participation	32,112,257
Interest receivable	270,947
Due to Manager	(233,826)
Net Assets Exchanged	$ 32,149,378

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Consolidated Statements of Cash Flows - Non-cash Proceeds from Issuance of Common Stock to TIF3 REIT - Narrative (Parenthetical) - Terra Offshore Funds REIT	Mar. 02, 2020 USD ($) shares
Business Combination Common Stock Shares | shares	2,457,684.59
Loans held for investment acquired through participation	$ 32,112,257
Proceeds from issuance of common stock	$ 8,600,000

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Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows - Supplemental Non-Cash Investing Activities - Lease termination (Parenthetical)	Dec. 31, 2021 USD ($)
Total assets	$ 693,542,158
Below Market Lease, Net	(9,709,710)
Contract Termination
Cash	142,620
Furniture and Fixtures	236,000
Total assets	378,620
In-place lease intangible assets	869,694
Below Market Lease, Net	(616,392)
Rent receivable	125,318
Net Assets	$ 378,620

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Business

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business

Note 1. Business

    Terra Property Trust, Inc. (and, together with its consolidated subsidiaries, the “Company” or “Terra Property Trust”) was incorporated under the general corporation laws of the State of Maryland on December 31, 2015. Terra Property Trust is a real estate credit focused company that originates, structures, funds and manages commercial real estate investments, including mezzanine loans, first mortgage loans, subordinated mortgage loans and preferred equity investments. The Company’s loans finance the acquisition, construction, development or redevelopment of quality commercial real estate in the United States. The Company focuses on the origination of middle market loans in the approximately $10 million to $50 million range, to finance properties in primary and secondary markets.

    On January 1, 2016, Terra Secured Income Fund 5, LLC (“Terra Fund 5”), the Company’s then parent, contributed its consolidated portfolio of net assets to the Company pursuant to a contribution agreement in exchange for shares of the Company’s common stock. Upon receipt of the contribution of the consolidated portfolio of net assets from Terra Fund 5, the Company commenced its operations on January 1, 2016. On March 2, 2020, the Company engaged in a series of transactions pursuant to which the Company issued an aggregate of 4,574,470.35 shares of its common stock in exchange for the settlement of an aggregate of $49.8 million of participation interests in loans held by the Company, cash of $25.5 million and other working capital. As of December 31, 2021, Terra JV, LLC (“Terra JV”) held 87.4% of the issued and outstanding shares of the Company's common stock with the remainder held by Terra Offshore REIT (Note 3).

    The Company has elected to be taxed, and to qualify annually thereafter, as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), commencing with the taxable year ended December 31, 2016. As a REIT, the Company is not subject to federal income taxes on income and gains distributed to the stockholders as long as certain requirements are satisfied, principally relating to the nature of income and the level of distributions, as well as other factors. The Company also operates its business in a manner that permits it to maintain its exemption from registration as an “investment company” under the Investment Company Act of 1940, as amended.

    The Company’s investment activities are externally managed by Terra REIT Advisors, LLC (“Terra REIT Advisors” or the “Manager”), a subsidiary of the Company’s sponsor, Terra Capital Partners, LLC (“Terra Capital Partners”), pursuant to a management agreement (the “Management Agreement”), under the oversight of the Company’s board of directors (Note 8). The Company does not currently have any employees and does not expect to have any employees. Services necessary for the Company’s business are provided by individuals who are employees of the Manager or by individuals who were contracted by the Company or by the Manager to work on behalf of the Company pursuant to the terms of the Management Agreement. On April 1, 2021, Mavik Capital Management, LP (“Mavik”), an entity controlled by Vikram S. Uppal, the Chief Executive Officer of the Company, completed a series of related transactions that resulted in all of the outstanding interests in Terra Capital Partners, being acquired by Mavik for a combination of cash and interests in Mavik (the “Recapitalization”). No amendments or other modifications were made to the Management Agreement in connection with the Recapitalization, and the Manager and its personnel continue to serve as the external manager of the Company pursuant to the terms of the Management Agreement.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

    The consolidated financial statements include all of the Company’s accounts and those of its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation.

The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (“VIE”) or voting interest model. The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model. Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity.

The Company accounts for investments in which it has significant influence but not a controlling financial interest using the equity method of accounting (see Note 5).

VIE Model

An entity is considered to be a VIE if any of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) the holders of the equity investment at risk, as a group, lack either the direct or indirect ability through voting rights or similar rights to make decisions that have a significant effect on the success of the entity or the obligation to absorb the entity’s expected losses or right to receive the entity’s expected residual returns, or (c) the voting rights of some equity investors are disproportionate to their obligation to absorb losses of the entity, their rights to receive returns from an entity, or both and substantially all of the entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights.

Under the VIE model, limited partnerships are considered a VIE unless the limited partners hold substantive kick-out or participating rights over the general partner. The Company consolidates entities that are VIEs when the Company determines it is the primary beneficiary. Generally, the primary beneficiary of a VIE is a reporting entity that has (a) the power to direct the activities that most significantly affect the VIE’s economic performance, and (b) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE.

Loans Held for Investment

    The Company originates, acquires, and structures real estate-related loans generally to be held to maturity. Loans held for investment are carried at the principal amount outstanding, adjusted for the accretion of discounts on investments and exit fees, and the amortization of premiums on investments and origination fees. The Company’s preferred equity investments, which are economically similar to mezzanine loans and subordinate to any loans but senior to common equity, are accounted for as loans held for investment. Loans are carried at cost less allowance for loan losses.

Allowance for Loan Losses

    The Company’s loans are typically collateralized by either the sponsors’ equity interest in the real estate properties or the underlying real estate properties. As a result, the Company regularly evaluates the extent and impact of any credit migration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan-by-loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations and/or reserve balances are sufficient to cover the debt service requirements currently and into the future; (ii) the ability of the borrower to refinance the loan; and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of the sponsor as well as its competency in managing and operating the real estate property. In addition, the Company considers the overall economic environment, real estate sector, and geographic sub-market in which the borrower operates. Such analyses are completed and reviewed by asset management and finance personnel, who utilize various data sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, the capitalization and discount rates; (ii) site inspections; and (iii) current credit spreads and discussions with market participants.

    The Manager performs a quarterly evaluation for possible impairment of the Company’s portfolio of loans. A loan is impaired if it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan. Impairment is measured based on the present value of expected future cash flows or the fair value of the collateral if the loan is collateral dependent. Upon measurement of impairment, the Company records an allowance to reduce the carrying value of the loan with a corresponding charge to net income.

    In conjunction with the quarterly evaluation of loans not considered impaired, the Manager assesses the risk factors of each loan and assigns each loan a risk rating between 1 and 5, which is an average of the numerical ratings in the following categories: (i) sponsor capability and financial condition; (ii) loan and collateral performance relative to underwriting; (iii) quality and stability of collateral cash flows and/or reserve balances; and (iv) loan to value. Based on a 5-point scale, the Company’s loans are rated “1” through “5”, from less risk to greater risk, as follows:

Risk Rating	Description
1	Very low risk
2	Low risk
3	Moderate/average risk
4	Higher risk
5	Highest risk

    The Company records an allowance for loan losses equal to (i) 1.5% of the aggregate carrying amount of loans rated as a “4”, plus (ii) 5% of the aggregate carrying amount of loans rated as a “5”, plus (iii) impaired loan reserves, if any.

    There may be circumstances where the Company modifies a loan by granting the borrower a concession that it might not otherwise consider when a borrower is experiencing financial difficulty or is expected to experience financial difficulty in the foreseeable future. Such concessionary modifications are classified as troubled debt restructurings (“TDR”s) unless the modification solely results in a delay in a payment that is insignificant. Loans classified as TDRs are considered impaired loans for reporting and measurement purposes.

Equity Investment in Unconsolidated Investments

The Company accounts for its equity interests in unconsolidated investments under the equity method of accounting, i.e., at cost, increased or decreased by its share of earnings or losses, less distributions, plus contributions and other adjustments required by equity method accounting.

The Company evaluates its equity investment unconsolidated investments on a periodic basis to determine if there are any indicators that the value of its equity investments may be impaired and whether or not that impairment is other-than-temporary. To the extent an impairment has occurred and is determined to be other-than-temporary, the Company measures the charge as the excess of the carrying value of its investment over its estimated fair value, which is determined by calculating its share of the estimated fair market value of the underlying net assets based on the terms of the applicable partnership or joint venture agreements.

Marketable Securities

    The Company from time to time invests in short term debt and equity securities. These securities are classified as available-for-sale and are carried at fair value. Changes in the fair value of equity securities are recognized in earnings. Changes in the fair value of debt securities are reported in other comprehensive income until a gain or loss on the securities is realized.

Real Estate Owned, Net

    Real estate acquired is recorded at its estimated fair value at acquisition and is shown net of accumulated depreciation and impairment charges.

    Acquisition of properties generally are accounted for as asset acquisitions. Under asset acquisition accounting, the costs to acquire real estate, including transaction costs, are accumulated and then allocated to individual assets and liabilities acquired based upon their relative fair value. The Company allocates the purchase price of its real estate acquisitions to land, building, tenant improvements, acquired in-place leases, intangibles for the value of any above or below market leases at fair value and to any other identified intangible assets or liabilities. The Company amortizes the value allocated to in-place leases over the remaining lease term, which is reported in depreciation and amortization expense on its consolidated statements of operations. The value allocated to above or below market leases are amortized over the remaining lease term as an adjustment to rental income.

    Real estate assets are depreciated using the straight-line method over their estimated useful lives: buildings and improvements - not to exceed 40 years, and tenant improvements - shorter of the lease term or life of the asset. Ordinary repairs and maintenance which are not reimbursed by the tenants are expensed as incurred. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their estimated useful life.

    Management reviews the Company’s real estate for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The review of recoverability is based on estimated future cash flows and the estimated liquidation value of such real estate assets, and provide for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the real estate assets. If impaired, the real estate asset will be written down to its estimated fair value.

Leases

    The Company determines if an arrangement is a lease at inception. Operating leases in which the Company is the lessee are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets. 

    ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s lease typically does not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made in advance and excludes lease incentives if there were any. The Company’s lease term may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Revenue Recognition

    Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

    Interest Income: Interest income is accrued based upon the outstanding principal amount and contractual terms of the loans and preferred equity investments that the Company expects to collect and it is accrued and recorded on a daily basis. Discounts and premiums on investments purchased are accreted or amortized over the expected life of the respective loan using the effective yield method, and are included in interest income in the consolidated statements of operations. Loan origination fees and exit fees, net of portions attributable to obligations under participation agreements, are capitalized and amortized or accreted to interest income over the life of the investment using the effective yield method. Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in the opinion of the Manager, recovery of income and principal becomes doubtful. Outstanding interest receivable is assessed for recoverability. Interest is then recorded on the basis of cash received until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability.

    The Company holds loans in its portfolio that contain paid-in-kind (“PIK”) interest provisions. The PIK interest, which represents contractually deferred interest that is added to the principal balance that is due at maturity, is recorded on the accrual basis.

    Real Estate Operating Revenues: Real estate operating revenue is derived from leasing of space to various types of tenants. The leases are for fixed terms of varying length and generally provide for annual rent increases and expense reimbursements to be paid in monthly installments. Lease revenue, or rental income from leases, is recognized on a straight-line basis over the term of the respective leases. Additionally, the Company recorded above- and below-market lease intangibles, which are included in real estate owned, net, in connection with the acquisition of the real estate properties. These intangible assets and liabilities are amortized to lease revenue over the remaining contractual lease term.

    Other Revenues: Prepayment fee income is recognized as prepayments occur. All other income is recognized when earned.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments, with original maturities of ninety days or less when purchased, as cash equivalents. Cash and cash equivalents are exposed to concentrations of credit risk. The Company maintains all of its cash at financial institutions which, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation.

    Restricted cash represents cash held as additional collateral by the Company on behalf of the borrowers related to the investments in loans or preferred equity instruments for the purpose of such borrowers making interest and property-related operating payments. Restricted cash is not available for general corporate purposes. The related liability is recorded in “Interest reserve and other deposits held on investments” on the consolidated balance sheets.

    Cash held in escrow by lender represents amounts funded to an escrow account for debt services and tenant improvements.

    The following table provides a reconciliation of cash, cash equivalents and restricted cash in the Company’s consolidated balance sheets to the total amount shown in its consolidated statements of cash flows:

	December 31,
	2021		2020
Cash and cash equivalents	$	35,783,956	$	18,607,952
Restricted cash	7,411,811		12,145,616
Cash held in escrow by lender	7,902,880		2,166,755
Total cash, cash equivalents and restricted cash shown in the consolidated    statements of cash flows	$	51,098,647	$	32,920,323

 Participation Interests

Loan participations from the Company which do not qualify for sale treatment remain on the Company’s consolidated balance sheets and the proceeds are recorded as obligations under participation agreements. For the investments for which participation has been granted, the interest earned on the entire loan balance is recorded within “Interest income” and the interest related to the participation interest is recorded within “Interest expense from obligations under participation agreements” in the consolidated statements of operations. Interest expense from obligations under participation agreement is reversed when recovery of interest income on the related loan becomes doubtful. See “Obligations under Participation Agreements” in Note 9 for additional information.

Term Loan

    The Company finances certain of its senior loans through borrowings under an indenture and credit agreement. The Company accounts for the borrowings as a term loan, which is carried at the contractual amount (cost), net of unamortized deferred financing fees.

Repurchase Agreement

The Company financed certain of its senior loans through repurchase transactions under a master repurchase agreement. The Company accounted for the repurchase transactions as secured borrowing transactions, which are carried at their contractual amounts (cost), net of unamortized deferred financing fees.

Fair Value Measurements

    United States generally accepted accounting principles (“U.S. GAAP”) establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The Company has not elected the fair value option for its financial instruments, including loans held for investment, loans held for investment acquired through participation, obligations under participation agreements, secured borrowing, unsecured notes, mortgage loan payable, term loan payable, repurchase agreement payment and revolving line of credit. Such financial instruments are carried at cost, less impairment, where applicable. Marketable securities are financial instruments that are reported at fair value.

Deferred Financing Costs

    Deferred financing costs represent fees and expenses incurred in connection with obtaining financing for investments. These costs are presented in the consolidated balance sheets as a direct deduction of the debt liability to which the costs pertain. These costs are amortized using the effective interest method and are included in interest expense on the applicable borrowings in the consolidated statements of operations over the life of the borrowings.

Income Taxes

    The Company has elected to be taxed as a REIT under the Internal Revenue Code commencing with the taxable year ended December 31, 2016. In order to qualify as a REIT, the Company is required, among other things, to distribute at least 90% of its REIT net taxable income to the stockholders and meet certain tests regarding the nature of its income and assets. As a REIT, the Company is not subject to federal income taxes on income and gains distributed to the stockholders as long as certain requirements are satisfied, principally relating to the nature of income and the level of distributions, as well as other factors. If the Company fails to continue to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal and state income taxes at regular corporate rates (including any

applicable alternative minimum tax for taxable years before 2018) beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years. Any gains from the sale of foreclosed properties within two years are subject to U.S. federal and state income taxes at regular corporate rates. As of December 31, 2021, the Company has satisfied all the requirements for a REIT.

The Company did not have any uncertain tax positions that met the recognition or measurement criteria of Accounting Standards Codification (“ASC”) 740-10-25, Income Taxes, nor did the Company have any unrecognized tax benefits as of the periods presented herein. The Company recognizes interest and penalties, if any, related to unrecognized tax liabilities as income tax expense in its consolidated statements of operations. For the years ended December 31, 2021 and 2020, the Company did not incur any interest or penalties. Although the Company files federal and state tax returns, its major tax jurisdiction is federal. The Company’s 2018-2020 federal tax returns remain subject to examination by the Internal Revenue Service.

Earnings Per Share

    The Company has a simple equity capital structure with only common stock and preferred stock outstanding. As a result, earnings per share, as presented, represent both basic and dilutive per-share amounts for the periods presented in the consolidated financial statements. Income per basic share of common stock is calculated by dividing net income allocable to common stock by the weighted-average number of shares of common stock issued and outstanding during such period.

Use of Estimates

    The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates, and those differences could be material.

The coronavirus (“COVID-19”) pandemic has had a significant impact on local, national and global economies and has resulted in a world-wide economic slowdown. However, after two years into the COVID-19 pandemic, the real estate market has started to recover from the dislocation it experienced over the past year. A strong pace of vaccination along with aggressive fiscal stimulus, has improved the outlook for the real estate market. The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its investments and operations. The Company believes the estimates and assumptions underlying its financial statements are reasonable and supportable based on the information available as of December 31, 2021; however, the extent to which the COVID-19 pandemic may impact the Company’s investments and operations going forward will depend on future developments, which are highly uncertain and cannot be predicted with confidence. These developments include the duration of the outbreak, the impact of the global vaccination effort, any new strains of the virus that are resistant to available vaccines, the impact of government stimulus, new information that may emerge concerning the severity of the COVID-19 pandemic, and actions taken by federal, state and local agencies as well as the general public to contain the COVID-19 pandemic or treat its impact, among others. Accordingly, any estimates and assumptions as of December 31, 2021 are inherently less certain than they would be absent the current and potential impacts of the COVID-19 pandemic.

Segment Information

    The Company’s primary business is originating, acquiring and structuring real estate-related loans related to high quality commercial real estate. From time to time, the Company may acquire real estate encumbering the senior loans through foreclosure. However, management treats the operations of the real estate acquired through foreclosure as the continuation of the original senior loans. The Company operates in a single segment focused on mezzanine loans, other loans and preferred equity investments, and to a lesser extent, owning and managing real estate.

Recent Accounting Pronouncements

    In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. In April 2019, the FASB issued additional amendments to clarify the scope of ASU 2016-13 and address issues related to accrued interest receivable balances, recoveries, variable interest rates and prepayments, among other things. In May 2019, the FASB issued ASU 2019-05 — Targeted Transition Relief, which provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. In October 2019, the FASB decided that for smaller reporting companies, ASU 2016-13 and related amendments will be effective for fiscal years beginning

after December 15, 2022, including interim periods within those fiscal years. The Company meets the definition of a smaller reporting company under the regulation of the Securities and Exchange Commission. As such, the Company will adopt this ASU and related amendments on January 1, 2023. Management is currently evaluating the impact this change will have on the Company’s consolidated financial statements and disclosures.

    London Interbank Offered Rate (“LIBOR”) is a benchmark interest rate referenced in a variety of agreements that are used by all types of entities. In July 2017, the U.K. Financial Conduct Authority, which regulates the LIBOR administrator, ICE Benchmark Administration Limited (“IBA”), announced that it would cease to compel banks to participate in setting LIBOR as a benchmark by the end of 2021, which has subsequently been delay to June 30, 2023. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) — Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition (“ASU 2021-01”). ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. In the event LIBOR is unavailable, the Company’s investment documents provide for a substitute index, on a basis generally consistent with market practice, intended to put the Company in substantially the same economic position as LIBOR. As a result, the Company does not expect the reference rate reform and the adoption of ASU 2020-04 and ASU 2021-01 to have a material impact on its consolidated financial statements and disclosures.

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Merger and Issuance of Common Stock to Terra Offshore REIT

12 Months Ended

Dec. 31, 2021

Business Combinations [Abstract]

Merger and Issuance of Common Stock to Terra Offshore REIT

Note 3. Merger and Issuance of Common Stock to Terra Offshore REIT

Merger

    On February 28, 2020, the Company entered into the Merger Agreement pursuant to which TPT2 was merged with and into the Company, with the Company continuing as the surviving corporation, effective March 1, 2020. In connection with the Merger, each share of common stock, par value $0.01 per share, of TPT2 issued and outstanding immediately prior to the effective time of the Merger was converted into the right to receive from the Company a number of shares of common stock, par value $0.01 per share, of the Company equal to an exchange ratio, which was 1.2031. The exchange ratio was based on the relative net asset values of the Company and TPT2 as of December 31, 2019 as adjusted to reflect changes in the net working capital of each of the Company and TPT2 during the period from January 1, 2020 through March 1, 2020, the effective time for the Merger. For purposes of determining the respective fair values of the Company and TPT2, the value of the loans (or participation interests therein) held by each of the Company and TPT2 was the value of such loans (or participation interests) as set forth in the audited financial statements of the Company as of and for the year ended December 31, 2019. As a result, Terra Fund 7, the sole stockholder of TPT2, received 2,116,785.76 shares of common stock of the Company as consideration in the Merger. The shares of common stock were issued in a private placement in reliance on Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations promulgated thereunder.

    The following table presents a summary of the consideration exchanged and settlement of the Company’s obligations under participation agreements as a result of the Merger:

Total Consideration
Equity issued in the Merger	$	34,630,615
	$	34,630,615
Net Assets of TPT2 Received in the Merger
Loans held for investment acquired through participation	$	17,688,741
Cash and cash equivalents	16,897,074
Interest receivable	134,543
Other assets	18,384
Accounts payable and accrued expenses	(57,433)
Due to Manager	(50,694)
Total identifiable net assets	$	34,630,615

    The fair value of the 2,116,785.76 shares of the Company’s stock issued in the Merger as consideration paid for TPT2 was derived from the fair value per share of the Company as of December 31, 2019 as adjusted to reflect the change in the net

working capital of the Company during the period from January 1, 2020 through March 1, 2020, the effective time of the Merger.

    In connection with the Merger, the size of the board of directors of the Company was reduced from eight directors to four directors, with Andrew M. Axelrod, Vikram S. Uppal, Roger H. Beless and Michael L. Evans continuing as directors of the Company. On November 10, 2021, Andrew M. Axelrod, resigned as the Company’s director effectively immediately. Following Mr. Axelrod’s resignation, the size of the board of directors of the Company was reduced from four directors to three directors.

Issuance of Common Stock to Terra Offshore REIT

    In addition, on March 2, 2020, the Company entered into two separate contribution agreements, one by and among the Company, Terra Offshore REIT and TIFI, and another by and among the Company, Terra Offshore REIT and Fund 5 International, pursuant to which the Company issued 2,457,684.59 shares of common stock of the Company to Terra Offshore REIT in exchange for the settlement of $32.1 million of participation interests in loans also held by the Company, $8.6 million in cash and other net working capital. The shares of common stock were issued in a private placement in reliance on Section 4(a)(2) under the Securities Act and the rules and regulations promulgated thereunder.

    The fair value of the 2,457,684.59 shares of the Company’s stock issued in the transaction as consideration paid for Terra Offshore REIT was derived from the fair value per share of the Company as of December 31, 2019, which was the most recently determined fair value per share of the Company.

    The following table presents a summary of the consideration exchanged and settlement of the Company’s obligations under participation agreements as a result of the Issuance of Common Stock to Terra Offshore REIT:

Total Consideration
Equity issued to Terra Offshore REIT	$	40,749,378
	$	40,749,378
Net Assets of Terra Offshore REIT Received
Investments through participation interest, at fair value	$	32,112,257
Cash and cash equivalents	8,600,000
Interest receivable	270,947
Due to Manager	(233,826)
Total identifiable net assets	$	40,749,378

On April 29, 2020, the Company repurchased 212,691 shares of common stock at a price of $17.02 per share that the Company had previously sold to Terra Offshore REIT on September 30, 2019 (Note 8).

Terra JV, LLC

    Prior to the completion of the Merger and the Issuance of Common Stock to Terra Offshore REIT transactions described above, Terra Fund 5 owned approximately 98.6% of the issued and outstanding shares of the Company’s common stock indirectly through its wholly owned subsidiary, Terra JV, of which Terra Fund 5 was the sole managing member, and the remaining issued and outstanding shares of the Company’s common stock were owned by Terra Offshore REIT.

    As described above, the Company acquired TPT2 in the Merger and, in connection with such transaction, Terra Fund 7 contributed the shares of the Company’s common stock received as consideration in the Merger to Terra JV and became a co-managing member of Terra JV pursuant to the amended and restated operating agreement of Terra JV, dated March 2, 2020 (the “JV Agreement”). The JV Agreement and related stockholders agreement between Terra JV and the Company, dated March 2, 2020, provide for the joint approval of Terra Fund 5 and Terra Fund 7 with respect to certain major decisions that are taken by Terra JV and the Company.

    On March 2, 2020, the Company, Terra Fund 5, Terra JV and Terra REIT Advisors also entered into the Amended and Restated Voting Agreement (the “Voting Agreement”), pursuant to which Terra Fund 5 assigned its rights and obligations under the Voting Agreement to Terra JV. Consistent with the original voting agreement dated February 8, 2018, for the period that Terra REIT Advisors remains the external manager of the Company, Terra REIT Advisors will have the right to nominate

two individuals to serve as directors of the Company and, until Terra JV no longer holds at least 10% of the outstanding shares of the Company’s common stock, Terra JV will have the right to nominate one individual to serve as a director of the Company.

    As of December 31, 2021, Terra JV owns 87.4% of the issued and outstanding shares of the Company’s common stock with the remainder held by Terra Offshore REIT, and Terra Fund 5 and Terra Fund 7 own an 87.6% and 12.4% interest, respectively, in Terra JV.

Net Loss on Extinguishment of Obligations Under Participation Agreements

    As discussed in Note 7, in the normal course of business, the Company may enter into participation agreements with related parties, primarily other affiliated funds managed by the Manager, and to a lesser extent, unrelated parties. The obligations under participation agreements were released as a result of the Merger and the Issuance of Common Stock to Terra Offshore REIT. In connection with these transactions, the Company recognized a net loss of $0.3 million for the three months ended March 31, 2020, which was primarily related to transaction costs incurred in connection with both transactions.

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Loans Held for Investment

12 Months Ended

Dec. 31, 2021

Receivables [Abstract]

Loans Held for Investment

Note 4. Loans Held for Investment

Portfolio Summary

The following table provides a summary of the Company’s loan portfolio as of December 31, 2021 and 2020:

	December 31, 2021									December 31, 2020
	Fixed Rate			Floating Rate (1)(2)(3)			Total			Fixed Rate			Floating Rate (1)(2)(3)			Total
Number of loans	6			15			21			6			14			20
Principal balance	$	74,880,728		$	405,270,423		$	480,151,151		$	56,335,792		$	367,838,966		$	424,174,758
Carrying value	$	75,520,212		$	394,153,102		$	469,673,314		$	56,464,310		$	365,816,205		$	422,280,515
Fair value	$	75,449,410		$	391,752,209		$	467,201,619		$	56,284,334		$	363,122,860		$	419,407,194
Weighted-average coupon rate	12.39		%	7.01		%	7.85		%	12.17		%	7.95		%	8.51		%
Weighted-average remaining  term (years)	1.93			1.45			1.53			1.78			1.44			1.48

_______________

(1)These loans pay a coupon rate of LIBOR plus a fixed spread. Coupon rate shown was determined using LIBOR of 0.10% and 0.14% as of December 31, 2021 and 2020, respectively.

(2)As of December 31, 2021 and 2020, amounts included $163.1 million and $184.2 million of senior mortgages used as collateral for $93.8 million and $107.6 million of borrowings under a term loan, respectively (Note 9). As of December 31, 2021, amounts also included $60.1 million of senior mortgages used as collateral for $38.6 million of borrowings under a revolving line of credit and $67.4 million of senior mortgages used as collateral for $44.6 million of borrowings under a repurchase agreement. Borrowings under the term loan bear interest at an annual rate of LIBOR plus 4.25% with a LIBOR floor of 1.00%. Borrowings under the revolving line of credit bear interest at a minimum rate of 4.0%. Borrowings under the repurchase agreement bears interest at an annual rate of LIBOR plus an applicable spread which ranges from 1.60% to 1.85%.

(3)As of December 31, 2021 and 2020, thirteen and twelve of these loans, respectively, are subject to a LIBOR floor.

Lending Activities

The following table presents the activities of the Company’s loan portfolio for the years ended December 31, 2021 and 2020:

	Loans Held for Investment		Loans Held for Investment through Participation Interests		Total
Balance, January 1, 2021	$	417,986,462	$	4,294,053	$	422,280,515
New loans made	240,130,367		12,307,366		252,437,733
Principal repayments received	(192,530,456)		(4,250,000)		(196,780,456)
PIK interest (1)	1,955,109		—		1,955,109
Net amortization of premiums on loans	(61,390)		—		(61,390)
Accrual, payment and accretion of investment-related fees and other,    net	1,405,206		(7,687)		1,397,519
Realized loss on loan repayments (2)(3)	(651,553)		—		(651,553)
Provision for loan losses	(10,904,163)		—		(10,904,163)
Balance, December 31, 2021	$	457,329,582	$	12,343,732	$	469,673,314

	Loans Held for Investment		Loans Held for Investment through Participation Interests		Total
Balance, January 1, 2020	$	375,462,222	$	3,150,546	$	378,612,768
New loans made	107,359,299		1,129,112		108,488,411
Principal repayments received	(66,144,729)		—		(66,144,729)
PIK interest (1)	4,442,759		—		4,442,759
Net amortization of premiums on loans	(61,391)		—		(61,391)
Accrual, payment and accretion of investment-related fees, net	667,060		14,395		681,455
Provision for loan losses	(3,738,758)		—		(3,738,758)
Balance, December 31, 2020	$	417,986,462	$	4,294,053	$	422,280,515

_______________

(1)Certain loans in the Company’s portfolio contain PIK interest provisions. The PIK interest represents contractually deferred interest that is added to the principal balance. PIK interest related to obligations under participation agreements amounted to $1.0 million and $1.5 million for the years ended December 31, 2021 and 2020, respectively.

(2)On September 2, 2021, the Company foreclosed on a hotel property encumbered by a first mortgage and the related subordinated mezzanine loan, both of which were held by the Company, with an aggregate principal balance $14.6 million. On September 23, 2021, the hotel property was sold to a third party for $13.8 million. The net proceeds from the sale, together with a payment under a contractual guarantee of $0.8 million from the borrower, were used to pay off both loans in full. In connection with the loan repayment, the related obligation under participation agreement of $6.4 million was simultaneously satisfied. In connection with the loan repayment, the Company recorded a loss of $0.4 million related to the write-off of the interest accrued but uncollected in the third quarter of 2021, excluding the amount attributable to obligations under participation agreements of $0.1 million.

(3)Amount also included realized loss of $0.3 million related to the TDR transaction described below.

Portfolio Information

    The tables below detail the types of loans in the Company’s loan portfolio, as well as the property type and geographic location of the properties securing these loans as of December 31, 2021 and 2020:

	December 31, 2021						December 31, 2020
Loan Structure	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
First mortgages	$	345,454,454	$	348,101,455	74.0	%	$	254,042,847	$	255,093,989	60.5	%
Preferred equity investments	92,252,340		92,400,572		19.7	%	141,590,632		142,002,144		33.6	%
Mezzanine loans	17,444,357		17,622,804		3.8	%	28,541,279		28,923,140		6.8	%
Credit facility	25,000,000		25,206,964		5.4	%	—		—		—	%
Allowance for loan losses	—		(13,658,481)		(2.9)	%	—		(3,738,758)		(0.9)	%
Total	$	480,151,151	$	469,673,314	100.0	%	$	424,174,758	$	422,280,515	100.0	%

	December 31, 2021						December 31, 2020
Property Type	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
Office	$	221,596,870	$	222,426,872	47.3	%	$	182,698,225	$	183,053,751	43.3	%
Multifamily	80,805,787		81,835,756		17.4	%	150,873,173		151,768,347		35.9	%
Hotel - full/select service	56,847,381		57,395,682		12.2	%	49,142,809		49,393,251		11.7	%
Industrial	32,000,000		32,206,964		6.9	%	7,000,000		7,000,000		1.7	%
Student housing	31,000,000		31,565,670		6.7	%	3,000,000		3,204,375		0.8	%
Infill land	28,960,455		28,923,827		6.2	%	10,442,567		10,537,512		2.5	%
Mixed use	28,940,658		28,977,024		6.2	%	16,767,984		16,767,984		4.0	%
Hotel - extended stay	—		—		—	%	4,250,000		4,294,053		1.0	%
Allowance for loan losses	—		(13,658,481)		(2.9)	%	—		(3,738,758)		(0.9)	%
Total	$	480,151,151	$	469,673,314	100.0	%	$	424,174,758	$	422,280,515	100.0	%

During the first quarter of 2021, the Company reclassified the property types of collateral on certain loans to multifamily to better reflect the tenant mix of each property. Additionally, the Company categorized hotel properties further to hotel - full/selected service and hotel - extended stay. The prior period amounts have been reclassified to conform to the current period presentation.

	December 31, 2021						December 31, 2020
Geographic Location	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
United States
California	$	234,968,151	$	237,015,597	50.4	%	$	200,279,688	$	200,990,328	47.6	%
New York	92,252,340		92,400,572		19.7	%	79,187,004		79,310,276		18.8	%
Georgia	53,289,288		53,536,884		11.4	%	74,116,787		74,505,752		17.6	%
North Carolina	44,492,971		44,704,699		9.5	%	33,242,567		33,438,806		7.9	%
Utah	28,000,000		28,420,056		6.1	%	—		—		—	%
Texas	13,625,000		13,725,690		2.9	%	3,848,712		3,887,200		0.9	%
Massachusetts	7,000,000		7,000,000		1.5	%	7,000,000		7,000,000		1.7	%
Washington	3,523,401		3,382,683		0.7	%	23,500,000		23,682,536		5.6	%
South Carolina	3,000,000		3,145,614		0.7	%	3,000,000		3,204,375		0.8	%
Allowance for loan losses	—		(13,658,481)		(2.9)	%	—		(3,738,758)		(0.9)	%
Total	$	480,151,151	$	469,673,314	100.0	%	$	424,174,758	$	422,280,515	100.0	%

Loan Risk Rating

    As described in Note 2, the Manager evaluates the Company’s loan portfolio on a quarterly basis or more frequently as needed. In conjunction with the quarterly review of the Company’s loan portfolio, the Manager assesses the risk factors of each loan, and assigns a risk rating based on a five-point scale with “1” being the lowest risk and “5” being the greatest risk.

    The following table allocates the principal balance and the carrying value of the Company’s loans based on the loan risk rating as of December 31, 2021 and 2020:

	December 31, 2021							December 31, 2020
Loan Risk Rating	Number of Loans	Principal Balance		Carrying Value		% of Total		Number of Loans	Principal Balance		Carrying Value		% of Total
1	—	$	—	$	—	—	%	—	$	—	$	—	—	%
2	2	25,000,000		25,041,124		5.2	%	1	7,000,000		7,000,000		1.6	%
3	15	349,273,811		352,164,409		72.9	%	14	323,696,475		325,284,285		76.4	%
4	1	60,012,639		60,012,639		12.4	%	3	72,861,587		73,079,804		17.2	%
5	—	—		—		—	%	1	3,848,712		3,887,200		0.9	%
Other (1)	3	45,864,701		46,113,623		9.5	%	1	16,767,984		16,767,984		3.9	%
	21	$	480,151,151	483,331,795		100.0	%	20	$	424,174,758	426,019,273		100.0	%
Allowance for loan losses				(13,658,481)							(3,738,758)
Total, net of allowance for loan losses				$	469,673,314						$	422,280,515

_______________

(1)Because these loans have an event of default, they are removed from the pool of loans on which a general allowance is calculated and are evaluated for collectibility individually. As of December 31, 2021 and 2020, the specific allowance for loan losses on these loans were $12.8 million and $2.5 million, respectively, as a result of a decline in the fair value of the respective collateral.

    As of December 31, 2021, the Company had one loan with a loan risk rating of “4” and no loans with a loan risk rating of “5” and recorded general allowance for loan losses of $0.6 million for the year ended December 31, 2021. As of December 31, 2020, the Company had three loans with a loan risk rating of “4” and one loan with a loan risk rating of “5” and recorded general allowance for loan losses of $1.3 million for the year ended December 31, 2020. Additionally, as of December 31, 2021 and 2020, the Company had three and one loans, respectively, deemed impaired and recorded specific allowance for loan losses of $10.3 million and $2.5 million, respectively, as a result of a decline in the value of the underlying collateral.

The following table presents the activity in the Company’s allowance for loan losses for the years ended December 31, 2021 and 2020:

	Years Ended December 31,
	2021		2020
Allowance for loan losses, beginning of period	$	3,738,758	$	—
Provision for loan losses	10,904,163		3,738,758
Charge-offs (1)	(984,440)		—
Recoveries	—		—
Allowance for loan losses, end of period	$	13,658,481	$	3,738,758

_______________

(1)Amount related to the TDR described below.

As of both December 31, 2021 and 2020, the Company had one loan that was in maturity default. Additionally, for the year ended December 31, 2021, the Company suspended interest income accrual of $3.6 million on three loans, because recovery of such income was doubtful. There was no suspension of such interest income for the year ended December 31, 2020.

Troubled Debt Restructuring

As of December 31, 2021, the Company had a recorded investment in troubled debt restructuring of $13.7 million. There were no such loans as of December 31, 2020.

Due to financial difficulty resulting from the COVID-19 pandemic, a borrower defaulted on interest payments in May 2020 on a $3.5 million mezzanine loan and the Company subsequently suspended the interest accrual. The Company purchased the senior loan from a third-party lender on September 3, 2021 in order to facilitate a refinancing. Subsequently on September 23, 2021, the senior and mezzanine loans were refinanced and the Company issued a new senior loan with a committed amount of $14.7 million, of which $13.6 million was funded at closing. The concession granted in the refinancing was the forgiveness of principal and accrued interest of $1.3 million on the mezzanine loan, of which $1.0 million was previously recorded as an allowance for loan losses, in addition to $0.4 million of nonaccrual interest. The Company classified the refinancing as a TDR as it met all the conditions to be considered a TDR pursuant to ASC 310-40.

The following table summarizes the recorded investment of TDR as of the date of restructuring:

Number of loans modified	1
Pre-modified recorded carrying value	$	18,503,470
Post-modified recorded carrying value (1)	$	13,625,000

_______________

(1)As of December 31, 2021, the principal balance of this loan was $13.6 million and the carrying value of this loan, which includes the present value of the exit fee, was $13.7 million. There is no allowance for loan losses recorded for this new senior loan.

Once classified as a TDR, the new senior loan is classified as an impaired loan until it is extinguished and the carrying value is evaluated at each reporting date for collectability based on the fair value of the underlying collateral. Since the fair value of the collateral is greater than the carrying value of the new senior loan, no specific allowance was recorded as of December 31, 2021. For the period ended December 31, 2021, interest income from the new senior loan was $0.3 million.

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Equity Investment in Unconsolidated Investments

12 Months Ended

Dec. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Equity Investment in a Limited Partnership

Note 5. Equity Investment in Unconsolidated Investments

The Company owns interests in a limited partnership and two joint ventures. The Company accounts for its interests in these investments under the equity method of accounting (Note 2). The Company classifies distributions received from equity method investments using the cumulative earnings approach. Distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities.

Equity Investment in a Limited Partnership

On August 3, 2020, the Company entered into a subscription agreement with Mavik Real Estate Special Opportunities Fund, LP (“RESOF”) (formerly known as Terra Real Estate Credit Opportunities Fund, LP) whereby the Company committed to fund up to $50.0 million to purchase a limited partnership interest in RESOF. RESOF’s primary investment objective is to generate attractive risk-adjusted returns by purchasing performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets. RESOF may also opportunistically originate high-yield mortgages or loans in real estate special situations including rescue financings, bridge loans, restructurings and bankruptcies (including debtor-in-possession loans). The general partner of RESOF is Mavik Real Estate Special Opportunities Fund GP, LLC (formerly known as Terra Real Estate Credit Opportunities Fund GP, LLC), which is a subsidiary of the Company’s sponsor, Terra Capital Partners. As of December 31, 2021 and 2020, the unfunded commitment was $15.1 million and $14.1 million, respectively.

The Company evaluated its equity interest in RESOF and determined it does not have a controlling financial interest and is not the primary beneficiary. Accordingly, the equity interest in RESOF is accounted for as an equity method investment. As of December 31, 2021 and 2020, the Company owned 50.0% and 90.3% of equity interest in RESOF, respectively. As of December 31, 2021 and 2020, the carrying value of the Company’s investment in RESOF was $40.5 million and $36.3 million, respectively. For the year ended December 31, 2021, the Company recorded equity income from RESOF of $6.2 million and

received distributions of $3.5 million from RESOF. For the year ended December 31, 2020, the Company recorded equity income from RESOF of $0.04 million and did not received any distributions.

In connection with the equity investment in RESOF, the Company paid origination fees to the Manager totaling $0.5 million, to be amortized to equity income on a straight-line basis over the life of RESOF.

The following tables present summarized financial information of the Company’s equity investment in RESOF. Amounts provided are the total amounts attributable to the investment and do not represent the Company’s proportionate share:

	December 31,
	2021		2020
Investments at fair value (cost of $107,261,022 and $44,174,031, respectively)	$	108,359,898	$	44,715,979
Other assets	5,484,087		5,331,840
Total assets	113,843,985		50,047,819
Revolving line of credit, net of financing costs	14,909,717		—
Obligations under participation agreement (proceeds of $14,252,357 and $6,295,100,     respectively)	14,351,617		6,347,478
Other liabilities	5,296,603		4,204,147
Total liabilities	34,557,937		10,551,625
Partners’ capital	$	79,286,048	$	39,496,194

	Years Ended December 31,
	2021		2020
Total investment income	$	11,769,083	$	239,837
Total expenses	2,381,145		614,362
Net investment income (loss)	9,387,938		(374,525)
Unrealized appreciation on investments	524,113		417,300
Net increase in partners' capital resulting from operations	$	9,912,051	$	42,775

Equity Investment in Joint Ventures

In the fourth quarter of 2021, the Company purchased equity interests in two joint ventures that invest in real estate properties. The Company evaluated its equity interests in the joint ventures and determined it does not have a controlling financial interest and is not the primary beneficiary. Accordingly, the equity interests in the joint ventures are accounted for as equity method investments. The following table presents the Company’s ownership interests in its equity investments in the joint ventures and their respective carrying values:

		Ownership Interest at December 31, 2021	Carrying Value at December 31,
Entity	Co-owner		2021		2020
LEL Arlington JV LLC	Third party	80%	$	23,949,044	$	—
LEL NW 49th JV LLC	Third party	80%	5,306,467		—
			$	29,255,511	$	—

The following tables present estimated combined summarized financial information of the Company’s equity investment in the joint ventures. Amounts provided are the total amounts attributable to the joint ventures and do not represent the Company’s proportionate share:

	December 31,
	2021		2020
Net investments in real estate	$	115,636,424	$	—
Other assets	4,856,249		—
Total assets	120,492,673		—
Mortgage loan payable	83,445,235		—
Other liabilities	1,305,572		—
Total liabilities	84,750,807		—
Members’ capital	$	35,741,866	$	—

	Years Ended December 31,
	2021		2020
Revenues	$	1,448,431	$	—
Expenses	1,752,076		—
Net loss	$	(303,645)	$	—

For the year ended December 31, 2021, the Company recorded equity loss from the joint ventures of $0.2 million and did not receive any distributions. There was no such equity income or loss recorded or distributions received for the year ended December 31, 2020. In connection with these investments, the Company paid origination fee to the Manager totaling $0.3 million, to be amortize to equity income over the life of the respective joint venture.

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Real Estate Owned, Net

12 Months Ended

Dec. 31, 2021

Real Estate [Abstract]

Real Estate Owned, Net

Note 6. Real Estate Owned, Net

Real Estate Activities

2021 — In September 2021, the Company signed a new lease for the vacant space in the office building. The lease commences on December 1, 2021 and has term of 10 years with an option to extend the lease for 5 years. Additionally, the lease provides for a fixed rental payment plus a percentage rent that is based on 6% of the gross sales of the tenant’s business. The lease also provides a 3% increase in rental payment every year.

In November 2021, the Company received notice from a tenant of their intention to terminate its lease effective November 30, 2022. In connection with the lease termination, the Company received a termination fee of $3.1 million, to be amortized to income over the remaining life of the lease.

For the year ended December 31, 2021, the Company recorded an impairment charge on $3.4 million on the 4.9 acres of adjacent land in order to reduce the carrying value of the land to its estimated fair value, which is the estimated selling price less the cost of sale.

2020 — In June 2020, the Company received a notice from a tenant occupying a portion of the office building that the Company acquired in July 2018 pursuant to a foreclosure of their intention to terminate the lease. In connection with the lease termination effective September 4, 2020, the Company received from the tenant lease termination fee of $0.4 million, which included approximately $0.2 million of cash and $0.2 million of the furniture and fixtures in the office space. The furniture and fixtures have a remaining useful life of 2.5 years and are being depreciated on a straight-line basis over the remaining useful life. Additionally, the Company wrote off the related unamortized in-place lease intangible assets of $0.9 million, unamortized below-market rent intangible liabilities of $0.6 million and rent receivable of $0.1 million. There was no gain or loss recognized on the lease termination.

Real Estate Owned, Net

    Real estate owned is comprised of 4.9 acres of adjacent land located in Pennsylvania and a multi-tenant office building, with lease intangible assets and liabilities, located in California. The following table presents the components of real estate owned, net:

	December 31, 2021						December 31, 2020
	Cost		Accumulated Depreciation/Amortization		Net		Cost		Accumulated Depreciation/Amortization		Net
Real estate:
Land	$	10,000,000	$	—	$	10,000,000	$	13,395,430	$	—	$	13,395,430
Building and building    improvements	51,725,969		(4,418,305)		47,307,664		51,725,969		(3,125,143)		48,600,826
Tenant improvements	1,854,640		(947,369)		907,271		1,854,640		(670,090)		1,184,550
Furniture and fixtures	236,000		(125,867)		110,133		236,000		(31,467)		204,533
Total real estate	63,816,609		(5,491,541)		58,325,068		67,212,039		(3,826,700)		63,385,339
Lease intangible assets:
In-place lease	14,982,538		(7,627,326)		7,355,212		15,852,232		(6,172,747)		9,679,485
Above-market rent	156,542		(59,983)		96,559		156,542		(42,427)		114,115
Total intangible assets	15,139,080		(7,687,309)		7,451,771		16,008,774		(6,215,174)		9,793,600
Lease intangible liabilities:
Below-market rent	(2,754,922)		1,496,125		(1,258,797)		(3,371,314)		1,702,800		(1,668,514)
Above-market ground lease	(8,896,270)		445,357		(8,450,913)		(8,896,270)		315,008		(8,581,262)
Total intangible liabilities	(11,651,192)		1,941,482		(9,709,710)		(12,267,584)		2,017,808		(10,249,776)
Total real estate	$	67,304,497	$	(11,237,368)	$	56,067,129	$	70,953,229	$	(8,024,066)	$	62,929,163

Real Estate Operating Revenues and Expenses

    The following table presents the components of real estate operating revenues and expenses that are included in the consolidated statements of operations:

	Years Ended December 31,
	2021		2020
Real estate operating revenues:
Lease revenue	$	7,167,049	$	8,150,041
Other operating income	1,727,942		2,273,522
Total	$	8,894,991	$	10,423,563
Real estate operating expenses:
Utilities	$	208,098	$	166,003
Real estate taxes	1,401,279		1,925,999
Repairs and maintenances	645,316		659,934
Management fees	271,303		224,732
Lease expense, including amortization of above-market ground lease (1)	2,084,402		1,134,152
Other operating expenses	393,495		394,299
Total	$	5,003,893	$	4,505,119

_______________

(1)As discussed in “Leases” below, the multi-tenant office building is subject to a ground lease, for which the rent resets every five years. The last rent reset was on November 1, 2020. Based on information available to the Company as of November 1, 2020, including the fact that there was a global pandemic with a potentially significant negative impact on real estate values, the Company estimated the value of the land was no greater than the value on the date of foreclosure and continued

to accrue and pay rent at the then-existing rate. On June 2, 2021, the third-party appraisal process was completed, resulting in an increase of the annual base rent to $2.1 million from $1.3 million. The increase in base rent was retroactive back to November 1, 2020. The Company accounted for the change in base rent as a change in accounting estimate; as a result, the increase in rent from November 2020 through March 2021 was recorded in the period in which the change occurred, which is June 2021. Had the new base rent been recorded on November 1, 2020, lease expense including amortization of above-market ground lease would have been $1.7 million for the year ended December 31, 2021 and total real estate operating expenses would have been $4.7 million for the year ended December 31, 2021.

Leases

    On July 30, 2018, the Company foreclosed on a multi-tenant office building in full satisfaction of a first mortgage and related fees and expenses. In connection with the foreclosure, the Company assumed four leases whereby the Company is the lessor to the leases. These four tenant leases had remaining lease terms ranging from 6.3 years to 8.8 years as of July 30, 2018 and provide for annual fixed rent increases. Each of the three tenant leases provides two options to renew the lease for five years and the remaining tenant lease provides one option to renew the lease for five years.

    In addition, the Company assumed a ground lease whereby the Company is the lessee (or a tenant) to the ground lease. The ground lease had a remaining lease term of 68.3 years and provides for a new base rent every 5 years based on the greater of the annual base rent for the prior lease year or 9% of the fair market value of the land. The next rent reset on the ground lease is scheduled for November 1, 2025. The Company is currently litigating with the landlord with respect to the appropriate determination of the fair value of the land, on which the ground rent is based. Since future rent increases on the ground lease are unknown, the Company did not include any potential future rent increases in calculating the present value of future rent payments. The ground lease does not provide for renewal options.

    On the date of foreclosure, the Company performed lease classification test on the tenant leases as well as the ground lease in accordance with ASC 840. The result of the lease classification test indicated that the tenant leases and the ground lease shall be classified as operating leases on the date of foreclosure.

Scheduled Future Minimum Rent Income 

    Scheduled future minimum rents, exclusive of renewals and expenses paid by tenants, under non-cancelable operating leases at December 31, 2021 are as follows: 

Years Ending December 31,	Total
2022	$	7,214,814
2023	4,235,538
2024	4,380,043
2025	792,925
2026	816,724
Thereafter	2,414,440
Total	$	19,854,484

Scheduled Annual Net Amortization of Intangibles 

    Based on the intangible assets and liabilities recorded at December 31, 2021, scheduled annual net amortization of intangibles for each of the next five calendar years and thereafter is as follows:

Years Ending December 31,	Net Decrease in Real Estate Operating Revenue (1)		Increase in Depreciation and Amortization (1)		Decrease in Rent Expense (1)		Total
2022	$	(926,553)	$	4,956,914	$	(130,348)	$	3,900,013
2023	(139,056)		1,093,878		(130,348)		824,474
2024	(139,056)		1,093,878		(130,348)		824,474
2025	17,556		87,121		(130,348)		(25,671)
2026	17,556		87,121		(130,348)		(25,671)
Thereafter	7,315		36,300		(7,799,173)		(7,755,558)
Total	$	(1,162,238)	$	7,355,212	$	(8,450,913)	$	(2,257,939)

_______________

(1)Amortization of below-market rent and above-market rent intangibles is recorded as an adjustment to lease revenues; amortization of in-place lease intangibles is included in depreciation and amortization; and amortization of above-market ground lease is recorded as a reduction to rent expense.

Supplemental Ground Lease Disclosures

    Supplemental balance sheet information related to the ground lease was as follows:    

	December 31,
	2021			2020
Operating lease
Operating lease right-of-use asset (1)	$	27,394,936		$	16,105,888
Operating lease liability	$	27,394,936		$	16,105,888
Weighted average remaining lease term — operating lease (years)	64.8			65.8
Weighted average discount rate — operating lease	7.6		%	7.9		%

_______________

(1)The operating lease ROU asset and liability were remeasured at June 30, 2021 based on the new base rent resulting from the ground rent reset.

    The component of lease expense for the ground lease was as follows:

	Years Ended December 31,
	2021		2020
Operating lease cost (1)	$	2,214,750	$	1,264,500

_______________

(1)The increase in operating lease cost was a result of the ground rent reset described above.

    Supplemental non-cash information related to the ground lease was as follows:

	Years Ended December 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liability:
Operating cash flows from an operating lease	$	2,214,750	$	1,264,500
Right-of-use asset obtained in exchange for lease obligations:
Operating lease	$	2,214,750	$	1,264,500

    Maturities of operating lease liability are as follows:

Years Ending December 31,	Operating Lease
2022	$	2,079,000
2023	2,079,000
2024	2,079,000
2025	2,079,000
2026	2,079,000
Thereafter	124,306,875
Total lease payments	134,701,875
Less: Imputed interest	(107,306,939)
Total	$	27,394,936

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Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 7. Fair Value Measurements

    The Company adopted the provisions of ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 established a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment, the characteristics specific to the investment, and the state of the marketplace (including the existence and transparency of transactions between market participants). Investments with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Investments measured and reported at fair value are classified and disclosed into one of the following categories based on the inputs as follows:

Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access.

Level 2 — Pricing inputs are other than quoted prices in active markets, including, but not limited to, quoted prices for similar assets and liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs.

      Level 3 — Significant unobservable inputs are based on the best information available in the circumstances, to the extent observable inputs are not available, including the Company’s own assumptions used in determining the fair value of investments. Fair value for these investments are determined using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance, and financing transactions subsequent to the acquisition of the investment. The inputs into the determination of fair value require significant management judgment.

     In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

As of December 31, 2021 and 2020, the Company has not elected the fair value option for its financial instruments, including loans held for investment, loans held for investment acquired through participation, obligations under participation agreements, secured borrowing, term loan payable, repurchase agreement payable, mortgage loan payable and revolving line of credit. Such financial instruments are carried at cost, less impairment or less net deferred costs, where applicable. Marketable securities are financial instruments that are reported at fair value.

Financial Instruments Carried at Fair Value on a Recurring Basis

    From time to time, the Company may invest in short-term debt and equity securities which are classified as available-for-sale securities, which are presented at fair value on the consolidated balance sheet. Changes in the fair value of equity securities are recognized in earnings. Changes in the fair value of debt securities are reported in other comprehensive income until the securities are realized.

The following tables present fair value measurements of marketable securities, by major class, as of December 31, 2021 and 2020, according to the fair value hierarchy:

	December 31, 2021
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Marketable Securities:
Equity securities	$	1,310,000	$	—	$	—	$	1,310,000
Total	$	1,310,000	$	—	$	—	$	1,310,000

	December 31, 2020
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Marketable Securities:
Equity securities	$	1,287,500	$	—	$	—	$	1,287,500
Total	$	1,287,500	$	—	$	—	$	1,287,500

    The following table presents the activities of the marketable securities for the periods presented.

	Years Ended December 31,
	2021		2020
Beginning balance	$	1,287,500	$	—
Purchases	6,479,148		6,039,567
Proceeds from sale	(6,608,396)		(6,023,723)
Reclassification of net realized gains on marketable securities into earnings	129,248		1,160,162
Unrealized gains on marketable securities	22,500		111,494
Ending balance	$	1,310,000	$	1,287,500

Financial Instruments Not Carried at Fair Value

The following table presents the carrying value, which represents the principal amount outstanding, adjusted for the accretion of purchase discounts on loans and exit fees, and the amortization of purchase premiums on loans and origination fees, and estimated fair value of the Company’s financial instruments that are not carried at fair value on the consolidated balance sheets:

		December 31, 2021						December 31, 2020
	Level	Principal Amount		Carrying Value		Fair Value		Principal Amount		Carrying Value		Fair Value
Loans:
Loans held for investment	3	$	467,843,785	$	470,988,063	$	454,840,551	$	419,924,758	$	421,725,220	$	415,113,225
Loans held for investment    acquired through    participation	3	12,307,366		12,343,732		12,361,068		4,250,000		4,294,053		4,293,969
Allowance for loan losses		—		(13,658,481)		—		—		(3,738,758)		—
Total loans		$	480,151,151	$	469,673,314	$	467,201,619	$	424,174,758	$	422,280,515	$	419,407,194
Liabilities:
Term loan payable	3	$	93,763,470	$	91,940,062	$	94,344,595	$	107,584,451	$	105,245,801	$	107,248,555
Unsecured notes payable	1	85,125,000		81,856,799		85,210,125		—		—		—
Repurchase agreement payable	3	44,569,600		43,974,608		44,569,600		—		—		—
Obligations under participation    agreements	3	42,048,294		42,232,027		41,475,060		71,266,303		71,581,897		70,693,207
Mortgage loan payable	3	31,962,692		32,134,295		32,192,785		44,020,225		44,117,293		44,348,689
Secured borrowing	3	34,521,104		34,586,129		34,425,029		18,281,848		18,187,663		17,037,032
Revolving line of credit    payable	3	38,575,895		38,186,472		38,575,895		—		—		—
Total liabilities		$	370,566,055	$	364,910,392	$	370,793,089	$	241,152,827	$	239,132,654	$	239,327,483

    The Company estimated that its other financial assets and liabilities, not included in the tables above, had fair values that approximated their carrying values at both December 31, 2021 and 2020 due to their short-term nature.

Valuation Process for Fair Value Measurement

    The fair value of the Company’s investment in equity securities and its unsecured notes payable is determined based on quoted prices in an active market and is classified as Level 1 of the fair value hierarchy.

    Market quotations are not readily available for the Company’s real estate-related loan investments, all of which are included in Level 3 of the fair value hierarchy, and therefore these investments are valued utilizing a yield approach, i.e. a discounted cash flow methodology to arrive at an estimate of the fair value of each respective investment in the portfolio using an estimated market yield. In following this methodology, investments are evaluated individually, and management takes into account, in determining the risk-adjusted discount rate for each of the Company’s investments, relevant factors, which may include available current market data on applicable yields of comparable debt/preferred equity instruments; market credit spreads and yield curves; the investment’s yield; covenants of the investment, including prepayment provisions; the portfolio company’s ability to make payments, net operating income and debt-service coverage ratio; construction progress reports and construction budget analysis; the nature, quality and realizable value of any collateral (and loan-to-value ratio); the forces that influence the local markets in which the asset (the collateral) is purchased and sold, such as capitalization rates, occupancy rates, rental rates and replacement costs; and the anticipated duration of each real estate-related loan investment.

The Manager designates a valuation committee to oversee the entire valuation process of the Company’s Level 3 loans. The valuation committee is comprised of members of the Manager’s senior management, deal and portfolio management teams, who meet on a quarterly basis, or more frequently as needed, to review the Company investments being valued as well as the inputs used in the proprietary valuation model. Valuations determined by the valuation committee are supported by pertinent data and, in addition to a proprietary valuation model, are based on market data, industry accepted third-party valuation models and discount rates or other methods the valuation committee deems to be appropriate. Because there is no readily available market for these investments, the fair values of these investments are approved in good faith by the Manager pursuant to the Company’s valuation policy.

    The fair values of the Company’s mortgage loan payable, secured borrowing, term loan payable and revolving line of credit are determined by discounting the contractual cash flows at the interest rate the Company estimates such arrangements would bear if executed in the current market.

The following table summarizes the valuation techniques and significant unobservable inputs used by the Company to value the Level 3 loans as of December 31, 2021 and 2020. The tables are not intended to be all-inclusive, but instead identify the significant unobservable inputs relevant to the determination of fair values.

	Fair Value at December 31, 2021		Primary Valuation Technique	Unobservable Inputs	December 31, 2021
Asset Category					Minimum		Maximum		Weighted Average
Assets:
Loans held for investment, net	$	454,840,551	Discounted cash flow	Discount rate	3.89	%	15.00	%	8.11	%
Loans held for investment acquired through    participation, net	12,361,068		Discounted cash flow	Discount rate	8.25	%	15.00	%	12.33	%
Total Level 3 Assets	$	467,201,619
Liabilities:
Term loan payable	$	94,344,595	Discounted cash flow	Discount rate	4.00	%	4.00	%	4.00	%
Repurchase agreement payable	44,569,600		Discounted cash flow	Discount rate	2.45	%	2.74	%	2.57	%
Obligations under participation agreements	41,475,060		Discounted cash flow	Discount rate	12.37	%	15.00	%	14.31	%
Mortgage loan payable	32,192,785		Discounted cash flow	Discount rate	6.08	%	6.08	%	6.08	%
Secured borrowing	34,425,029		Discounted cash flow	Discount rate	6.64	%	6.64	%	6.64	%
Revolving line of credit	38,575,895		Discounted cash flow	Discount rate	4.00	%	4.00	%	4.00	%
Total Level 3 Liabilities	$	285,582,964

	Fair Value at December 31, 2020		Primary Valuation Technique	Unobservable Inputs	December 31, 2020
Asset Category					Minimum		Maximum		Weighted Average
Assets:
Loans held for investment, net	$	415,113,225	Discounted cash flow	Discount rate	5.29	%	20.05	%	10.38	%
Loans held for investment acquired through    participation, net	4,293,969		Discounted cash flow	Discount rate	12.89	%	12.89	%	12.89	%
Total Level 3 Assets	$	419,407,194
Liabilities:
Term loan payable	$	107,248,555	Discounted cash flow	Discount rate	5.25	%	5.25	%	5.25	%
Obligations under participation agreements	70,693,207		Discounted cash flow	Discount rate	9.75	%	20.05	%	12.58	%
Mortgage loan payable	44,348,689		Discounted cash flow	Discount rate	6.08	%	6.08	%	6.08	%
Secured borrowing	17,037,032		Discounted cash flow	Discount rate	11.25	%	11.25	%	11.25	%
Total Level 3 Liabilities	$	239,327,483

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Related Party Transactions

12 Months Ended

Dec. 31, 2021

Related Party Transactions [Abstract]

Related Party Transactions

Note 8. Related Party Transactions

Management Agreement

The Company entered into a Management Agreement with the Manager whereby the Manager is responsible for its day-to-day operations. The Management Agreement runs co-terminus with the amended and restated operating agreement for Terra Fund 5, which is scheduled to terminate on December 31, 2023 unless Terra Fund 5 is dissolved earlier. The following table presents a summary of fees paid and costs reimbursed to the Manager in connection with providing services to the Company that are included on the consolidated statements of operations:

	Years Ended December 31,
	2021		2020
Origination and extension fee expense (1)(2)	$	2,729,598	$	1,383,960
Asset management fee	5,134,149		4,480,706
Asset servicing fee	1,181,924		1,008,256
Operating expenses reimbursed to Manager	6,916,371		6,041,075
Disposition fee (3)	1,006,302		504,611
Total	$	16,968,344	$	13,418,608

_______________

(1)Origination and extension fee expense is generally offset with origination and extension fee income. Any excess is deferred and amortized to interest income over the term of the loan.

(2)Amount for the years ended December 31, 2021 and 2020 excluded $0.3 million and $0.5 million of origination fee, respectively, paid to the Manager in connection with the Company’s equity investment in unconsolidated investments. These origination fees were capitalized to the carrying value of the unconsolidated investments as transaction costs.

(3)Disposition fee is generally offset with exit fee income and included in interest income on the consolidated statements of operations.

Origination and Extension Fee Expense

Pursuant to the Management Agreement, the Manager or its affiliates receives an origination fee in the amount of 1% of the amount used to originate, fund, acquire or structure real estate-related investments, including any third-party expenses related to such loans. In the event that the term of any real estate-related loan held by the Company is extended, the Manager also receives an extension fee equal to the lesser of (i) 1% of the principal amount of the loan being extended or (ii) the amount of fee paid to the Company by the borrower in connection with such extension.

Asset Management Fee

Under the terms of the Management Agreement, the Manager or its affiliates provides the Company with certain investment management services in return for a management fee. The Company pays a monthly asset management fee at an

annual rate of 1% of the aggregate funds under management, which includes the loan origination price or aggregate gross acquisition price, as defined in the Management Agreement, for each real estate related loan and cash held by the Company.

Asset Servicing Fee

The Manager or its affiliates receives from the Company a monthly servicing fee at an annual rate of 0.25% of the aggregate gross origination price or acquisition price, as defined in the Management Agreement, for each real estate-related loan held by the Company.

Transaction Breakup Fee

    In the event that the Company receives any “breakup fees,” “busted-deal fees,” termination fees, or similar fees or liquidated damages from a third-party in connection with the termination or non-consummation of any loan or disposition transaction, the Manager will be entitled to receive one-half of such amounts, in addition to the reimbursement of all out-of-pocket fees and expenses incurred by the Manager with respect to its evaluation and pursuit of such transactions. As of December 31, 2021 and 2020, the Company has not received any breakup fees.

Operating Expenses

The Company reimburses the Manager for operating expenses incurred in connection with services provided to the operations of the Company, including the Company’s allocable share of the Manager’s overhead, such as rent, employee costs, utilities, and technology costs.

Disposition Fee

Pursuant to the Management Agreement, the Manager or its affiliates receives a disposition fee in the amount of 1% of the gross sale price received by the Company from the disposition of any real estate-related loan, or any portion of, or interest in, any real estate-related loan. The disposition fee is paid concurrently with the closing of any such disposition of all or any portion of any real estate-related loan or any interest therein, which is the lesser of (i) 1% of the principal amount of the loan or debt-related loan prior to such transaction or (ii) the amount of the fee paid by the borrower in connection with such transaction. If the Company takes ownership of a property as a result of a workout or foreclosure of a loan, the Company will pay a disposition fee upon the sale of such property equal to 1% of the sales price.

Distributions Paid

For the years ended December 31, 2021 and 2020, the Company made distributions to Terra 5, Terra JV and Terra Offshore REIT totaling $17.1 million and $21.2 million, respectively, of which $14.6 million and $16.0 million were returns of capital, respectively (Note 11).

Due to Manager

    As of December 31, 2021 and 2020, approximately $2.4 million and $1.3 million was due to the Manager, respectively, as reflected on the consolidated balance sheets, primarily related to the present value of the disposition fees on individual loans due to the Manager.

Due from Related Party

    As of December 31, 2021, amount due from a related party was $2.6 million, primarily related to the reserve funding on a loan that was held by an affiliate. The reserve funding was transferred to the Company in February 2022. There was no due from related party as of December 31, 2020.

Merger and Issuance of Common Stock to Terra Offshore REIT

    As discussed in Note 3, on March 1, 2020, TPT2 merged with and into the Company with the Company continuing as the surviving company. In connection with the Merger, the Company issued 2,116,785.76 shares of common stock of the Company to Terra Fund 7, the sole stockholder of TPT2, as consideration in the Merger. In addition, on March 2, 2020, Terra Offshore REIT contributed cash and released obligations under the participation agreements to the Company (Note 3) in exchange for the issuance of 2,457,684.59 shares of common stock of the Company. As described in Note 3, Terra Fund 7 contributed the shares of the Company’s common stock received as consideration in the Merger to Terra JV and became a co-managing member of

Terra JV pursuant to the JV Agreement. The JV Agreement and related stockholders agreement between Terra JV and the Company, dated March 2, 2020, provide for the joint approval of Terra Fund 5 and Terra Fund 7 with respect to certain major decisions that are taken by Terra JV and the Company. As of December 31, 2021, Terra JV owns 87.4% of the issued and outstanding shares of the Company’s common stock with the remainder held by Terra Offshore REIT, and Terra Fund 5 and Terra Fund 7 own an 87.6% and 12.4% interest, respectively, in Terra JV.

Mavik Real Estate Special Opportunities Fund, LP

On August 3, 2020, the Company entered into a subscription agreement with RESOF whereby the Company committed to fund up to $50.0 million to purchase limited partnership interests in RESOF. For more information on this investment, please see Note 5.

Terra International Fund 3, L.P.

    On September 30, 2019, Terra International Fund 3, L.P. (“Terra International 3”), through Terra Offshore REIT, a wholly-owned subsidiary of Terra International 3, contributed cash in the amount of $3.6 million to the Company in exchange for 212,691 shares of common stock, at a price of $17.02 per share. On April 29, 2020, the Company repurchased, at a price of $17.02 per share, the 212,691 shares of common stock that the Company had previously sold to Terra Offshore REIT on September 30, 2019.

Participation Agreements

In the normal course of business, the Company may enter into participation agreements with related parties, primarily other affiliated funds managed by the Manager, and to a lesser extent, unrelated parties (the “Participants”). The purpose of the participation agreements is to allow the Company and an affiliate to originate a specified loan when, individually, the Company does not have the liquidity to do so or to achieve a certain level of portfolio diversification. The Company may transfer portions of its investments to other Participants or it may be a Participant to a loan held by another entity.

ASC 860, Transfers and Servicing (“ASC 860”), establishes accounting and reporting standards for transfers of financial assets. ASC 860-10 provides consistent standards for distinguishing transfers of financial assets that are sales from transfers that are secured borrowings. The Company has determined that the participation agreements it enters into are accounted for as secured borrowings under ASC 860 (See “Participation interests” in Note 2 and “Obligations under Participation Agreements” in (Note 9).

Participation Interests Purchased by the Company

From time to time, the Company may purchase investments from affiliates pursuant to participation agreements. In accordance with the terms of each participation agreement, each Participant’s rights and obligations, as well as the proceeds received from the related borrower/issuer of the loan, are based upon their respective pro rata participation interest in the loan.

The table below lists the participation interests purchased by the Company pursuant to participation agreements as of December 31, 2021 and 2020.

	December 31, 2021
	Participating Interests	Principal Balance		Carrying Value
Hillsborough Owners LLC (1)	30.00%	$	4,863,009	$	4,866,542
UNJ Sole Member, LLC (2)	40.80%	7,444,357		7,477,190
		$	12,307,366	$	12,343,732

	December 31, 2020
	Participating Interests	Principal Balance		Carrying Value
LD Milpitas Mezz, LP (3)	25.00%	$	4,250,000	$	4,294,053

________________

(1)The loan is held in the name of Terra Income Fund 6, Inc. (“Terra Fund 6”), an affiliated fund advised by Terra Income Advisors, LLC, an affiliate of the Company’s sponsor and Manager.

(2)The loan is held in the name of Mavik Real Estate Special Opportunities Fund REIT, LLC, a related-party REIT managed by the Manager.

(3)On June 27, 2018, the Company entered into a participation agreement with Terra Fund 6 to purchase a 25% participation interest, or $4.3 million, in a $17.0 million mezzanine loan. This loan was repaid in full in May 2021.

Transfers of Participation Interest by the Company

    The following tables summarize the loans that were subject to participation agreements with affiliated entities and third-parties as of December 31, 2021 and 2020:

					Transfers Treated as Obligations Under Participation Agreements as of December 31, 2021
	Principal Balance		Carrying Value		% Transferred		Principal Balance		Carrying Value
370 Lex Part Deux, LLC (1)	$	60,012,639	$	60,012,639	35.00	%	$	21,004,424	$	21,004,423
RS JZ Driggs, LLC (1)	15,606,409		15,754,641		50.00	%	7,806,370		7,880,516
William A. Shopoff & Cindy I. Shopoff (1)	25,000,000		25,206,964		52.95	%	13,237,500		13,347,088
	$	100,619,048	$	100,974,244			$	42,048,294	$	42,232,027

					Transfers Treated as Obligations Under Participation Agreements as of December 31, 2020
	Principal Balance		Carrying Value		% Transferred		Principal Balance		Carrying Value
14th & Alice Street Owner, LLC (2)(3)(4)	$	32,625,912	$	32,877,544	80.00	%	$	26,100,729	$	26,211,548
370 Lex Part Deux, LLC (1)	53,874,507		53,912,363		35.00	%	18,856,078		18,856,077
City Gardens 333 LLC (1)(4)	28,303,628		28,307,408		14.00	%	3,962,509		3,963,010
Orange Grove Property Investors, LLC (1)(4)	10,600,000		10,701,924		80.00	%	8,480,000		8,561,523
RS JZ Driggs, LLC (1)	8,544,513		8,629,929		50.00	%	4,272,257		4,314,965
Stonewall Station Mezz LLC (1)(4)	10,442,567		10,537,512		44.00	%	4,594,730		4,635,937
The Bristol at Southport, LLC (2)(4)	23,500,000		23,682,536		21.28	%	5,000,000		5,038,837
	$	167,891,127	$	168,649,216			$	71,266,303	$	71,581,897

________________

(1)Participant is Terra Fund 6.

(2)Participant is a third-party.

(3)The participation interest was transferred to an affiliate and/or a third-party pursuant to a participation agreement in the second quarter of 2021.

(4)The obligation under participation agreement was repaid in 2021.

These investments are held in the name of the Company, but each of the Participant’s rights and obligations, including interest income and other income (e.g., exit fee, prepayment income) and related fees/expenses (e.g., disposition fees, asset management and asset servicing fees), are based upon their respective pro rata participation interest in such participated investments, as specified in the respective participation agreement. The Participants’ share of the investments is repayable only from the proceeds received from the related borrower/issuer of the investments and, therefore, the Participants also are subject to credit risk (i.e., risk of default by the underlying borrower/issuer). Pursuant to the participation agreements with these entities, the Company receives and allocates the interest income and other related investment income to the Participants based on their respective pro rata participation interest. The Participants pay any expenses, including any fees to the Manager, only on their respective pro rata participation interest, subject to the terms of the respective governing fee arrangements.

Secured Borrowing

In March 2020, the Company entered into a financing transaction where a third-party purchased an A-note position. However, the sale of the A-note position did not qualify for sale accounting under ASC 860 and therefore, the gross amount of the loan remains in the consolidated balance sheets and the proceeds from the sale on the portion transferred are recorded as

secured borrowing. Interest earned on the entire loan balance is recorded within “Interest income” and the interest related to the transferred interest is recorded within “Interest expense on secured borrowing” in the consolidated statements of operations.

The following table summarizes the loan that was transferred to a third-party that was accounted for as secured borrowing as of December 31, 2021 and 2020:

					Transfers Treated as Secured Borrowing as of December 31, 2021
	Principal Balance		Carrying Value		% Transferred		Principal Balance		Carrying Value
Windy Hill PV Five CM, LLC	$	49,954,068	$	50,264,568	69.11	%	$	34,521,104	$	34,586,129
	$	49,954,068	$	50,264,568			$	34,521,104	$	34,586,129

					Transfers Treated as Secured Borrowing as of December 31, 2020
	Principal Balance		Carrying Value		% Transferred		Principal Balance		Carrying Value
Windy Hill PV Five CM, LLC	$	26,454,910	$	26,407,494	69.11	%	$	18,281,848	$	18,187,663
	$	26,454,910	$	26,407,494			$	18,281,848	$	18,187,663

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Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt

Note 9. Debt

Unsecured Notes Payable

On June 10, 2021, the Company issued $78.5 million in aggregate principal amount of its 6.00% notes due 2026 (the “initial note”), for net proceeds of $76.0 million after deducting underwriting commissions of $2.5 million, but before offering expenses payable by the Company. On June 25, 2021, the underwriters partially exercised their option to purchase an additional $6.6 million of the notes for net proceeds of $6.4 million (the “additional notes” and, together with the initial notes, the “notes”), after deducting underwriting commissions of $0.2 million, but before offering expenses payable by us, which closed on June 29, 2021. Interest on the notes is paid quarterly in arrears every March 30, June 30, September 30 and December 30, at a fixed rate of 6.00% per year, beginning September 30, 2021. The notes mature on June 30, 2026, unless redeemed earlier by the Company. The notes may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after June 10, 2023.

In connection with the issuance of the notes, the Company entered into (i) an Indenture, dated June 10, 2021 (the “Base Indenture”), by and between the Company and U.S. Bank National Association, as trustee (the “Trustee”), and (ii) the First Supplemental Indenture thereto, dated June 10, 2021 (the “Supplemental Indenture” and, collectively with the Base Indenture, the “Indenture”), by and between the Company and the Trustee. The Indenture contains certain covenants that, among other things, limit the ability of the Company, subject to exceptions, to make distributions in excess of 90% of the Company’s taxable income, incur indebtedness (as defined in the Indenture) or purchase shares of the Company’s capital stock unless the Company has an asset coverage ratio (as defined in the Indenture) of at least 150% after giving effect to such transaction. The Indenture also provides for customary events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the notes to become or to be declared due and payable. As of December 31, 2021, the Company was in compliance with the covenants included in the Indenture.

The table below presents detailed information regarding the unsecured notes payable at December 31, 2021:

	December 31, 2021
	Principal Balance		Carrying Value (1)		Fair Value
Unsecured notes payable	$	85,125,000	$	81,856,799	$	85,210,125

_______________

(1)Amount is net of unamortized issue discount of $2.4 million and unamortized deferred financing costs of $0.9 million.

Revolving Line of Credit

On March 12, 2021, Terra Mortgage Portfolio II, LLC, an indirect wholly-owned subsidiary of the Company, entered into a Business Loan and Security Agreement (the “Revolving Line of Credit”) with Western Alliance Bank (“WAB”) to provide for advances up to the lesser of $75.0 million or the amount determined by the borrowing base, which is based on the eligible assets pledged to the lender. Borrowings under the Revolving Line of Credit bear interest at an annual rate of LIBOR + 3.25% with a combined floor of 4.0% per annum. The Revolving Line of Credit was scheduled to mature on March 12, 2023. On January 4, 2022, the Company amended the Revolving Line of Credit and the Security Agreement to increase the maximum amount available to $125.0 million and extended the maturity date of the facility to March 12, 2024 with an annual 12-month extension available at the Company’s option, which are subject to certain conditions.

In connection with the Revolving Line of Credit, the Company entered into a limited guaranty (the “Guaranty”) in favor of WAB, pursuant to which the Company will guarantee the payment of up to 25% of the amount outstanding under the Revolving Line of Credit. Under the Revolving Line of Credit and the Guaranty, the Company will be required to maintain (i) a minimum total net worth of $250.0 million; (ii) a $2.0 million quarterly operating profit, as defined within the agreement; and (iii) a ratio of total debt to total net worth of no more than 2.50 to 1.00. As of December 31, 2021, the Company is in compliance with these covenants.

The Revolving Line of Credit contains terms, conditions, covenants, and representations and warranties that are customary and typical for a transaction of this nature. The Revolving Line of Credit contains various affirmative and negative covenants, including maintenance of a debt to total net worth ratio and limitations on the incurrence of liens and indebtedness, loans, distributions, change of management and ownership, changes in the nature of business and transactions with affiliates.

The Revolving Line of Credit also includes customary events of default, including a cross-default provision applicable to debt obligations of Terra Mortgage Portfolio II, LLC or the Company. The occurrence of an event of default may result in termination of the Revolving Line of Credit and acceleration of amounts due under the Revolving Line of Credit.

In connection with the closing of the Revolving Line of Credit, the Company also incurred financing fees of $0.6 million, to be amortized to interest expense over the life of the Revolving Line of Credit.

The following tables present detailed information with respect to each borrowing under the Revolving Line of Credit as of December 31, 2021:

	December 31, 2021
	Borrowing Base						Borrowings Under the Revolving Line of Credit
	Principal Amount		Carrying Value		Fair Value
870 Santa Cruz, LLC	$	17,540,875	$	17,669,303	$	17,781,285	$	12,278,613
606 Fayetteville LLC and 401 E. Lakewood LLC	16,829,962		16,935,803		16,974,601		10,312,187
Austin H. I. Borrower LLC	13,625,000		13,725,690		13,735,569		7,493,750
D-G Acquistion #6, LLC and D-G Quimisa, LLC	8,607,092		8,605,341		8,645,413		6,024,965
The Lux Washington, LLC	3,523,401		3,382,683		3,553,330		2,466,380
	$	60,126,330	$	60,318,820	$	60,690,198	$	38,575,895

For the year ended December 31, 2021, the Company received proceeds from the Revolving Line of Credit of $38.6 million and did not make any repayments.

Term Loan

On September 3, 2020, Terra Mortgage Capital I, LLC (the “Issuer” or the “Seller”), a special-purpose indirect wholly-owned subsidiary of the Company, entered into an Indenture and Credit Agreement (the “Indenture and Credit Agreement”) with Goldman Sachs Bank USA, as initial lender (“Goldman”) and Wells Fargo Bank, National Association, as the trustee, custodian, collateral agent, loan agent and note administrator (“Wells Fargo”). The Indenture and Credit Agreement provides for (A) the borrowing by the Issuer from Goldman of approximately $103.0 million under a floating rate loan (the “Term Loan”) and (B) the issuance by the Issuer to Terra Mortgage Portfolio I, LLC (the “Class B Holder”) of an aggregate of approximately $76.7 million principal amount of Class B Income Notes due 2025 (the “Class B Notes” and, together with the Term Loan, the “Debt”). The Class B Holder is the parent of the Issuer and a wholly-owned subsidiary of the Company, and the sole holder of the Class B Notes. The Class B Holder is consolidated by the Company and the Term Loan represents amount

due to Goldman under the Indenture and Credit Agreement. In addition, pursuant to the terms and conditions of the Indenture and Credit Agreement, Goldman has agreed to provide $3.6 million of additional future advances (the “Committed Advances”), and may provide up to $11.6 million of additional future discretionary advances, in connection with certain outstanding funding commitments under mortgage assets owned by the Issuer and financed under the Indenture and Credit Agreement (the “Mortgage Assets”).

The stated maturity date of the Debt was March 14, 2025. On February 18, 2022, the Company refinanced the Term Loan with a new repurchase agreement (see Note 12). The Term Loan bore interest at a variable rate initially equal to LIBOR (the “Benchmark Rate”) (but not less than 1.0% per annum), plus a margin of 4.25% per annum (plus 0.50% on and after the payment date in October 2022, plus 0.25% on and after the payment date in October 2023), payable each month, on the day specified in the Indenture and Credit Agreement beginning in September 2020 (each a “Payment Date”).

The Indenture and Credit Agreement is a term loan and does not contain any mark-to-market or margin provisions. Within a specified period following a monetary or material non-monetary default under a Mortgage Asset, the Class B Holder is required to prepay the portion of the Term Loan that is allocable to such Mortgage Asset (such prepayment is without premium, yield maintenance or other penalty). In connection with entering into the Indenture and Credit Agreement, the Company incurred $2.4 million of deferred financing costs, including a $1.3 million upfront fee paid to Goldman, which are being amortized to interest expense over the term of the facility. The Issuer also pays, with respect to the Committed Advances, an annual fee, payable monthly, equal to the Benchmark Rate or Alternate Benchmark Rate, as applicable, subject to a floor of 1.0% per annum, plus 4.25%.

In connection with the Indenture and Credit Agreement, the Company entered into a non-recourse carveout Guaranty (the “Guaranty”) in favor of Goldman, pursuant to which the Company guarantees the payment of certain losses, damages, costs, expenses, and other obligations incurred by Goldman in connection with the occurrence of fraud, intentional misrepresentation, or willful misconduct by the Issuer, Class B Holder or the Company, and certain other occurrences including breaches of certain provisions under the Indenture and Credit Agreement. The Company also guarantees the payment of the aggregate outstanding amount of the Term Loan upon the occurrence of certain bankruptcy events. Under the Guaranty, the Company is required to maintain (a) a minimum tangible net worth in an amount not less than seventy-five percent (75%) of its tangible net worth as of September 3, 2020, (b) a minimum liquidity of $10 million, and (c) an EBITDA to interest expense ratio of not less than 1.5 to 1.0. Failure to satisfy such maintenance covenants would constitute an event of default under the Indenture and Credit Agreement. On February 18, 2022, the Company refinanced the Term Loan with a new repurchase agreement (see Note 12) and expects continued covenant compliance under the terms of the new repurchase agreement. As of December 31, 2020, the Company was in compliance with these covenants.

The Term Loan is secured by first-priority security interests in substantially all of the assets of the Issuer, including all of the Mortgage Assets (other than excluded property and subject to certain permitted liens), including specified cash accounts that include the accounts into which Mortgage Asset proceeds are or will be paid. The Mortgage Assets are serviced and administered by an independent third-party servicer.

The principal and interest on the Term Loan are repaid before repayment of the principal on the Class B Notes on each payment date of each month in accordance with the priority of payments as set forth in the Indenture and Credit Agreement, beginning in September 2020. Such payments are subject to certain fees for taxes, filings and administrative expenses. Upon the occurrence of a Term Loan Principal Trigger Event (as defined below), 100% of the payment of the principal proceeds are applied to the Term Loan principal after payment of certain fees and other amounts as described in the Indenture and Credit Agreement. A “Term Loan Principal Trigger Event” means as of any date of determination, an event that will be deemed to have occurred on the first date on which the aggregate principal balance of the Mortgage Assets is less than or equal to the product of (x) 75% multiplied by (y) the aggregate principal balance of the Mortgage Assets as of the closing date, plus any future advances made on such Mortgage Assets prior to such date of determination. As of December 31, 2021 and 2020, there was no Term Loan Principal Trigger Event. The Class B Notes and the Term Loan are redeemable by the Issuer upon the occurrence of certain tax events in accordance with the terms and provisions of the Indenture and Credit Agreement.

The following tables present detailed information with respect to each borrowing under the Term Loan as of December 31, 2021 and 2020:

	December 31, 2021
	Mortgage Assets						Borrowings Under the Term Loan (1)(2)
	Principal Amount		Carrying Value		Fair Value
330 Tryon DE LLC	$	22,800,000	$	22,902,354	$	22,594,654	$	13,680,000
1389 Peachtree St, LP; 1401 Peachtree St, LP; and    1409 Peachtree St, LP	53,289,288		53,536,884		52,031,363		31,283,661
AGRE DCP Palm Springs, LLC	43,222,381		43,669,992		43,829,842		23,146,265
Patrick Henry Recovery Acquisition, LLC	18,000,000		18,041,124		18,055,377		10,800,000
University Park Berkeley, LLC	25,815,378		25,991,962		26,015,500		14,853,544
	$	163,127,047	$	164,142,316	$	162,526,736	$	93,763,470

	December 31, 2020
	Mortgage Assets						Borrowings Under the Term Loan (1)(2)
	Principal Amount		Carrying Value		Fair Value
330 Tryon DE LLC	$	22,800,000	$	22,901,294	$	22,869,879	$	13,680,000
1389 Peachtree St, LP; 1401 Peachtree St, LP; and    1409 Peachtree St, LP	50,808,453		51,068,554		50,982,247		29,897,848
AGRE DCP Palm Springs, LLC	45,294,097		45,506,051		45,519,030		24,894,939
MSC Fields Peachtree Retreat, LLC	23,308,334		23,437,198		23,428,860		13,985,001
Patrick Henry Recovery Acquisition, LLC	18,000,000		18,039,456		17,994,495		10,800,000
University Park Berkeley, LLC	23,990,786		24,131,808		24,162,710		14,326,663
	$	184,201,670	$	185,084,361	$	184,957,221	$	107,584,451

_______________

(1)Borrowings under the Term Loan bear interest at LIBOR plus 4.25% with a LIBOR floor of 1.00%, or 5.25% as of both December 31, 2021 and 2020, using LIBOR of 0.10% and 0.14%, respectively.

(2)The maturity of the Term Loan is March 14, 2025, however the maturity of each borrowing under the Term Loan matches the maturity of the respective Mortgage Asset.

For the year ended December 31, 2021, the Company received proceeds from borrowings under the Term Loan of $2.8 million and made repayment of $16.6 million. As of December 31, 2021, the remaining amount for Committed Advances and discretionary advances was $0.4 million and $6.6 million, respectively.

Repurchase Agreements

UBS Master Repurchase Agreement

On November 8, 2021, Terra Mortgage Capital III, LLC (the “Seller”), a special-purpose indirect wholly-owned subsidiary of the Company, entered into an Uncommitted Master Repurchase Agreement (the “UBS Master Repurchase Agreement”) with UBS AG ( the “Buyer”). The UBS Master Repurchase Agreement provides for advances of up to $195 million in the aggregate, which the Company expects to use to finance certain secured performing commercial real estate loans, including senior mortgage loans, where the underlying mortgaged properties consist of value-added assets with loan-to-value ratio between 65% and 80% that are typically yielding between 2.5% and 5.0%.

Advances under the UBS Master Repurchase Agreement accrue interest at a per annum pricing rate equal to the sum of (i) the 30-day LIBOR and (ii) the applicable spread, which ranges from 1.60% to 1.85%, and have a maturity date of November 7, 2024. The actual terms of financing for each asset will be determined at the time of financing in accordance with the UBS Master Repurchase Agreement. Subject to satisfaction of certain conditions, the Seller may extend the maturity date of the UBS Master Repurchase Agreement annually thereafter on mutually agreeable terms. In connection with the UBS Master Repurchase Agreement, the Company incurred deferred financing costs of $0.6 million, which are being amortized to interest expense over the term of the facility.

The UBS Master Repurchase Agreement contains margin call provisions that provide the Buyer with certain rights in the event of a decline in the credit of the underlying assets purchased under the UBS Master Repurchase Agreement. Upon the occurrence of a margin deficit event, the Buyer may require the Seller to make a payment to reduce the purchase price to eliminate any margin deficit.

In connection with the UBS Master Repurchase Agreement, the Company entered into a Guarantee Agreement in favor of the Buyer (the “UBS Guarantee Agreement”). The UBS Master Repurchase Agreement and the UBS Guarantee Agreement contain various representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of these types. In addition, the UBS Guarantee Agreement contains financial covenants, which require the Company to maintain: (i) cash liquidity of at least the greater of $5 million or 5% of the then-current outstanding amount under the Master Repurchase Agreement; (ii) total liquidity of at least the greater of $15 million or 10% of the then-current outstanding amount under the Master Repurchase Agreement (iii) tangible net worth at an amount equal to or greater than $215.7 million plus 75% of new capital contributions thereafter; (iv) an EBITDA to interest expense ratio of not less than 1.50 to 1.00; and (v) a total indebtedness to tangible net worth ratio of not more than 3.50 to 1.00. In March 2022, the Company amended the UBS Guarantee Agreement to reduce the EBITDA to interest expense ratio of not less than 1.25 to 1.00, and as of December 31, 2021, the Company was in compliance with these covenants.

The following table presents detailed information with respect to each borrowing under the UBS Master Repurchase Agreement as of December 31, 2021:

	December 31, 2021
	Collateral						Borrowings Under Master Repurchase Agreement
	Principal Amount		Carrying Value		Fair Value		Borrowing Date	Principal Amount		Interest Rate
14th & Alice Street Owner, LLC	$	39,384,000	$	40,089,153	$	40,130,448	11/8/2021	$	25,599,600	LIBOR+1.45% (LIBOR floor of 0.1%)
NB Factory TIC 1, LLC	28,000,000		28,420,056		28,851,547		11/8/2021	18,970,000		LIBOR+1.74% (LIBOR floor of 0.1%)
	$	67,384,000	$	68,509,209	$	68,981,995		$	44,569,600

For the year ended December 31, 2021, the Company borrowed $44.6 million under the UBS Master Repurchase Agreement for the financing of new and follow-on investments, and did not make any repayments.

Goldman Master Repurchase Agreement     

On December 12, 2018, Terra Mortgage Capital I, LLC entered into an Uncommitted Master Repurchase Agreement (the “Goldman Master Repurchase Agreement”) with Goldman Sachs Bank USA. The Goldman Master Repurchase Agreement provided for advances of up to $150.0 million in the aggregate, which the Company used to finance certain secured performing commercial real estate loans.

    Advances under the Goldman Master Repurchase Agreement accrued interest at a per annum pricing rate equal to the sum of (i) the 30-day LIBOR and (ii) the applicable spread, and had a maturity date of December 12, 2020. The actual terms of financing for each asset was determined at the time of financing in accordance with the Goldman Master Repurchase Agreement.

The Goldman Master Repurchase Agreement contained margin call provisions that provide Goldman with certain rights in the event of a decline in the market value of the assets purchased under the Goldman Master Repurchase Agreement. Upon the occurrence of a margin deficit event, Goldman required the Seller to make a payment to reduce the outstanding obligation to eliminate any margin deficit. For the period from January 1, 2020 to the date of the termination of the Goldman Master Repurchase Agreement on September 3, 2020, the Company received a margin call on one of the borrowings and as a result, made a repayment of $3.4 million to reduce the outstanding obligation under the Goldman Master Repurchase Agreement.

    On September 3, 2020, the Company terminated the Goldman Master Repurchase Agreement and replaced it with the Term Loan as described above. In connection with the termination of the Goldman Master Repurchase Agreement, the Issuer repurchased all of its assets sold to Goldman pursuant to the Goldman Master Repurchase Agreement with the proceeds from the Term Loan, and Goldman released all security interests in such assets. In addition, Goldman unconditionally released the

Company from, and terminated, the Guarantee Agreement in favor of Goldman, dated as of December 12, 2018, which provided for the guarantee by the Company of the obligations of the Issuer under the Goldman Master Repurchase Agreement, subject to certain exceptions and limitations.

For the year ended December 31, 2020, the Company received proceeds from borrowings under the Goldman Master Repurchase Agreement of $22.9 million and made repayments of $104.0 million.

Revolving Credit Facility

    On June 20, 2019, Terra LOC Portfolio I, LLC, a special-purpose indirect wholly-owned subsidiary of the Company, entered into a credit agreement with Israel Discount Bank of New York to provide for revolving credit loans of up to $35.0 million in the aggregate (“Revolving Credit Facility”), which the Company expects to use for short term financing needed to bridge the timing of anticipated loans repayments and funding obligations. Borrowings under the Revolving Credit Facility can be either prime rate loans or LIBOR rate loans and accrue interest at an annual rate of prime rate plus 1% or LIBOR plus 4% with a floor of 6%. The Revolving Credit Facility was scheduled to mature on June 20, 2020. The Revolving Credit Facility was amended to extend the maturity to October 2, 2020. On October 2, 2020, the Company amended the Revolving Credit Facility and reduced the commitment amount to $15.0 million. In connection with this amendment, the interest rate was changed to prime rate plus 1% or LIBOR plus 4% with a floor of 4.5% and the maturity was extended to September 2, 2021. On March 16, 2021, the Revolving Credit Facility was terminated. There were no amounts outstanding under the Revolving Credit Facility at December 31, 2020.

    For the year ended December 31, 2020, the Company received proceeds $35.0 million from borrowings under the Revolving Credit Facility, all of which were repaid in the same period.

Mortgage Loan Payable

    As of December 31, 2021, the Company had a $32.0 million mortgage loan payable collateralized by a multi-tenant office building that the Company acquired through foreclosure. The following table presents certain information about the mortgage loan payable as of December 31, 2021 and 2020:

			December 31, 2021						December 31, 2020
Lender	Current Interest Rate	Maturity Date	Principal Amount		Carrying Value		Carrying Value of Collateral		Principal Amount		Carrying Value		Carrying Value of Collateral
Centennial Bank	LIBOR + 3.85% (LIBOR Floor of 2.23%)	September 27, 2022	$	31,962,692	$	32,134,295	$	46,067,129	$	44,020,225	$	44,117,293	$	49,533,733

Scheduled Debt Principal Payments

    Scheduled debt principal payments for each of the five calendar years following December 31, 2021 are as follows:

Years Ending December 31,	Total
2022	$	31,962,692
2023	38,575,895
2024	100,333,261
2025	37,999,809
2026	85,125,000
Thereafter	—
	293,996,657
Unamortized deferred financing costs	(5,904,421)
Total	$	288,092,236

     At December 31, 2021 and 2020, the unamortized deferred debt issuance costs were $5.9 million and $2.2 million, respectively.

Obligations Under Participation Agreements and Secured BorrowingAs discussed in Note 2, the Company follows the guidance in ASC 860 when accounting for loan participations and loans sold. Such guidance requires the transferred interests meet certain criteria in order for the transaction to be recorded as a sale. Loan participations and loans transferred from the Company which do not qualify for sale treatment remain on the Company’s consolidated balance sheets and the proceeds are recorded as obligations under participation agreements or secured borrowing, as applicable. As of December 31, 2021 and 2020, obligations under participation agreements had a carrying value of approximately $42.2 million and $71.6 million, respectively, and the carrying value of the loans that are associated with these obligations under participation agreements was approximately $101.0 million and $168.6 million, respectively, (see “Participation Agreements” in Note 8). Additionally, as of December 31, 2021 and 2020, secured borrowing had a carrying value of approximately $34.6 million and $18.2 million, and the carrying value of the loan that is associated with the secured borrowing was $50.3 million and $26.4 million, respectively. The weighted-average interest rate on the obligations under participation agreements and secured borrowing was approximately 10.4% and 10.2% as of December 31, 2021 and 2020, respectively.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 10. Commitments and Contingencies

Impact of COVID-19

    The full extent of the impact of the COVID-19 pandemic on the global economy generally, and the Company’s business in particular, will depend on future developments, which are highly uncertain and cannot be predicted with confidence. As of December 31, 2021, no contingencies have been recorded on the Company’s consolidated balance sheet as a result of the COVID-19 pandemic, however as the pandemic continues, it may have long-term impacts on the Company’s financial condition, results of operations, and cash flows. Refer to Note 2 for further discussion of COVID-19.

Unfunded Commitments on Loans Held for Investment

Certain of the Company’s loans contain provisions for future fundings, which are subject to the borrower meeting certain performance-related metrics that are monitored by the Company. These fundings amounted to approximately $71.8 million and $67.9 million as of December 31, 2021 and 2020, respectively. The Company expects to maintain sufficient cash on hand to fund such unfunded commitments, primarily through matching these commitments with principal repayments on outstanding loans.

Unfunded Investment Commitment

As discussed in Note 7, On August 3, 2020, the Company entered into a subscription agreement with RESOF whereby the Company committed to fund up to $50.0 million to purchase limited partnership interests in RESOF. As of December 31, 2021 and 2020, the unfunded investment commitment was $15.1 million and $14.1 million, respectively.

Other

The Company enters into contracts that contain a variety of indemnification provisions. The Company’s maximum exposure under these arrangements is unknown; however, the Company has not had prior claims or losses pursuant to these contracts. The Manager has reviewed the Company’s existing contracts and expects the risk of loss to the Company to be remote.

The Company is not currently subject to any material legal proceedings and, to the Company’s knowledge, no material legal proceedings are threatened against the Company. From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under contracts with its portfolio companies. While the outcome of any legal proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material adverse effect upon its financial condition or results of operations.

See Note 8 for a discussion of the Company’s commitments to the Manager.

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Equity

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Equity

Note 11. Equity

Earnings Per Share

The following table presents earnings per share for the years ended December 31, 2021 and 2020:

	Years Ended December 31,
	2021		2020
Net (loss) income	$	(12,355,727)	$	5,255,730
Series A preferred stock dividend declared	(15,624)		(15,624)
Net (loss) income allocable to common stock	$	(12,371,351)	$	5,240,106
Weighted-average shares outstanding - basic and diluted	19,487,460		18,813,066
(Loss) earnings per share - basic and diluted	$	(0.63)	$	0.28

Preferred Stock Classes

Preferred Stock

    The Company’s charter gives it authority to issue 50,000,000 shares of preferred stock, $0.01 par value per share (“Preferred Stock”). The Company’s board of directors may classify any unissued shares of Preferred Stock and reclassify any previously classified but unissued shares of Preferred Stock of any series from time to time, into one or more classes or series of stock. As of December 31, 2021 and 2020, there were no Preferred Stock issued or outstanding.

Series A Preferred Stock

    On November 30, 2016, the Company’s board of directors classified and designated 125 shares of preferred stock as a separate class of preferred stock to be known as the 12.5% Series A Redeemable Cumulative Preferred Stock, $1,000 liquidation value per share (“Series A Preferred Stock”). In December 2016, the Company sold 125 shares of the Series A Preferred Stock for $125,000. The Series A Preferred Stock pays dividends at an annual rate of 12.5% of the liquidation preference. These dividends are cumulative and payable semi-annually in arrears on June 30 and December 31 of each year.

    The Series A Preferred Stock, with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Company, rank senior to common stock. The Company, at its option, may redeem the shares, with written notice, at a redemption price of $1,000 per share, plus any accrued unpaid distribution through the date of the redemption. The Series A Preferred Stock carries a redemption premium of $50 per share if redeemed prior to January 1, 2019. The Series A Preferred Stock generally has no voting rights. However, the Series A Preferred Stock holders’ voting is required if (i) authorization or issuance of any securities senior to the Series A Preferred Stock; (ii) an amendment to the Company’s charter that has a material adverse effect on the rights and preference of the Series A Preferred Stock; and (iii) any reclassification of the Series A Preferred Stock.

Common Stock

As discussed in Note 3, on March 1, 2020, TPT2 merged with and into the Company with the Company continuing as the surviving corporation. In connection with the Merger, the Company issued 2,116,785.76 shares of common stock of the Company to Terra Fund 7, the sole stockholder of TPT2, as consideration in the Merger. In addition, on March 2, 2020, the Company issued 2,457,684.59 shares of common stock of the Company in exchange for the settlement of certain participation interests in loans held by the Company and cash. As described in Note 3, Terra Fund 7 contributed the shares of the Company’s common stock received as consideration in the Merger to Terra JV and became a co-managing member of Terra JV pursuant to the JV Agreement. The JV Agreement and related stockholders agreement between Terra JV and the Company, dated March 2, 2020, provide for the joint approval of Terra Fund 5 and Terra Fund 7 with respect to certain major decisions that are taken by Terra JV and the Company. As of December 31, 2021, Terra JV owns 87.4% of the issued and outstanding shares of the Company’s common stock with the remainder held by Terra Offshore REIT, and Terra Fund 5 and Terra Fund 7 own an 87.6% and 12.4% interest, respectively, in Terra JV.    

    On September 30, 2019, the Company issued 212,691 shares of its common stock to Terra Offshore REIT at a price of $17.02 per share for total proceeds of $3.6 million. On April 29, 2020, the Company repurchased, at a price of $17.02 per share, the 212,691 shares it previously sold to Terra Offshore REIT (Note 8).

Distributions

    The Company generally intends to distribute substantially all of its taxable income, which does not necessarily equal net income as calculated in accordance with U.S. GAAP, to its stockholders each year to comply with the REIT provisions of the Internal Revenue Code. All distributions will be made at the discretion of the Company’s board of directors and will depend upon its taxable income, financial condition, maintenance of REIT status, applicable law, and other factors as its board of directors deems relevant.

    For the years ended December 31, 2021 and 2020, the Company made distributions to Terra 5, Terra JV and Terra Offshore REIT totaling $17.1 million and $21.2 million, respectively, of which $14.6 million and $16.0 million were returns of capital, respectively. Additionally, for each of the years ended December 31, 2021 and 2020, the Company made distributions to preferred stockholders of $15,624.

Distributions paid to stockholders consist of ordinary income, capital gains, return of capital or a combination thereof for income tax purposes. The following table presents distributions per share, declared and paid during the years ended December 31, 2021 and 2020, reported for federal tax purposes and serves as a designation of capital gain distributions, if applicable, pursuant to Section 857(b)(3)(C) of the Internal Revenue Code and Treasury Regulation § 1.857-6(e):

	Years Ended December 31,
	2021		2020
Ordinary income	$	0.07	$	0.48
Capital gain	0.06		—
Return of capital	0.75		0.68
	$	0.88	$	1.16

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Subsequent Events

12 Months Ended

Dec. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

Note 12. Subsequent Events

Management has evaluated subsequent events through the date the consolidated financial statements were available to be issued. Management has determined that there are no material events other than the one described below that would require adjustment to, or disclosure in, the Company’s consolidated financial statements.

On February 18, 2022, Terra Mortgage Capital I, LLC (the “Seller”), a special-purpose indirect wholly-owned subsidiary of the Company, entered into an Uncommitted Master Repurchase and Securities Contract Agreement (the “Repurchase Agreement”) with Goldman Sachs Bank USA ( the “Buyer”). The Repurchase Agreement provides for advances of up to $200.0 million in the aggregate, which the Company expects to use to finance the originations of certain secured performing commercial real estate loans and the acquisitions of certain secured non-performing commercial real estate loans. The Repurchase Agreement replaced the Term Loan, at which time all Mortgage Assets under the Term Loan were assigned as purchased assets under the Repurchase Agreement.

Advances under the Repurchase Agreement accrue interest at a per annum pricing rate equal to the sum of (i) Term SOFR (subject to underlying loan floors on a case-by-case basis) and (ii) the applicable spread, which ranges from 1.75% to 3.00%, and have a maturity date of February 18, 2024. The actual terms of financing for each asset will be determined at the time of financing in accordance with the Repurchase Agreement. Subject to satisfaction of certain conditions, the Seller may extend the maturity date of the Repurchase Agreement for another 12-month term.

The Repurchase Agreement contains margin call provisions that provide the Buyer with certain rights in the event of a decline in debt yield, loan-to-value ratio, and value of the underlying loans purchased under the Repurchase Agreement. Upon the occurrence of a margin deficit event, the Buyer may require the Seller to make a payment to reduce the purchase price to eliminate any margin deficit.

In connection with the Repurchase Agreement, the Company entered into a Guarantee Agreement in favor of the Buyer (the “Guarantee Agreement”), pursuant to which the Company will guarantee the obligations of the Seller under the Repurchase Agreement. Subject to certain exceptions, the maximum liability under the Repurchase Agreement will not exceed 25% of the then currently outstanding repurchase obligations for performing loans and 50% of the then currently outstanding repurchase obligations for non-performing loans under the Repurchase Agreement

The Repurchase Agreement and the Guarantee Agreement contain various representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of these types. In addition,

the Guarantee Agreement contains financial covenants, which require the Company to maintain: (i) cash liquidity of at least the greater of $5 million or 5% of the then-current outstanding amount under the Repurchase Agreement; (ii) total liquidity in an amount equal to or greater than the lesser of $15 million or 10% of the then-current outstanding amount under the Repurchase Agreement (iii) tangible net worth at an amount no less than 75% of that at closing; (iv) an EBITDA to adjusted interest expense ratio of not less than 1.50 to 1.00; and (v) a total indebtedness to tangible net worth ratio of not more than 3.00 to 1.00.

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Schedule III Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2021

SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract]

Investment in Real Estate and Accumulated Depreciation Disclosure

Schedule III – Real Estate and Accumulated Depreciation

As of December 31, 2021

			Initial Costs				Cost Capitalized Subsequent to Acquisition		Decrease in Net Investment (1)		Gross Amount at Period End
Description	Encumbrance		Land		Building and Building Improvements						Land		Building and Building Improvements		Total		Accumulated Depreciation		Date of Construction	Date Acquired	Life Used for Depreciation
Office building    in Santa    Monica, CA	$	31,962,692	$	—	$	51,308,076	$	2,508,533	$	—	$	—	$	53,816,609	$	53,816,609	$	5,491,541	2002-2004	July 30, 2018	40 years
Land in    Conshohocken, PA	—		14,703,359		—		242,071		(4,945,430)		10,000,000		—		10,000,000		—		N/A	January 9, 2019	N/A
	$	31,962,692	$	14,703,359	$	51,308,076	$	2,750,604	$	(4,945,430)	$	10,000,000	$	53,816,609	$	63,816,609	$	5,491,541

___________________________

(1)For the year ended December 31, 2019, the Company recorded an impairment charge of $1.5 million on the land in order to reduce the carrying value of the land to its estimated fair value, which was the then estimated selling price less the cost of sale. For the year ended December 31, 2021, the Company recorded another impairment charge of $3.4 million to reflect the current estimated selling price less the cost of sale.

At December 31, 2021, the aggregate cost of real estate for federal income tax purposes was $57.6 million.

    The changes in total real estate assets and accumulated depreciation for the year ended December 31, 2021 are as follows:

	Real Estate Asset			Accumulated Depreciation
	Year Ended December 31, 2021			Year Ended December 31, 2021
Balance, beginning of year	$	67,212,039	Balance, beginning of year	$	3,826,700
Acquisition through foreclosure	—		Depreciation for the year	1,664,841
Improvements	—		Balance, end of year	$	5,491,541
Impairment charge	(3,395,430)
Balance, end of year	$	63,816,609

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SEC Schedule IV Mortgage Loans on Real Estate

12 Months Ended

Dec. 31, 2021

SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract]

Investment in Mortgage Loans on Real Estate

Schedule IV – Mortgage Loans on Real Estate

As of December 31, 2021

Portfolio Company (1)

Collateral Location

Property Type

Interest Payment Rates

Maximum Maturity Date (2)

Periodic Payment Terms

Prior Liens

Face Amount

Carrying Amount

Mezzanine Loans:

150 Blackstone River Road, LLC

US - MA

Industrial

8.5

%

9/6/2027

Interest Only

$

—

$

7,000,000

$

7,000,000

High Pointe Mezzanine Investments, LLC

US - SC

Student    housing

13.0

%

1/6/2024

Interest Only

—

3,000,000

3,145,614

UNIJ Sole Member, LLC (3)

US - CA

Mixed-use

15.0

%

6/1/2027

Interest Only

—

7,444,357

7,477,190

17,444,357

17,622,804

First Mortgages:

14th & Alice Street Owner, LLC

US - CA

Multifamily

LIBOR + 4.0% (0.25% Floor)

4/15/2024

Interest Only

—

39,384,000

40,089,153

1389 Peachtree St, LP; 1401 Peachtree St, LP;    1409 Peachtree St, LP

US - GA

Office

LIBOR + 4.5%

8/10/2024

Interest Only

—

53,289,288

53,536,884

330 Tryon DE LLC

US - NC

Office

LIBOR + 4.25% (0.1% Floor)

3/1/2024

Interest Only

—

22,800,000

22,902,354

606 Fayetteville LLC and 401 E. Lakewood LLC

US - NC

Land

9.0

%

8/1/2024

Interest Only

—

16,829,962

16,935,803

870 Santa Cruz, LLC

US - CA

Office

LIBOR + 6.75% (0.5% Floor)

12/15/2025

Interest Only

—

17,540,875

17,669,303

AGRE DCP Palm Springs, LLC

US - CA

Hotel - full/select service

LIBOR +5.0% (1.8% Floor)

1/1/2025

Interest Only

—

43,222,381

43,669,992

Austin H. I. Borrower LLC (4)

US - TX

Hotel - full/select service

LIBOR +7.5% (0.25% Floor)

10/1/2026

Interest Only

—

13,625,000

13,725,690

D-G Acquistion #6, LLC and D-G Quimisa, LLC

US - CA

Land

LIBOR +7.0% (0.25% Floor)

7/21/2025

Interest Only

—

8,607,092

8,605,341

Hillsborough Owners LLC (5)

US - NC

Mixed-use

LIBOR +8.0% (0.25% Floor)

11/1/2024

Interest Only

—

4,863,009

4,866,542

NB Factory TIC 1, LLC

US - UT

Student    housing

LIBOR +5.0% (0.25% Floor)

3/5/2024

Interest Only

—

28,000,000

28,420,056

Patrick Henry Recovery Acquisition, LLC

US - CA

Office

LIBOR + 2.95% (1.5% Floor)

12/1/2024

Interest Only

—

18,000,000

18,041,124

The Lux Washington, LLC

US - WA

Land

LIBOR + 7.0% (0.75% Floor)

1/22/2026

Interest Only

—

3,523,401

3,382,683

University Park Berkeley, LLC

US - CA

Multifamily

LIBOR + 4.2% (1.5% Floor)

3/1/2025

Interest Only

—

25,815,378

25,991,962

Windy Hill PV Five CM, LLC

US - CA

Office

LIBOR + 6.0% (2.05% Floor)

9/20/2023

Interest Only

—

49,954,068

50,264,568

345,454,454

348,101,455

Portfolio Company (1)	Collateral Location	Property Type	Interest Payment Rates		Maximum Maturity Date (2)	Periodic Payment Terms	Prior Liens		Face Amount		Carrying Amount
Preferred equity investments:
370 Lex Part Deux, LLC (6)(7)	US - NY	Office	LIBOR + 8.25% (2.44% Floor)		1/9/2025	Interest Only	$	—	$	60,012,639	$	60,012,639
REEC Harlem Holdings Company LLC (8)	US - NY	Mixed-use	LIBOR + 12.5%		3/9/2025	Interest Only	—		16,633,292		16,633,292
RS JZ Driggs, LLC (6)(7)(9)	US - NY	Multifamily	12.3	%	8/1/2021	Interest Only	—		15,606,409		15,754,641
									92,252,340		92,400,572
Credit facility:
William A. Shopoff & Cindy I. Shopoff (6)(7)	US-CA	Industrial	15.0	%	4/4/2023	Interest Only			25,000,000		25,206,964
									25,000,000		25,206,964
Allowance for loan losses									—		(13,658,481)
Total investments									$	480,151,151	$	469,673,314

___________________________

(1)All of the Company’s loans have a prepayment penalty provision.

(2)Maximum maturity date assumes all extension options are exercised.

(3)Participation interest is with Mavik Real Estate Special Opportunities Fund REIT, LLC, a related-party real estate investment trust managed by the Manager (Note 8).

(4)In September 2021, the Company refinanced a previously-defaulted mezzanine loan with a new first mortgage. This refinancing was accounted for as a troubled debt restructuring and the Company recognized a loss of $0.3 million on the restructuring.

(5)Participation interest is with Terra Fund 6, an affiliated fund advised by the Terra Income Advisors, an affiliate of the Company’s sponsor and Manager (Note 8).

(6)The loan participations from the Company do not qualify for sale accounting under ASC 860 and therefore, the gross amount of these loans remain in Schedule IV. See “Obligations under Participation Agreements” in Note 9 and “Transfers of Participation Interest by the Company” in Note 8 in the accompanying notes to the consolidated financial statements.

(7)The Company sold a portion of its interest in this loan through a participation agreement to Terra Fund 6 (Note 8).

(8)The Company recorded a specific allowance for loan loss of $12.8 million on this loan as a result of a decline in the value of the collateral (Note 4).

(9)This loan is in maturity default. The Company has exercised its rights and is facilitating the completion of construction of the asset in anticipation of lease up and disposition of the asset.

	Reconciliation of Mortgage Loans on Real Estate
	Year Ended December 31, 2021
Balance, beginning of year	$	422,280,515
Additions during the period:
New mortgage loans	252,437,733
PIK interest	1,955,109
Accrual, payment and accretion of investment-related fees and other, net	1,397,519
Deductions during the period:
Collections of principal	(196,780,456)
Provision for loan losses	(10,904,163)
Amortization of premium	(61,390)
Realized loss on loan repayments	(651,553)
Balance, end of year	$	469,673,314

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Consolidation

Principles of Consolidation

    The consolidated financial statements include all of the Company’s accounts and those of its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation.

The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (“VIE”) or voting interest model. The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model. Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity.

The Company accounts for investments in which it has significant influence but not a controlling financial interest using the equity method of accounting (see Note 5).

VIE Model

An entity is considered to be a VIE if any of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) the holders of the equity investment at risk, as a group, lack either the direct or indirect ability through voting rights or similar rights to make decisions that have a significant effect on the success of the entity or the obligation to absorb the entity’s expected losses or right to receive the entity’s expected residual returns, or (c) the voting rights of some equity investors are disproportionate to their obligation to absorb losses of the entity, their rights to receive returns from an entity, or both and substantially all of the entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights.

Under the VIE model, limited partnerships are considered a VIE unless the limited partners hold substantive kick-out or participating rights over the general partner. The Company consolidates entities that are VIEs when the Company determines it is the primary beneficiary. Generally, the primary beneficiary of a VIE is a reporting entity that has (a) the power to direct the activities that most significantly affect the VIE’s economic performance, and (b) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE.

Loans Held for Investment

Loans Held for Investment

    The Company originates, acquires, and structures real estate-related loans generally to be held to maturity. Loans held for investment are carried at the principal amount outstanding, adjusted for the accretion of discounts on investments and exit fees, and the amortization of premiums on investments and origination fees. The Company’s preferred equity investments, which are economically similar to mezzanine loans and subordinate to any loans but senior to common equity, are accounted for as loans held for investment. Loans are carried at cost less allowance for loan losses.

Allowance for Loan Losses

Allowance for Loan Losses

    The Company’s loans are typically collateralized by either the sponsors’ equity interest in the real estate properties or the underlying real estate properties. As a result, the Company regularly evaluates the extent and impact of any credit migration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan-by-loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations and/or reserve balances are sufficient to cover the debt service requirements currently and into the future; (ii) the ability of the borrower to refinance the loan; and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of the sponsor as well as its competency in managing and operating the real estate property. In addition, the Company considers the overall economic environment, real estate sector, and geographic sub-market in which the borrower operates. Such analyses are completed and reviewed by asset management and finance personnel, who utilize various data sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, the capitalization and discount rates; (ii) site inspections; and (iii) current credit spreads and discussions with market participants.

    The Manager performs a quarterly evaluation for possible impairment of the Company’s portfolio of loans. A loan is impaired if it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan. Impairment is measured based on the present value of expected future cash flows or the fair value of the collateral if the loan is collateral dependent. Upon measurement of impairment, the Company records an allowance to reduce the carrying value of the loan with a corresponding charge to net income.

    In conjunction with the quarterly evaluation of loans not considered impaired, the Manager assesses the risk factors of each loan and assigns each loan a risk rating between 1 and 5, which is an average of the numerical ratings in the following categories: (i) sponsor capability and financial condition; (ii) loan and collateral performance relative to underwriting; (iii) quality and stability of collateral cash flows and/or reserve balances; and (iv) loan to value. Based on a 5-point scale, the Company’s loans are rated “1” through “5”, from less risk to greater risk, as follows:

Risk Rating	Description
1	Very low risk
2	Low risk
3	Moderate/average risk
4	Higher risk
5	Highest risk

    The Company records an allowance for loan losses equal to (i) 1.5% of the aggregate carrying amount of loans rated as a “4”, plus (ii) 5% of the aggregate carrying amount of loans rated as a “5”, plus (iii) impaired loan reserves, if any.

Troubled Debt Restructuring Policy

There may be circumstances where the Company modifies a loan by granting the borrower a concession that it might not otherwise consider when a borrower is experiencing financial difficulty or is expected to experience financial difficulty in the foreseeable future. Such concessionary modifications are classified as troubled debt restructurings (“TDR”s) unless the modification solely results in a delay in a payment that is insignificant. Loans classified as TDRs are considered impaired loans for reporting and measurement purposes.

Equity Investment in a Limited Partnership

Equity Investment in Unconsolidated Investments

The Company accounts for its equity interests in unconsolidated investments under the equity method of accounting, i.e., at cost, increased or decreased by its share of earnings or losses, less distributions, plus contributions and other adjustments required by equity method accounting.

The Company evaluates its equity investment unconsolidated investments on a periodic basis to determine if there are any indicators that the value of its equity investments may be impaired and whether or not that impairment is other-than-temporary. To the extent an impairment has occurred and is determined to be other-than-temporary, the Company measures the charge as the excess of the carrying value of its investment over its estimated fair value, which is determined by calculating its share of the estimated fair market value of the underlying net assets based on the terms of the applicable partnership or joint venture agreements.

Marketable Securities Policy

Marketable Securities    The Company from time to time invests in short term debt and equity securities. These securities are classified as available-for-sale and are carried at fair value. Changes in the fair value of equity securities are recognized in earnings. Changes in the fair value of debt securities are reported in other comprehensive income until a gain or loss on the securities is realized.

Real Estate Owned

Real Estate Owned, Net

    Real estate acquired is recorded at its estimated fair value at acquisition and is shown net of accumulated depreciation and impairment charges.

    Acquisition of properties generally are accounted for as asset acquisitions. Under asset acquisition accounting, the costs to acquire real estate, including transaction costs, are accumulated and then allocated to individual assets and liabilities acquired based upon their relative fair value. The Company allocates the purchase price of its real estate acquisitions to land, building, tenant improvements, acquired in-place leases, intangibles for the value of any above or below market leases at fair value and to any other identified intangible assets or liabilities. The Company amortizes the value allocated to in-place leases over the remaining lease term, which is reported in depreciation and amortization expense on its consolidated statements of operations. The value allocated to above or below market leases are amortized over the remaining lease term as an adjustment to rental income.

    Real estate assets are depreciated using the straight-line method over their estimated useful lives: buildings and improvements - not to exceed 40 years, and tenant improvements - shorter of the lease term or life of the asset. Ordinary repairs and maintenance which are not reimbursed by the tenants are expensed as incurred. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their estimated useful life.

    Management reviews the Company’s real estate for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The review of recoverability is based on estimated future cash flows and the estimated liquidation value of such real estate assets, and provide for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the real estate assets. If impaired, the real estate asset will be written down to its estimated fair value.

Lessee, Leases Policy

Leases

    The Company determines if an arrangement is a lease at inception. Operating leases in which the Company is the lessee are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets. 

    ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s lease typically does not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made in advance and excludes lease incentives if there were any. The Company’s lease term may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Revenue Recognition

Revenue Recognition

    Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

    Interest Income: Interest income is accrued based upon the outstanding principal amount and contractual terms of the loans and preferred equity investments that the Company expects to collect and it is accrued and recorded on a daily basis. Discounts and premiums on investments purchased are accreted or amortized over the expected life of the respective loan using the effective yield method, and are included in interest income in the consolidated statements of operations. Loan origination fees and exit fees, net of portions attributable to obligations under participation agreements, are capitalized and amortized or accreted to interest income over the life of the investment using the effective yield method. Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in the opinion of the Manager, recovery of income and principal becomes doubtful. Outstanding interest receivable is assessed for recoverability. Interest is then recorded on the basis of cash received until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability.

    The Company holds loans in its portfolio that contain paid-in-kind (“PIK”) interest provisions. The PIK interest, which represents contractually deferred interest that is added to the principal balance that is due at maturity, is recorded on the accrual basis.

    Real Estate Operating Revenues: Real estate operating revenue is derived from leasing of space to various types of tenants. The leases are for fixed terms of varying length and generally provide for annual rent increases and expense reimbursements to be paid in monthly installments. Lease revenue, or rental income from leases, is recognized on a straight-line basis over the term of the respective leases. Additionally, the Company recorded above- and below-market lease intangibles, which are included in real estate owned, net, in connection with the acquisition of the real estate properties. These intangible assets and liabilities are amortized to lease revenue over the remaining contractual lease term.

    Other Revenues: Prepayment fee income is recognized as prepayments occur. All other income is recognized when earned.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments, with original maturities of ninety days or less when purchased, as cash equivalents. Cash and cash equivalents are exposed to concentrations of credit risk. The Company maintains all of its cash at financial institutions which, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation.

    Restricted cash represents cash held as additional collateral by the Company on behalf of the borrowers related to the investments in loans or preferred equity instruments for the purpose of such borrowers making interest and property-related operating payments. Restricted cash is not available for general corporate purposes. The related liability is recorded in “Interest reserve and other deposits held on investments” on the consolidated balance sheets.

    Cash held in escrow by lender represents amounts funded to an escrow account for debt services and tenant improvements.

    The following table provides a reconciliation of cash, cash equivalents and restricted cash in the Company’s consolidated balance sheets to the total amount shown in its consolidated statements of cash flows:

	December 31,
	2021		2020
Cash and cash equivalents	$	35,783,956	$	18,607,952
Restricted cash	7,411,811		12,145,616
Cash held in escrow by lender	7,902,880		2,166,755
Total cash, cash equivalents and restricted cash shown in the consolidated    statements of cash flows	$	51,098,647	$	32,920,323

Participation Interests

Participation InterestsLoan participations from the Company which do not qualify for sale treatment remain on the Company’s consolidated balance sheets and the proceeds are recorded as obligations under participation agreements. For the investments for which participation has been granted, the interest earned on the entire loan balance is recorded within “Interest income” and the interest related to the participation interest is recorded within “Interest expense from obligations under participation agreements” in the consolidated statements of operations. Interest expense from obligations under participation agreement is reversed when recovery of interest income on the related loan becomes doubtful. See “Obligations under Participation Agreements” in Note 9 for additional information.

Term Loan

Term Loan     The Company finances certain of its senior loans through borrowings under an indenture and credit agreement. The Company accounts for the borrowings as a term loan, which is carried at the contractual amount (cost), net of unamortized deferred financing fees.

Repurchase Agreements

Repurchase Agreement The Company financed certain of its senior loans through repurchase transactions under a master repurchase agreement. The Company accounted for the repurchase transactions as secured borrowing transactions, which are carried at their contractual amounts (cost), net of unamortized deferred financing fees.

Fair Value Measurement Policy

Fair Value Measurements

    United States generally accepted accounting principles (“U.S. GAAP”) establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The Company has not elected the fair value option for its financial instruments, including loans held for investment, loans held for investment acquired through participation, obligations under participation agreements, secured borrowing, unsecured notes, mortgage loan payable, term loan payable, repurchase agreement payment and revolving line of credit. Such financial instruments are carried at cost, less impairment, where applicable. Marketable securities are financial instruments that are reported at fair value.

The Company adopted the provisions of ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 established a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment, the characteristics specific to the investment, and the state of the marketplace (including the existence and transparency of transactions between market participants). Investments with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Investments measured and reported at fair value are classified and disclosed into one of the following categories based on the inputs as follows:

Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access.

Level 2 — Pricing inputs are other than quoted prices in active markets, including, but not limited to, quoted prices for similar assets and liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs.

      Level 3 — Significant unobservable inputs are based on the best information available in the circumstances, to the extent observable inputs are not available, including the Company’s own assumptions used in determining the fair value of investments. Fair value for these investments are determined using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance, and financing transactions subsequent to the acquisition of the investment. The inputs into the determination of fair value require significant management judgment.

     In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

As of December 31, 2021 and 2020, the Company has not elected the fair value option for its financial instruments, including loans held for investment, loans held for investment acquired through participation, obligations under participation agreements, secured borrowing, term loan payable, repurchase agreement payable, mortgage loan payable and revolving line of credit. Such financial instruments are carried at cost, less impairment or less net deferred costs, where applicable. Marketable securities are financial instruments that are reported at fair value.

Deferred Financing Costs Policy

Deferred Financing Costs    Deferred financing costs represent fees and expenses incurred in connection with obtaining financing for investments. These costs are presented in the consolidated balance sheets as a direct deduction of the debt liability to which the costs pertain. These costs are amortized using the effective interest method and are included in interest expense on the applicable borrowings in the consolidated statements of operations over the life of the borrowings.

Income Taxes

Income Taxes

    The Company has elected to be taxed as a REIT under the Internal Revenue Code commencing with the taxable year ended December 31, 2016. In order to qualify as a REIT, the Company is required, among other things, to distribute at least 90% of its REIT net taxable income to the stockholders and meet certain tests regarding the nature of its income and assets. As a REIT, the Company is not subject to federal income taxes on income and gains distributed to the stockholders as long as certain requirements are satisfied, principally relating to the nature of income and the level of distributions, as well as other factors. If the Company fails to continue to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal and state income taxes at regular corporate rates (including any

applicable alternative minimum tax for taxable years before 2018) beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years. Any gains from the sale of foreclosed properties within two years are subject to U.S. federal and state income taxes at regular corporate rates. As of December 31, 2021, the Company has satisfied all the requirements for a REIT. The Company did not have any uncertain tax positions that met the recognition or measurement criteria of Accounting Standards Codification (“ASC”) 740-10-25, Income Taxes, nor did the Company have any unrecognized tax benefits as of the periods presented herein. The Company recognizes interest and penalties, if any, related to unrecognized tax liabilities as income tax expense in its consolidated statements of operations. For the years ended December 31, 2021 and 2020, the Company did not incur any interest or penalties. Although the Company files federal and state tax returns, its major tax jurisdiction is federal. The Company’s 2018-2020 federal tax returns remain subject to examination by the Internal Revenue Service.

Earnings Per Share

Earnings Per Share

    The Company has a simple equity capital structure with only common stock and preferred stock outstanding. As a result, earnings per share, as presented, represent both basic and dilutive per-share amounts for the periods presented in the consolidated financial statements. Income per basic share of common stock is calculated by dividing net income allocable to common stock by the weighted-average number of shares of common stock issued and outstanding during such period.

Use of Estimates

Use of Estimates

    The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates, and those differences could be material.

The coronavirus (“COVID-19”) pandemic has had a significant impact on local, national and global economies and has resulted in a world-wide economic slowdown. However, after two years into the COVID-19 pandemic, the real estate market has started to recover from the dislocation it experienced over the past year. A strong pace of vaccination along with aggressive fiscal stimulus, has improved the outlook for the real estate market. The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its investments and operations. The Company believes the estimates and assumptions underlying its financial statements are reasonable and supportable based on the information available as of December 31, 2021; however, the extent to which the COVID-19 pandemic may impact the Company’s investments and operations going forward will depend on future developments, which are highly uncertain and cannot be predicted with confidence. These developments include the duration of the outbreak, the impact of the global vaccination effort, any new strains of the virus that are resistant to available vaccines, the impact of government stimulus, new information that may emerge concerning the severity of the COVID-19 pandemic, and actions taken by federal, state and local agencies as well as the general public to contain the COVID-19 pandemic or treat its impact, among others. Accordingly, any estimates and assumptions as of December 31, 2021 are inherently less certain than they would be absent the current and potential impacts of the COVID-19 pandemic.

Segment Reporting

Segment Information    The Company’s primary business is originating, acquiring and structuring real estate-related loans related to high quality commercial real estate. From time to time, the Company may acquire real estate encumbering the senior loans through foreclosure. However, management treats the operations of the real estate acquired through foreclosure as the continuation of the original senior loans. The Company operates in a single segment focused on mezzanine loans, other loans and preferred equity investments, and to a lesser extent, owning and managing real estate.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

    In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. In April 2019, the FASB issued additional amendments to clarify the scope of ASU 2016-13 and address issues related to accrued interest receivable balances, recoveries, variable interest rates and prepayments, among other things. In May 2019, the FASB issued ASU 2019-05 — Targeted Transition Relief, which provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. In October 2019, the FASB decided that for smaller reporting companies, ASU 2016-13 and related amendments will be effective for fiscal years beginning

after December 15, 2022, including interim periods within those fiscal years. The Company meets the definition of a smaller reporting company under the regulation of the Securities and Exchange Commission. As such, the Company will adopt this ASU and related amendments on January 1, 2023. Management is currently evaluating the impact this change will have on the Company’s consolidated financial statements and disclosures.

    London Interbank Offered Rate (“LIBOR”) is a benchmark interest rate referenced in a variety of agreements that are used by all types of entities. In July 2017, the U.K. Financial Conduct Authority, which regulates the LIBOR administrator, ICE Benchmark Administration Limited (“IBA”), announced that it would cease to compel banks to participate in setting LIBOR as a benchmark by the end of 2021, which has subsequently been delay to June 30, 2023. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) — Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition (“ASU 2021-01”). ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. In the event LIBOR is unavailable, the Company’s investment documents provide for a substitute index, on a basis generally consistent with market practice, intended to put the Company in substantially the same economic position as LIBOR. As a result, the Company does not expect the reference rate reform and the adoption of ASU 2020-04 and ASU 2021-01 to have a material impact on its consolidated financial statements and disclosures.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash in the Company’s consolidated balance sheets to the total amount shown in its consolidated statements of cash flows:

	December 31,
	2021		2020
Cash and cash equivalents	$	35,783,956	$	18,607,952
Restricted cash	7,411,811		12,145,616
Cash held in escrow by lender	7,902,880		2,166,755
Total cash, cash equivalents and restricted cash shown in the consolidated    statements of cash flows	$	51,098,647	$	32,920,323

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Merger and Issuance of Common Stock to Terra Offshore REIT (Tables)

12 Months Ended

Dec. 31, 2021

Terra Property Trust 2 Inc

Business Acquisition

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table presents a summary of the consideration exchanged and settlement of the Company’s obligations under participation agreements as a result of the Merger:

Total Consideration
Equity issued in the Merger	$	34,630,615
	$	34,630,615
Net Assets of TPT2 Received in the Merger
Loans held for investment acquired through participation	$	17,688,741
Cash and cash equivalents	16,897,074
Interest receivable	134,543
Other assets	18,384
Accounts payable and accrued expenses	(57,433)
Due to Manager	(50,694)
Total identifiable net assets	$	34,630,615

Terra Offshore Funds REIT

Business Acquisition

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table presents a summary of the consideration exchanged and settlement of the Company’s obligations under participation agreements as a result of the Issuance of Common Stock to Terra Offshore REIT:

Total Consideration
Equity issued to Terra Offshore REIT	$	40,749,378
	$	40,749,378
Net Assets of Terra Offshore REIT Received
Investments through participation interest, at fair value	$	32,112,257
Cash and cash equivalents	8,600,000
Interest receivable	270,947
Due to Manager	(233,826)
Total identifiable net assets	$	40,749,378

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Loans Held for Investment (Tables)

12 Months Ended

Dec. 31, 2021

Receivables [Abstract]

Summary Investment Holdings

The following table provides a summary of the Company’s loan portfolio as of December 31, 2021 and 2020:

	December 31, 2021									December 31, 2020
	Fixed Rate			Floating Rate (1)(2)(3)			Total			Fixed Rate			Floating Rate (1)(2)(3)			Total
Number of loans	6			15			21			6			14			20
Principal balance	$	74,880,728		$	405,270,423		$	480,151,151		$	56,335,792		$	367,838,966		$	424,174,758
Carrying value	$	75,520,212		$	394,153,102		$	469,673,314		$	56,464,310		$	365,816,205		$	422,280,515
Fair value	$	75,449,410		$	391,752,209		$	467,201,619		$	56,284,334		$	363,122,860		$	419,407,194
Weighted-average coupon rate	12.39		%	7.01		%	7.85		%	12.17		%	7.95		%	8.51		%
Weighted-average remaining  term (years)	1.93			1.45			1.53			1.78			1.44			1.48

_______________

(1)These loans pay a coupon rate of LIBOR plus a fixed spread. Coupon rate shown was determined using LIBOR of 0.10% and 0.14% as of December 31, 2021 and 2020, respectively.

(2)As of December 31, 2021 and 2020, amounts included $163.1 million and $184.2 million of senior mortgages used as collateral for $93.8 million and $107.6 million of borrowings under a term loan, respectively (Note 9). As of December 31, 2021, amounts also included $60.1 million of senior mortgages used as collateral for $38.6 million of borrowings under a revolving line of credit and $67.4 million of senior mortgages used as collateral for $44.6 million of borrowings under a repurchase agreement. Borrowings under the term loan bear interest at an annual rate of LIBOR plus 4.25% with a LIBOR floor of 1.00%. Borrowings under the revolving line of credit bear interest at a minimum rate of 4.0%. Borrowings under the repurchase agreement bears interest at an annual rate of LIBOR plus an applicable spread which ranges from 1.60% to 1.85%.

(3)As of December 31, 2021 and 2020, thirteen and twelve of these loans, respectively, are subject to a LIBOR floor.

Investment Holdings, Schedule of Investments

The following table presents the activities of the Company’s loan portfolio for the years ended December 31, 2021 and 2020:

	Loans Held for Investment		Loans Held for Investment through Participation Interests		Total
Balance, January 1, 2021	$	417,986,462	$	4,294,053	$	422,280,515
New loans made	240,130,367		12,307,366		252,437,733
Principal repayments received	(192,530,456)		(4,250,000)		(196,780,456)
PIK interest (1)	1,955,109		—		1,955,109
Net amortization of premiums on loans	(61,390)		—		(61,390)
Accrual, payment and accretion of investment-related fees and other,    net	1,405,206		(7,687)		1,397,519
Realized loss on loan repayments (2)(3)	(651,553)		—		(651,553)
Provision for loan losses	(10,904,163)		—		(10,904,163)
Balance, December 31, 2021	$	457,329,582	$	12,343,732	$	469,673,314

	Loans Held for Investment		Loans Held for Investment through Participation Interests		Total
Balance, January 1, 2020	$	375,462,222	$	3,150,546	$	378,612,768
New loans made	107,359,299		1,129,112		108,488,411
Principal repayments received	(66,144,729)		—		(66,144,729)
PIK interest (1)	4,442,759		—		4,442,759
Net amortization of premiums on loans	(61,391)		—		(61,391)
Accrual, payment and accretion of investment-related fees, net	667,060		14,395		681,455
Provision for loan losses	(3,738,758)		—		(3,738,758)
Balance, December 31, 2020	$	417,986,462	$	4,294,053	$	422,280,515

_______________

(1)Certain loans in the Company’s portfolio contain PIK interest provisions. The PIK interest represents contractually deferred interest that is added to the principal balance. PIK interest related to obligations under participation agreements amounted to $1.0 million and $1.5 million for the years ended December 31, 2021 and 2020, respectively.

(2)On September 2, 2021, the Company foreclosed on a hotel property encumbered by a first mortgage and the related subordinated mezzanine loan, both of which were held by the Company, with an aggregate principal balance $14.6 million. On September 23, 2021, the hotel property was sold to a third party for $13.8 million. The net proceeds from the sale, together with a payment under a contractual guarantee of $0.8 million from the borrower, were used to pay off both loans in full. In connection with the loan repayment, the related obligation under participation agreement of $6.4 million was simultaneously satisfied. In connection with the loan repayment, the Company recorded a loss of $0.4 million related to the write-off of the interest accrued but uncollected in the third quarter of 2021, excluding the amount attributable to obligations under participation agreements of $0.1 million.

(3)Amount also included realized loss of $0.3 million related to the TDR transaction described below.

Schedule of Accounts, Notes, Loans and Financing Receivable

The tables below detail the types of loans in the Company’s loan portfolio, as well as the property type and geographic location of the properties securing these loans as of December 31, 2021 and 2020:

	December 31, 2021						December 31, 2020
Loan Structure	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
First mortgages	$	345,454,454	$	348,101,455	74.0	%	$	254,042,847	$	255,093,989	60.5	%
Preferred equity investments	92,252,340		92,400,572		19.7	%	141,590,632		142,002,144		33.6	%
Mezzanine loans	17,444,357		17,622,804		3.8	%	28,541,279		28,923,140		6.8	%
Credit facility	25,000,000		25,206,964		5.4	%	—		—		—	%
Allowance for loan losses	—		(13,658,481)		(2.9)	%	—		(3,738,758)		(0.9)	%
Total	$	480,151,151	$	469,673,314	100.0	%	$	424,174,758	$	422,280,515	100.0	%

	December 31, 2021						December 31, 2020
Property Type	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
Office	$	221,596,870	$	222,426,872	47.3	%	$	182,698,225	$	183,053,751	43.3	%
Multifamily	80,805,787		81,835,756		17.4	%	150,873,173		151,768,347		35.9	%
Hotel - full/select service	56,847,381		57,395,682		12.2	%	49,142,809		49,393,251		11.7	%
Industrial	32,000,000		32,206,964		6.9	%	7,000,000		7,000,000		1.7	%
Student housing	31,000,000		31,565,670		6.7	%	3,000,000		3,204,375		0.8	%
Infill land	28,960,455		28,923,827		6.2	%	10,442,567		10,537,512		2.5	%
Mixed use	28,940,658		28,977,024		6.2	%	16,767,984		16,767,984		4.0	%
Hotel - extended stay	—		—		—	%	4,250,000		4,294,053		1.0	%
Allowance for loan losses	—		(13,658,481)		(2.9)	%	—		(3,738,758)		(0.9)	%
Total	$	480,151,151	$	469,673,314	100.0	%	$	424,174,758	$	422,280,515	100.0	%

During the first quarter of 2021, the Company reclassified the property types of collateral on certain loans to multifamily to better reflect the tenant mix of each property. Additionally, the Company categorized hotel properties further to hotel - full/selected service and hotel - extended stay. The prior period amounts have been reclassified to conform to the current period presentation.

	December 31, 2021						December 31, 2020
Geographic Location	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
United States
California	$	234,968,151	$	237,015,597	50.4	%	$	200,279,688	$	200,990,328	47.6	%
New York	92,252,340		92,400,572		19.7	%	79,187,004		79,310,276		18.8	%
Georgia	53,289,288		53,536,884		11.4	%	74,116,787		74,505,752		17.6	%
North Carolina	44,492,971		44,704,699		9.5	%	33,242,567		33,438,806		7.9	%
Utah	28,000,000		28,420,056		6.1	%	—		—		—	%
Texas	13,625,000		13,725,690		2.9	%	3,848,712		3,887,200		0.9	%
Massachusetts	7,000,000		7,000,000		1.5	%	7,000,000		7,000,000		1.7	%
Washington	3,523,401		3,382,683		0.7	%	23,500,000		23,682,536		5.6	%
South Carolina	3,000,000		3,145,614		0.7	%	3,000,000		3,204,375		0.8	%
Allowance for loan losses	—		(13,658,481)		(2.9)	%	—		(3,738,758)		(0.9)	%
Total	$	480,151,151	$	469,673,314	100.0	%	$	424,174,758	$	422,280,515	100.0	%

The following table allocates the principal balance and the carrying value of the Company’s loans based on the loan risk rating as of December 31, 2021 and 2020:

	December 31, 2021							December 31, 2020
Loan Risk Rating	Number of Loans	Principal Balance		Carrying Value		% of Total		Number of Loans	Principal Balance		Carrying Value		% of Total
1	—	$	—	$	—	—	%	—	$	—	$	—	—	%
2	2	25,000,000		25,041,124		5.2	%	1	7,000,000		7,000,000		1.6	%
3	15	349,273,811		352,164,409		72.9	%	14	323,696,475		325,284,285		76.4	%
4	1	60,012,639		60,012,639		12.4	%	3	72,861,587		73,079,804		17.2	%
5	—	—		—		—	%	1	3,848,712		3,887,200		0.9	%
Other (1)	3	45,864,701		46,113,623		9.5	%	1	16,767,984		16,767,984		3.9	%
	21	$	480,151,151	483,331,795		100.0	%	20	$	424,174,758	426,019,273		100.0	%
Allowance for loan losses				(13,658,481)							(3,738,758)
Total, net of allowance for loan losses				$	469,673,314						$	422,280,515

_______________

(1)Because these loans have an event of default, they are removed from the pool of loans on which a general allowance is calculated and are evaluated for collectibility individually. As of December 31, 2021 and 2020, the specific allowance for loan losses on these loans were $12.8 million and $2.5 million, respectively, as a result of a decline in the fair value of the respective collateral.

Allowance for loan losses

The following table presents the activity in the Company’s allowance for loan losses for the years ended December 31, 2021 and 2020:

	Years Ended December 31,
	2021		2020
Allowance for loan losses, beginning of period	$	3,738,758	$	—
Provision for loan losses	10,904,163		3,738,758
Charge-offs (1)	(984,440)		—
Recoveries	—		—
Allowance for loan losses, end of period	$	13,658,481	$	3,738,758

Summarizes the recorded investment of TDR

The following table summarizes the recorded investment of TDR as of the date of restructuring:

Number of loans modified	1
Pre-modified recorded carrying value	$	18,503,470
Post-modified recorded carrying value (1)	$	13,625,000

_______________

(1)As of December 31, 2021, the principal balance of this loan was $13.6 million and the carrying value of this loan, which includes the present value of the exit fee, was $13.7 million. There is no allowance for loan losses recorded for this new senior loan.

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Equity Investment in Unconsolidated Investments (Tables)

12 Months Ended

Dec. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

The following tables present summarized financial information of the Company’s equity investment in RESOF. Amounts provided are the total amounts attributable to the investment and do not represent the Company’s proportionate share:

	December 31,
	2021		2020
Investments at fair value (cost of $107,261,022 and $44,174,031, respectively)	$	108,359,898	$	44,715,979
Other assets	5,484,087		5,331,840
Total assets	113,843,985		50,047,819
Revolving line of credit, net of financing costs	14,909,717		—
Obligations under participation agreement (proceeds of $14,252,357 and $6,295,100,     respectively)	14,351,617		6,347,478
Other liabilities	5,296,603		4,204,147
Total liabilities	34,557,937		10,551,625
Partners’ capital	$	79,286,048	$	39,496,194

	Years Ended December 31,
	2021		2020
Total investment income	$	11,769,083	$	239,837
Total expenses	2,381,145		614,362
Net investment income (loss)	9,387,938		(374,525)
Unrealized appreciation on investments	524,113		417,300
Net increase in partners' capital resulting from operations	$	9,912,051	$	42,775

The following tables present estimated combined summarized financial information of the Company’s equity investment in the joint ventures. Amounts provided are the total amounts attributable to the joint ventures and do not represent the Company’s proportionate share:

	December 31,
	2021		2020
Net investments in real estate	$	115,636,424	$	—
Other assets	4,856,249		—
Total assets	120,492,673		—
Mortgage loan payable	83,445,235		—
Other liabilities	1,305,572		—
Total liabilities	84,750,807		—
Members’ capital	$	35,741,866	$	—

	Years Ended December 31,
	2021		2020
Revenues	$	1,448,431	$	—
Expenses	1,752,076		—
Net loss	$	(303,645)	$	—

Schedule of Joint Venture Ownership Interests

The following table presents the Company’s ownership interests in its equity investments in the joint ventures and their respective carrying values:

		Ownership Interest at December 31, 2021	Carrying Value at December 31,
Entity	Co-owner		2021		2020
LEL Arlington JV LLC	Third party	80%	$	23,949,044	$	—
LEL NW 49th JV LLC	Third party	80%	5,306,467		—
			$	29,255,511	$	—

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Real Estate Owned, Net (Tables)

12 Months Ended

Dec. 31, 2021

Real Estate [Abstract]

Components of real estate owned, net

The following table presents the components of real estate owned, net:

	December 31, 2021						December 31, 2020
	Cost		Accumulated Depreciation/Amortization		Net		Cost		Accumulated Depreciation/Amortization		Net
Real estate:
Land	$	10,000,000	$	—	$	10,000,000	$	13,395,430	$	—	$	13,395,430
Building and building    improvements	51,725,969		(4,418,305)		47,307,664		51,725,969		(3,125,143)		48,600,826
Tenant improvements	1,854,640		(947,369)		907,271		1,854,640		(670,090)		1,184,550
Furniture and fixtures	236,000		(125,867)		110,133		236,000		(31,467)		204,533
Total real estate	63,816,609		(5,491,541)		58,325,068		67,212,039		(3,826,700)		63,385,339
Lease intangible assets:
In-place lease	14,982,538		(7,627,326)		7,355,212		15,852,232		(6,172,747)		9,679,485
Above-market rent	156,542		(59,983)		96,559		156,542		(42,427)		114,115
Total intangible assets	15,139,080		(7,687,309)		7,451,771		16,008,774		(6,215,174)		9,793,600
Lease intangible liabilities:
Below-market rent	(2,754,922)		1,496,125		(1,258,797)		(3,371,314)		1,702,800		(1,668,514)
Above-market ground lease	(8,896,270)		445,357		(8,450,913)		(8,896,270)		315,008		(8,581,262)
Total intangible liabilities	(11,651,192)		1,941,482		(9,709,710)		(12,267,584)		2,017,808		(10,249,776)
Total real estate	$	67,304,497	$	(11,237,368)	$	56,067,129	$	70,953,229	$	(8,024,066)	$	62,929,163

The following table presents the components of real estate operating revenues and expenses that are included in the consolidated statements of operations:

	Years Ended December 31,
	2021		2020
Real estate operating revenues:
Lease revenue	$	7,167,049	$	8,150,041
Other operating income	1,727,942		2,273,522
Total	$	8,894,991	$	10,423,563
Real estate operating expenses:
Utilities	$	208,098	$	166,003
Real estate taxes	1,401,279		1,925,999
Repairs and maintenances	645,316		659,934
Management fees	271,303		224,732
Lease expense, including amortization of above-market ground lease (1)	2,084,402		1,134,152
Other operating expenses	393,495		394,299
Total	$	5,003,893	$	4,505,119

_______________

(1)As discussed in “Leases” below, the multi-tenant office building is subject to a ground lease, for which the rent resets every five years. The last rent reset was on November 1, 2020. Based on information available to the Company as of November 1, 2020, including the fact that there was a global pandemic with a potentially significant negative impact on real estate values, the Company estimated the value of the land was no greater than the value on the date of foreclosure and continued

to accrue and pay rent at the then-existing rate. On June 2, 2021, the third-party appraisal process was completed, resulting in an increase of the annual base rent to $2.1 million from $1.3 million. The increase in base rent was retroactive back to November 1, 2020. The Company accounted for the change in base rent as a change in accounting estimate; as a result, the increase in rent from November 2020 through March 2021 was recorded in the period in which the change occurred, which is June 2021. Had the new base rent been recorded on November 1, 2020, lease expense including amortization of above-market ground lease would have been $1.7 million for the year ended December 31, 2021 and total real estate operating expenses would have been $4.7 million for the year ended December 31, 2021.

Future minimum rents, exclusive of renewals and expenses paid by tenants

Scheduled future minimum rents, exclusive of renewals and expenses paid by tenants, under non-cancelable operating leases at December 31, 2021 are as follows: 

Years Ending December 31,	Total
2022	$	7,214,814
2023	4,235,538
2024	4,380,043
2025	792,925
2026	816,724
Thereafter	2,414,440
Total	$	19,854,484

Scheduled annual net amortization of intangibles for each of the next five calendar years and thereafter

Based on the intangible assets and liabilities recorded at December 31, 2021, scheduled annual net amortization of intangibles for each of the next five calendar years and thereafter is as follows:

Years Ending December 31,	Net Decrease in Real Estate Operating Revenue (1)		Increase in Depreciation and Amortization (1)		Decrease in Rent Expense (1)		Total
2022	$	(926,553)	$	4,956,914	$	(130,348)	$	3,900,013
2023	(139,056)		1,093,878		(130,348)		824,474
2024	(139,056)		1,093,878		(130,348)		824,474
2025	17,556		87,121		(130,348)		(25,671)
2026	17,556		87,121		(130,348)		(25,671)
Thereafter	7,315		36,300		(7,799,173)		(7,755,558)
Total	$	(1,162,238)	$	7,355,212	$	(8,450,913)	$	(2,257,939)

_______________

(1)Amortization of below-market rent and above-market rent intangibles is recorded as an adjustment to lease revenues; amortization of in-place lease intangibles is included in depreciation and amortization; and amortization of above-market ground lease is recorded as a reduction to rent expense.

Supplemental balance sheet information related to the ground lease

Supplemental balance sheet information related to the ground lease was as follows:    

	December 31,
	2021			2020
Operating lease
Operating lease right-of-use asset (1)	$	27,394,936		$	16,105,888
Operating lease liability	$	27,394,936		$	16,105,888
Weighted average remaining lease term — operating lease (years)	64.8			65.8
Weighted average discount rate — operating lease	7.6		%	7.9		%

_______________(1)The operating lease ROU asset and liability were remeasured at June 30, 2021 based on the new base rent resulting from the ground rent reset.

Component of lease expense for the ground lease

The component of lease expense for the ground lease was as follows:

	Years Ended December 31,
	2021		2020
Operating lease cost (1)	$	2,214,750	$	1,264,500

_______________(1)The increase in operating lease cost was a result of the ground rent reset described above.

Supplemental non-cash information related to the ground lease

Supplemental non-cash information related to the ground lease was as follows:

	Years Ended December 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liability:
Operating cash flows from an operating lease	$	2,214,750	$	1,264,500
Right-of-use asset obtained in exchange for lease obligations:
Operating lease	$	2,214,750	$	1,264,500

Maturities of operating lease liabilities

Maturities of operating lease liability are as follows:

Years Ending December 31,	Operating Lease
2022	$	2,079,000
2023	2,079,000
2024	2,079,000
2025	2,079,000
2026	2,079,000
Thereafter	124,306,875
Total lease payments	134,701,875
Less: Imputed interest	(107,306,939)
Total	$	27,394,936

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair value measurements of marketable securities, by major class

The following tables present fair value measurements of marketable securities, by major class, as of December 31, 2021 and 2020, according to the fair value hierarchy:

	December 31, 2021
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Marketable Securities:
Equity securities	$	1,310,000	$	—	$	—	$	1,310,000
Total	$	1,310,000	$	—	$	—	$	1,310,000

	December 31, 2020
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Marketable Securities:
Equity securities	$	1,287,500	$	—	$	—	$	1,287,500
Total	$	1,287,500	$	—	$	—	$	1,287,500

Activities of the marketable securities

The following table presents the activities of the marketable securities for the periods presented.

	Years Ended December 31,
	2021		2020
Beginning balance	$	1,287,500	$	—
Purchases	6,479,148		6,039,567
Proceeds from sale	(6,608,396)		(6,023,723)
Reclassification of net realized gains on marketable securities into earnings	129,248		1,160,162
Unrealized gains on marketable securities	22,500		111,494
Ending balance	$	1,310,000	$	1,287,500

Fair Value Measurements, Nonrecurring

The following table presents the carrying value, which represents the principal amount outstanding, adjusted for the accretion of purchase discounts on loans and exit fees, and the amortization of purchase premiums on loans and origination fees, and estimated fair value of the Company’s financial instruments that are not carried at fair value on the consolidated balance sheets:

		December 31, 2021						December 31, 2020
	Level	Principal Amount		Carrying Value		Fair Value		Principal Amount		Carrying Value		Fair Value
Loans:
Loans held for investment	3	$	467,843,785	$	470,988,063	$	454,840,551	$	419,924,758	$	421,725,220	$	415,113,225
Loans held for investment    acquired through    participation	3	12,307,366		12,343,732		12,361,068		4,250,000		4,294,053		4,293,969
Allowance for loan losses		—		(13,658,481)		—		—		(3,738,758)		—
Total loans		$	480,151,151	$	469,673,314	$	467,201,619	$	424,174,758	$	422,280,515	$	419,407,194
Liabilities:
Term loan payable	3	$	93,763,470	$	91,940,062	$	94,344,595	$	107,584,451	$	105,245,801	$	107,248,555
Unsecured notes payable	1	85,125,000		81,856,799		85,210,125		—		—		—
Repurchase agreement payable	3	44,569,600		43,974,608		44,569,600		—		—		—
Obligations under participation    agreements	3	42,048,294		42,232,027		41,475,060		71,266,303		71,581,897		70,693,207
Mortgage loan payable	3	31,962,692		32,134,295		32,192,785		44,020,225		44,117,293		44,348,689
Secured borrowing	3	34,521,104		34,586,129		34,425,029		18,281,848		18,187,663		17,037,032
Revolving line of credit    payable	3	38,575,895		38,186,472		38,575,895		—		—		—
Total liabilities		$	370,566,055	$	364,910,392	$	370,793,089	$	241,152,827	$	239,132,654	$	239,327,483

Fair Value Measurement Inputs and Valuation Techniques

The following table summarizes the valuation techniques and significant unobservable inputs used by the Company to value the Level 3 loans as of December 31, 2021 and 2020. The tables are not intended to be all-inclusive, but instead identify the significant unobservable inputs relevant to the determination of fair values.

	Fair Value at December 31, 2021		Primary Valuation Technique	Unobservable Inputs	December 31, 2021
Asset Category					Minimum		Maximum		Weighted Average
Assets:
Loans held for investment, net	$	454,840,551	Discounted cash flow	Discount rate	3.89	%	15.00	%	8.11	%
Loans held for investment acquired through    participation, net	12,361,068		Discounted cash flow	Discount rate	8.25	%	15.00	%	12.33	%
Total Level 3 Assets	$	467,201,619
Liabilities:
Term loan payable	$	94,344,595	Discounted cash flow	Discount rate	4.00	%	4.00	%	4.00	%
Repurchase agreement payable	44,569,600		Discounted cash flow	Discount rate	2.45	%	2.74	%	2.57	%
Obligations under participation agreements	41,475,060		Discounted cash flow	Discount rate	12.37	%	15.00	%	14.31	%
Mortgage loan payable	32,192,785		Discounted cash flow	Discount rate	6.08	%	6.08	%	6.08	%
Secured borrowing	34,425,029		Discounted cash flow	Discount rate	6.64	%	6.64	%	6.64	%
Revolving line of credit	38,575,895		Discounted cash flow	Discount rate	4.00	%	4.00	%	4.00	%
Total Level 3 Liabilities	$	285,582,964

	Fair Value at December 31, 2020		Primary Valuation Technique	Unobservable Inputs	December 31, 2020
Asset Category					Minimum		Maximum		Weighted Average
Assets:
Loans held for investment, net	$	415,113,225	Discounted cash flow	Discount rate	5.29	%	20.05	%	10.38	%
Loans held for investment acquired through    participation, net	4,293,969		Discounted cash flow	Discount rate	12.89	%	12.89	%	12.89	%
Total Level 3 Assets	$	419,407,194
Liabilities:
Term loan payable	$	107,248,555	Discounted cash flow	Discount rate	5.25	%	5.25	%	5.25	%
Obligations under participation agreements	70,693,207		Discounted cash flow	Discount rate	9.75	%	20.05	%	12.58	%
Mortgage loan payable	44,348,689		Discounted cash flow	Discount rate	6.08	%	6.08	%	6.08	%
Secured borrowing	17,037,032		Discounted cash flow	Discount rate	11.25	%	11.25	%	11.25	%
Total Level 3 Liabilities	$	239,327,483

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2021

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The following table presents a summary of fees paid and costs reimbursed to the Manager in connection with providing services to the Company that are included on the consolidated statements of operations:

	Years Ended December 31,
	2021		2020
Origination and extension fee expense (1)(2)	$	2,729,598	$	1,383,960
Asset management fee	5,134,149		4,480,706
Asset servicing fee	1,181,924		1,008,256
Operating expenses reimbursed to Manager	6,916,371		6,041,075
Disposition fee (3)	1,006,302		504,611
Total	$	16,968,344	$	13,418,608

_______________

(1)Origination and extension fee expense is generally offset with origination and extension fee income. Any excess is deferred and amortized to interest income over the term of the loan.

(2)Amount for the years ended December 31, 2021 and 2020 excluded $0.3 million and $0.5 million of origination fee, respectively, paid to the Manager in connection with the Company’s equity investment in unconsolidated investments. These origination fees were capitalized to the carrying value of the unconsolidated investments as transaction costs.

(3)Disposition fee is generally offset with exit fee income and included in interest income on the consolidated statements of operations.

The table below lists the participation interests purchased by the Company pursuant to participation agreements as of December 31, 2021 and 2020.

	December 31, 2021
	Participating Interests	Principal Balance		Carrying Value
Hillsborough Owners LLC (1)	30.00%	$	4,863,009	$	4,866,542
UNJ Sole Member, LLC (2)	40.80%	7,444,357		7,477,190
		$	12,307,366	$	12,343,732

	December 31, 2020
	Participating Interests	Principal Balance		Carrying Value
LD Milpitas Mezz, LP (3)	25.00%	$	4,250,000	$	4,294,053

________________

(1)The loan is held in the name of Terra Income Fund 6, Inc. (“Terra Fund 6”), an affiliated fund advised by Terra Income Advisors, LLC, an affiliate of the Company’s sponsor and Manager.

(2)The loan is held in the name of Mavik Real Estate Special Opportunities Fund REIT, LLC, a related-party REIT managed by the Manager.

(3)On June 27, 2018, the Company entered into a participation agreement with Terra Fund 6 to purchase a 25% participation interest, or $4.3 million, in a $17.0 million mezzanine loan. This loan was repaid in full in May 2021.

The following tables summarize the loans that were subject to participation agreements with affiliated entities and third-parties as of December 31, 2021 and 2020:

					Transfers Treated as Obligations Under Participation Agreements as of December 31, 2021
	Principal Balance		Carrying Value		% Transferred		Principal Balance		Carrying Value
370 Lex Part Deux, LLC (1)	$	60,012,639	$	60,012,639	35.00	%	$	21,004,424	$	21,004,423
RS JZ Driggs, LLC (1)	15,606,409		15,754,641		50.00	%	7,806,370		7,880,516
William A. Shopoff & Cindy I. Shopoff (1)	25,000,000		25,206,964		52.95	%	13,237,500		13,347,088
	$	100,619,048	$	100,974,244			$	42,048,294	$	42,232,027

					Transfers Treated as Obligations Under Participation Agreements as of December 31, 2020
	Principal Balance		Carrying Value		% Transferred		Principal Balance		Carrying Value
14th & Alice Street Owner, LLC (2)(3)(4)	$	32,625,912	$	32,877,544	80.00	%	$	26,100,729	$	26,211,548
370 Lex Part Deux, LLC (1)	53,874,507		53,912,363		35.00	%	18,856,078		18,856,077
City Gardens 333 LLC (1)(4)	28,303,628		28,307,408		14.00	%	3,962,509		3,963,010
Orange Grove Property Investors, LLC (1)(4)	10,600,000		10,701,924		80.00	%	8,480,000		8,561,523
RS JZ Driggs, LLC (1)	8,544,513		8,629,929		50.00	%	4,272,257		4,314,965
Stonewall Station Mezz LLC (1)(4)	10,442,567		10,537,512		44.00	%	4,594,730		4,635,937
The Bristol at Southport, LLC (2)(4)	23,500,000		23,682,536		21.28	%	5,000,000		5,038,837
	$	167,891,127	$	168,649,216			$	71,266,303	$	71,581,897

________________

(1)Participant is Terra Fund 6.

(2)Participant is a third-party.

(3)The participation interest was transferred to an affiliate and/or a third-party pursuant to a participation agreement in the second quarter of 2021.

(4)The obligation under participation agreement was repaid in 2021.

The following table summarizes the loan that was transferred to a third-party that was accounted for as secured borrowing as of December 31, 2021 and 2020:

					Transfers Treated as Secured Borrowing as of December 31, 2021
	Principal Balance		Carrying Value		% Transferred		Principal Balance		Carrying Value
Windy Hill PV Five CM, LLC	$	49,954,068	$	50,264,568	69.11	%	$	34,521,104	$	34,586,129
	$	49,954,068	$	50,264,568			$	34,521,104	$	34,586,129

					Transfers Treated as Secured Borrowing as of December 31, 2020
	Principal Balance		Carrying Value		% Transferred		Principal Balance		Carrying Value
Windy Hill PV Five CM, LLC	$	26,454,910	$	26,407,494	69.11	%	$	18,281,848	$	18,187,663
	$	26,454,910	$	26,407,494			$	18,281,848	$	18,187,663

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Debt (Tables)

12 Months Ended

Dec. 31, 2021

Debt Instrument

Schedule of Line of Credit Facilities

The following tables present detailed information with respect to each borrowing under the Revolving Line of Credit as of December 31, 2021:

	December 31, 2021
	Borrowing Base						Borrowings Under the Revolving Line of Credit
	Principal Amount		Carrying Value		Fair Value
870 Santa Cruz, LLC	$	17,540,875	$	17,669,303	$	17,781,285	$	12,278,613
606 Fayetteville LLC and 401 E. Lakewood LLC	16,829,962		16,935,803		16,974,601		10,312,187
Austin H. I. Borrower LLC	13,625,000		13,725,690		13,735,569		7,493,750
D-G Acquistion #6, LLC and D-G Quimisa, LLC	8,607,092		8,605,341		8,645,413		6,024,965
The Lux Washington, LLC	3,523,401		3,382,683		3,553,330		2,466,380
	$	60,126,330	$	60,318,820	$	60,690,198	$	38,575,895

Schedule of Debt

The table below presents detailed information regarding the unsecured notes payable at December 31, 2021:

	December 31, 2021
	Principal Balance		Carrying Value (1)		Fair Value
Unsecured notes payable	$	85,125,000	$	81,856,799	$	85,210,125

_______________

(1)Amount is net of unamortized issue discount of $2.4 million and unamortized deferred financing costs of $0.9 million.

The following tables present detailed information with respect to each borrowing under the Term Loan as of December 31, 2021 and 2020:

	December 31, 2021
	Mortgage Assets						Borrowings Under the Term Loan (1)(2)
	Principal Amount		Carrying Value		Fair Value
330 Tryon DE LLC	$	22,800,000	$	22,902,354	$	22,594,654	$	13,680,000
1389 Peachtree St, LP; 1401 Peachtree St, LP; and    1409 Peachtree St, LP	53,289,288		53,536,884		52,031,363		31,283,661
AGRE DCP Palm Springs, LLC	43,222,381		43,669,992		43,829,842		23,146,265
Patrick Henry Recovery Acquisition, LLC	18,000,000		18,041,124		18,055,377		10,800,000
University Park Berkeley, LLC	25,815,378		25,991,962		26,015,500		14,853,544
	$	163,127,047	$	164,142,316	$	162,526,736	$	93,763,470

	December 31, 2020
	Mortgage Assets						Borrowings Under the Term Loan (1)(2)
	Principal Amount		Carrying Value		Fair Value
330 Tryon DE LLC	$	22,800,000	$	22,901,294	$	22,869,879	$	13,680,000
1389 Peachtree St, LP; 1401 Peachtree St, LP; and    1409 Peachtree St, LP	50,808,453		51,068,554		50,982,247		29,897,848
AGRE DCP Palm Springs, LLC	45,294,097		45,506,051		45,519,030		24,894,939
MSC Fields Peachtree Retreat, LLC	23,308,334		23,437,198		23,428,860		13,985,001
Patrick Henry Recovery Acquisition, LLC	18,000,000		18,039,456		17,994,495		10,800,000
University Park Berkeley, LLC	23,990,786		24,131,808		24,162,710		14,326,663
	$	184,201,670	$	185,084,361	$	184,957,221	$	107,584,451

_______________

(1)Borrowings under the Term Loan bear interest at LIBOR plus 4.25% with a LIBOR floor of 1.00%, or 5.25% as of both December 31, 2021 and 2020, using LIBOR of 0.10% and 0.14%, respectively.

(2)The maturity of the Term Loan is March 14, 2025, however the maturity of each borrowing under the Term Loan matches the maturity of the respective Mortgage Asset.

The following table presents detailed information with respect to each borrowing under the UBS Master Repurchase Agreement as of December 31, 2021:

	December 31, 2021
	Collateral						Borrowings Under Master Repurchase Agreement
	Principal Amount		Carrying Value		Fair Value		Borrowing Date	Principal Amount		Interest Rate
14th & Alice Street Owner, LLC	$	39,384,000	$	40,089,153	$	40,130,448	11/8/2021	$	25,599,600	LIBOR+1.45% (LIBOR floor of 0.1%)
NB Factory TIC 1, LLC	28,000,000		28,420,056		28,851,547		11/8/2021	18,970,000		LIBOR+1.74% (LIBOR floor of 0.1%)
	$	67,384,000	$	68,509,209	$	68,981,995		$	44,569,600

Mortgage note payable

The following table presents certain information about the mortgage loan payable as of December 31, 2021 and 2020:

			December 31, 2021						December 31, 2020
Lender	Current Interest Rate	Maturity Date	Principal Amount		Carrying Value		Carrying Value of Collateral		Principal Amount		Carrying Value		Carrying Value of Collateral
Centennial Bank	LIBOR + 3.85% (LIBOR Floor of 2.23%)	September 27, 2022	$	31,962,692	$	32,134,295	$	46,067,129	$	44,020,225	$	44,117,293	$	49,533,733

Schedule of Long-term Debt Instruments

Scheduled debt principal payments for each of the five calendar years following December 31, 2021 are as follows:

Years Ending December 31,	Total
2022	$	31,962,692
2023	38,575,895
2024	100,333,261
2025	37,999,809
2026	85,125,000
Thereafter	—
	293,996,657
Unamortized deferred financing costs	(5,904,421)
Total	$	288,092,236

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Equity (Tables)

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table presents earnings per share for the years ended December 31, 2021 and 2020:

	Years Ended December 31,
	2021		2020
Net (loss) income	$	(12,355,727)	$	5,255,730
Series A preferred stock dividend declared	(15,624)		(15,624)
Net (loss) income allocable to common stock	$	(12,371,351)	$	5,240,106
Weighted-average shares outstanding - basic and diluted	19,487,460		18,813,066
(Loss) earnings per share - basic and diluted	$	(0.63)	$	0.28

Dividends Declared

The following table presents distributions per share, declared and paid during the years ended December 31, 2021 and 2020, reported for federal tax purposes and serves as a designation of capital gain distributions, if applicable, pursuant to Section 857(b)(3)(C) of the Internal Revenue Code and Treasury Regulation § 1.857-6(e):

	Years Ended December 31,
	2021		2020
Ordinary income	$	0.07	$	0.48
Capital gain	0.06		—
Return of capital	0.75		0.68
	$	0.88	$	1.16

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Business (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Mar. 02, 2020
Financial Highlights
Loans held for investment	$ 469,673,314	$ 422,280,515
Cash			$ 25,500,000
Operations Commenced Date	Jan. 01, 2016
Common Stock, Shares, Issued	19,487,460	19,487,460	4,574,470.35
Participating Mortgage Loans, Participation Liabilities, Amount			$ 49,800,000
Minimum
Financial Highlights
Loans held for investment	$ 10,000,000
Maximum
Financial Highlights
Loans held for investment	$ 50,000,000
Partnership interest
Financial Highlights
Equity Method Investment, Ownership Percentage	87.40%

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Summary of Significant Accounting Policies (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Cash and cash equivalents	$ 35,783,956	$ 18,607,952
Restricted cash	7,411,811	12,145,616
Cash held in escrow by lender	7,902,880	2,166,755
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows	$ 51,098,647	$ 32,920,323	$ 50,549,700
Open Tax Year Start	2018
Open tax year end	2020

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Merger and Issuance of Common Stock to Terra Offshore REIT - Narratives - Mergers (Details) - $ / shares	2 Months Ended
	Mar. 01, 2020	Dec. 31, 2021	Dec. 31, 2020
Business Acquisition
Common Stock, Par Value		$ 0.01	$ 0.01
Terra Fund 7
Business Acquisition
Common Stock, Par Value	$ 0.01
Terra PropertyTrust
Business Acquisition
Common Stock, Par Value	0.01
Terra Property Trust 2 Inc
Business Acquisition
Common Stock, Par Value	0.01
Terra Property Trust 2 Inc | Common Stock
Business Acquisition
Business Acquisition Share Conversion Rate	$ 1.2031
Terra Fund 7
Business Acquisition
Business Combination Common Stock Shares	2,116,785.76

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Merger and Issuance of Common Stock to Terra Offshore REIT - Summary of the assets acquired and liabilities assumed (Details) - Terra Property Trust 2 Inc	2 Months Ended
	Mar. 01, 2020 USD ($)
Business Acquisition
Equity issued in the Merger	$ 34,630,615
Total Consideration	34,630,615
Net Assets of TPT2 Received in the Merger
Loans held for investment acquired through participation	17,688,741
Cash and cash equivalents	16,897,074
Interest receivable	134,543
Other assets	18,384
Accounts payable and accrued expenses	(57,433)
Due to Manager	(50,694)
Total identifiable net assets	$ 34,630,615

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Merger and Issuance of Common Stock to Terra Offshore REIT - Narratives - Issuance of Common Stock to Terra Offshore Funds (Details) - Terra Offshore Funds REIT $ / shares in Units, $ in Millions	Apr. 29, 2020 $ / shares shares	Mar. 02, 2020 USD ($) numberOfAgreements shares
Business Acquisition
Number of contribution agreements | numberOfAgreements		2
Settlement of participation interests in loans held | $		$ 32.1
Proceeds from issuance of common stock | $		$ 8.6
Stock issued in the transaction as consideration | shares		2,457,684.59
Stock Repurchased During Period, Shares | shares	212,691
Share Price | $ / shares	$ 17.02

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Merger and Issuance of Common Stock to Terra Offshore REIT - Issuance of Common Stock to Terra Offshore Funds (Details) - Terra Offshore Funds REIT	Mar. 02, 2020 USD ($)
Business Acquisition
Equity issued in the Merger	$ 40,749,378
Total Consideration	40,749,378
Loans held for investment acquired through participation	32,112,257
Cash and cash equivalents acquired in Merger	8,600,000
Interest receivable	270,947
Due to Manager	(233,826)
Total identifiable net assets	$ 40,749,378

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Merger and Issuance of Common Stock to Terra Offshore REIT - Narratives - Terra JV, LLC (Details)	12 Months Ended
	Dec. 31, 2021	Feb. 28, 2020
Terra JV
Business Acquisition
Equity Method Investment, Ownership Percentage	87.40%
Terra Fund 5
Business Acquisition
Equity Method Investment, Ownership Percentage		98.60%
Terra Fund 5 | Terra JV
Business Acquisition
Limited Liability Company or Limited Partnership, Members or Limited Partners, Ownership Interest	87.60%
Threshold For Nomination Rights	10.00%
Terra Fund 7 | Terra JV
Business Acquisition
Limited Liability Company or Limited Partnership, Members or Limited Partners, Ownership Interest	12.40%

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Merger and Issuance of Common Stock to Terra Offshore REIT - Narratives - Net loss on Obligations Under Participation Agreement (Details) $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($)
Business Combination, Separately Recognized Transactions [Line Items]
Net loss recognized	$ 0.3

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Loans Held for Investment - Summary of the Companys loan portfolio (Details)	12 Months Ended
	Dec. 31, 2021 USD ($) Loans	Dec. 31, 2020 USD ($) Loans
Loans and Financing Receivable
Number Of Loans | Loans	21	20
Principal Balance	$ 480,151,151	$ 424,174,758
Carrying Value	469,673,314	422,280,515
Fair Value	$ 467,201,619	$ 419,407,194
Weighted-average coupon rate	7.85%	8.51%
Weighted-average remaining term (years)	1 year 6 months 10 days	1 year 5 months 23 days
Fixed Rate
Loans and Financing Receivable
Number Of Loans | Loans	6	6
Principal Balance	$ 74,880,728	$ 56,335,792
Carrying Value	75,520,212	56,464,310
Fair Value	$ 75,449,410	$ 56,284,334
Weighted-average coupon rate	12.39%	12.17%
Weighted-average remaining term (years)	1 year 11 months 4 days	1 year 9 months 10 days
Floating rate
Loans and Financing Receivable
Number Of Loans | Loans	15	14
Principal Balance	$ 405,270,423	$ 367,838,966
Carrying Value	394,153,102	365,816,205
Fair Value	$ 391,752,209	$ 363,122,860
Weighted-average coupon rate	7.01%	7.95%
Weighted-average remaining term (years)	1 year 5 months 12 days	1 year 5 months 8 days

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Loans Held for Investment - Summary of the Company's loan portfolio - Subnote (Details)	12 Months Ended
	Dec. 31, 2021 USD ($) Loans	Dec. 31, 2020 USD ($) Loans
Loans and Financing Receivable
Repurchase agreement payable, net of deferred financing fees	$ 43,974,608	$ 0
Number Of Loans | Loans	21	20
Principal Balance	$ 480,151,151	$ 424,174,758
Principal amount	370,566,055	241,152,827
Floating rate
Loans and Financing Receivable
Principal Balance	405,270,423	$ 367,838,966
Loans Held For Investment Acquired Through Participation
Loans and Financing Receivable
Principal Balance	12,307,366
Revolving line of credit
Loans and Financing Receivable
Principal Balance	60,126,330
Principal amount	$ 38,575,895
Revolving line of credit | LIBOR
Loans and Financing Receivable
Debt Instrument, Basis Spread on Variable Rate	3.25%
Revolving line of credit | Floor rate
Loans and Financing Receivable
Debt Instrument, Basis Spread on Variable Rate	4.00%
Term Loan
Loans and Financing Receivable
Fixed rate	5.25%	5.25%
Principal Balance	$ 163,127,047	$ 184,201,670
Principal amount	$ 93,763,470	$ 107,584,451
Term Loan | LIBOR
Loans and Financing Receivable
Debt Instrument, Basis Spread on Variable Rate	4.25%	4.25%
Term Loan | Floor rate | LIBOR
Loans and Financing Receivable
Debt Instrument, Basis Spread on Variable Rate	1.00%	1.00%
Term Loan | Floating rate | LIBOR
Loans and Financing Receivable
Debt Instrument, Basis Spread on Variable Rate	0.10%	0.14%
Number Of Loans | Loans	13	12
Term Loan | Floating rate | Floor rate | LIBOR
Loans and Financing Receivable
Loans basis spread on variable rate	1.00%
Collateral | Repurchase Agreements | Floating rate
Loans and Financing Receivable
Principal Balance	$ 67,400,000
Principal amount	44,600,000
Collateral | Revolving line of credit | Floating rate
Loans and Financing Receivable
Principal Balance	60,100,000
Principal amount	$ 38,600,000
Collateral | Revolving line of credit | Floating rate | Minimum
Loans and Financing Receivable
Fixed rate	4.00%
Collateral | Term Loan | Floating rate
Loans and Financing Receivable
Principal Balance	$ 163,100,000	$ 184,200,000
Principal amount	93,800,000	$ 107,600,000
Uncommitted Master Repurchase Agreement
Loans and Financing Receivable
Repurchase agreement payable, net of deferred financing fees	44,569,600
Principal Balance	$ 67,384,000
Uncommitted Master Repurchase Agreement | Minimum | LIBOR
Loans and Financing Receivable
Debt Instrument, Basis Spread on Variable Rate	1.60%
Uncommitted Master Repurchase Agreement | Maximum | LIBOR
Loans and Financing Receivable
Debt Instrument, Basis Spread on Variable Rate	1.85%

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Loans Held for Investment - Lending activities (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Loans and Financing Receivable
PIK interest	$ 1,000,028	$ 2,937,909
Realized loss on loan repayments	517,989	0
Provision for loan losses	(10,904,163)	(3,738,758)
Real Estate Loan
Loans and Financing Receivable
Beginning balance	422,280,515	378,612,768
New loans made	252,437,733	108,488,411
Principal repayments received	(196,780,456)	(66,144,729)
PIK interest	1,955,109	4,442,759
Amortization of premiums	(61,390)	(61,391)
Accrual, payment and accretion of investment-related fees and other, net	1,397,519	681,455
Realized loss on loan repayments	(651,553)
Provision for loan losses	(10,904,163)	(3,738,758)
Ending balance	469,673,314	422,280,515
Real Estate Loan | Loans held for investment, net
Loans and Financing Receivable
Beginning balance	417,986,462	375,462,222
New loans made	240,130,367	107,359,299
Principal repayments received	(192,530,456)	(66,144,729)
PIK interest	1,955,109	4,442,759
Amortization of premiums	(61,390)	(61,391)
Accrual, payment and accretion of investment-related fees and other, net	1,405,206	667,060
Realized loss on loan repayments	(651,553)
Provision for loan losses	(10,904,163)	(3,738,758)
Ending balance	457,329,582	417,986,462
Real Estate Loan | Loans Held For Investment Acquired Through Participation
Loans and Financing Receivable
Beginning balance	4,294,053	3,150,546
New loans made	12,307,366	1,129,112
Principal repayments received	(4,250,000)	0
PIK interest	0	0
Amortization of premiums	0	0
Accrual, payment and accretion of investment-related fees and other, net	(7,687)	14,395
Realized loss on loan repayments	0
Provision for loan losses	0	0
Ending balance	$ 12,343,732	$ 4,294,053

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Loans Held for Investment - Lending activities - subnote (Details)	1 Months Ended	12 Months Ended
	Sep. 23, 2021 USD ($)	Dec. 31, 2021 USD ($) a	Dec. 31, 2020 USD ($)	Sep. 02, 2021 USD ($)	Mar. 02, 2020 USD ($)
Loans and Financing Receivable
Paid-in-Kind Interest		$ 1,000,028	$ 2,937,909
Area of Land | a		4.9
Cash					$ 25,500,000
Realized loss on loan repayments		$ 517,989	0
Real Estate Loan
Loans and Financing Receivable
Paid-in-Kind Interest		1,955,109	4,442,759
Realized loss on loan repayments		(651,553)
Loans held for investment, net | Real Estate Loan
Loans and Financing Receivable
Paid-in-Kind Interest		1,955,109	4,442,759
Realized loss on loan repayments		(651,553)
Loans Held For Investment Acquired Through Participation | Real Estate Loan
Loans and Financing Receivable
Paid-in-Kind Interest		0	0
Realized loss on loan repayments		0
Loans Held For Investment Acquired Through Participation | Real Estate Loan | Hotel - full/select service
Loans and Financing Receivable
Proceeds from sale of real properties held for investment	$ 13,800,000
Cash	800,000
Realized loss on loan repayments		400,000
Loans Held For Investment Acquired Through Participation | Real Estate Loan | Hotel - full/select service | TDR Transaction
Loans and Financing Receivable
Realized loss on loan repayments		300,000
First Mortgage | Loans Held For Investment Acquired Through Participation | Real Estate Loan | Hotel - full/select service
Loans and Financing Receivable
Principal balance				$ 14,600,000
Obligations Under Participation Agreements | Loans held for investment, net | Real Estate Loan
Loans and Financing Receivable
Paid-in-Kind Interest		1,000,000	$ 1,500,000
Obligations Under Participation Agreements | Loans Held For Investment Acquired Through Participation | Real Estate Loan | Hotel - full/select service
Loans and Financing Receivable
Principal balance	$ 6,400,000
Realized loss on loan repayments		$ 100,000

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Loans Held for Investment - Loan Structure (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Loans and Financing Receivable
Principal Balance	$ 480,151,151	$ 424,174,758
Carrying Value	483,331,795	426,019,273
Allowance for Loan and Lease Losses, Real Estate	(13,658,481)	(3,738,758)
Carrying Value	$ 469,673,314	$ 422,280,515
% of Total	100.00%	100.00%
Percent Of Allowance Of Loan Losses	(2.90%)	(0.90%)
Revolving Credit Facility
Loans and Financing Receivable
Principal Balance	$ 25,000,000	$ 0
Carrying Value	$ 25,206,964	$ 0
% of Total	5.40%	0.00%
First Mortgage
Loans and Financing Receivable
Principal Balance	$ 345,454,454	$ 254,042,847
Carrying Value	$ 348,101,455	$ 255,093,989
% of Total	74.00%	60.50%
Preferred Equity Investment
Loans and Financing Receivable
Principal Balance	$ 92,252,340	$ 141,590,632
Carrying Value	$ 92,400,572	$ 142,002,144
% of Total	19.70%	33.60%
Mezzanine Loans
Loans and Financing Receivable
Principal Balance	$ 17,444,357	$ 28,541,279
Carrying Value	$ 17,622,804	$ 28,923,140
% of Total	3.80%	6.80%

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Loans Held for Investment - Property Type (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Loans and Financing Receivable
Principal Balance	$ 480,151,151	$ 424,174,758
Carrying Value	483,331,795	426,019,273
Allowance for Loan and Lease Losses, Real Estate	(13,658,481)	(3,738,758)
Carrying Value	$ 469,673,314	$ 422,280,515
% of Total	100.00%	100.00%
Percent Of Allowance Of Loan Losses	(2.90%)	(0.90%)
Office
Loans and Financing Receivable
Principal Balance	$ 221,596,870	$ 182,698,225
Carrying Value	$ 222,426,872	$ 183,053,751
% of Total	47.30%	43.30%
Multifamily
Loans and Financing Receivable
Principal Balance	$ 80,805,787	$ 150,873,173
Carrying Value	$ 81,835,756	$ 151,768,347
% of Total	17.40%	35.90%
Hotel - full/select service
Loans and Financing Receivable
Principal Balance	$ 56,847,381	$ 49,142,809
Carrying Value	$ 57,395,682	$ 49,393,251
% of Total	12.20%	11.70%
Industrial
Loans and Financing Receivable
Principal Balance	$ 32,000,000	$ 7,000,000
Carrying Value	$ 32,206,964	$ 7,000,000
% of Total	6.90%	1.70%
Student Housing
Loans and Financing Receivable
Principal Balance	$ 31,000,000	$ 3,000,000
Carrying Value	$ 31,565,670	$ 3,204,375
% of Total	6.70%	0.80%
Infill Land
Loans and Financing Receivable
Principal Balance	$ 28,960,455	$ 10,442,567
Carrying Value	$ 28,923,827	$ 10,537,512
% of Total	6.20%	2.50%
Mixed use
Loans and Financing Receivable
Principal Balance	$ 28,940,658	$ 16,767,984
Carrying Value	$ 28,977,024	$ 16,767,984
% of Total	6.20%	4.00%
Hotel - extended stay
Loans and Financing Receivable
Principal Balance	$ 0	$ 4,250,000
Carrying Value	$ 0	$ 4,294,053
% of Total	0.00%	1.00%

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Loans Held for Investment - Geographic Locations (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Loans and Financing Receivable
Principal Balance	$ 480,151,151	$ 424,174,758
Carrying Value	483,331,795	426,019,273
Allowance for Loan and Lease Losses, Real Estate	(13,658,481)	(3,738,758)
Carrying Value	$ 469,673,314	$ 422,280,515
% of Total	100.00%	100.00%
Percent Of Allowance Of Loan Losses	(2.90%)	(0.90%)
California
Loans and Financing Receivable
Principal Balance	$ 234,968,151	$ 200,279,688
Carrying Value	$ 237,015,597	$ 200,990,328
% of Total	50.40%	47.60%
New York
Loans and Financing Receivable
Principal Balance	$ 92,252,340	$ 79,187,004
Carrying Value	$ 92,400,572	$ 79,310,276
% of Total	19.70%	18.80%
Georgia
Loans and Financing Receivable
Principal Balance	$ 53,289,288	$ 74,116,787
Carrying Value	$ 53,536,884	$ 74,505,752
% of Total	11.40%	17.60%
North Carolina
Loans and Financing Receivable
Principal Balance	$ 44,492,971	$ 33,242,567
Carrying Value	$ 44,704,699	$ 33,438,806
% of Total	9.50%	7.90%
Utah
Loans and Financing Receivable
Principal Balance	$ 28,000,000	$ 0
Carrying Value	$ 28,420,056	$ 0
% of Total	6.10%	0.00%
Texas
Loans and Financing Receivable
Principal Balance	$ 13,625,000	$ 3,848,712
Carrying Value	$ 13,725,690	$ 3,887,200
% of Total	2.90%	0.90%
Massachusetts
Loans and Financing Receivable
Principal Balance	$ 7,000,000	$ 7,000,000
Carrying Value	$ 7,000,000	$ 7,000,000
% of Total	1.50%	1.70%
Washington
Loans and Financing Receivable
Principal Balance	$ 3,523,401	$ 23,500,000
Carrying Value	$ 3,382,683	$ 23,682,536
% of Total	0.70%	5.60%
South Carolina
Loans and Financing Receivable
Principal Balance	$ 3,000,000	$ 3,000,000
Carrying Value	$ 3,145,614	$ 3,204,375
% of Total	0.70%	0.80%

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Loans Held for Investment - Loan risk rating (Details)	Dec. 31, 2021 USD ($) Loans	Dec. 31, 2020 USD ($) Loans
Loans and Financing Receivable
Number Of Loans | Loans	21	20
Principal Balance	$ 480,151,151	$ 424,174,758
Carrying Value	483,331,795	426,019,273
Allowance for Loan and Lease Losses, Real Estate	(13,658,481)	(3,738,758)
Carrying Value	$ 469,673,314	$ 422,280,515
% of Total	100.00%	100.00%
1
Loans and Financing Receivable
Number Of Loans | Loans	0	0
Principal Balance	$ 0	$ 0
Carrying Value	$ 0	$ 0
% of Total	0.00%	0.00%
2
Loans and Financing Receivable
Number Of Loans | Loans	2	1
Principal Balance	$ 25,000,000	$ 7,000,000
Carrying Value	$ 25,041,124	$ 7,000,000
% of Total	5.20%	1.60%
3
Loans and Financing Receivable
Number Of Loans | Loans	15	14
Principal Balance	$ 349,273,811	$ 323,696,475
Carrying Value	$ 352,164,409	$ 325,284,285
% of Total	72.90%	76.40%
4
Loans and Financing Receivable
Number Of Loans | Loans	1	3
Principal Balance	$ 60,012,639	$ 72,861,587
Carrying Value	$ 60,012,639	$ 73,079,804
% of Total	12.40%	17.20%
5
Loans and Financing Receivable
Number Of Loans | Loans	0	1
Principal Balance	$ 0	$ 3,848,712
Carrying Value	$ 0	$ 3,887,200
% of Total	0.00%	0.90%
Other
Loans and Financing Receivable
Number Of Loans | Loans	3	1
Principal Balance	$ 45,864,701	$ 16,767,984
Carrying Value	46,113,623	16,767,984
Allowance for Loan and Lease Losses, Real Estate	$ (12,800,000)	$ (2,500,000)
% of Total	9.50%	3.90%

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Loans Held for Investment - Loan risk rating - subnote (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Loans and Financing Receivable
Allowance for loan losses	$ 13,658,481	$ 3,738,758
Other
Loans and Financing Receivable
Allowance for loan losses	$ 12,800,000	$ 2,500,000

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Loans Held for Investment - Allowance for loan losses (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Receivables [Abstract]
Allowance for loan losses, beginning of period	$ 3,738,758	$ 0
Provision for loan losses	10,904,163	3,738,758
Charge-offs	(984,440)	0
Recoveries	0	0
Allowance for loan losses, end of period	$ 13,658,481	$ 3,738,758

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Loans Held for Investment - Narratives - Allowance for loan losses (Details)	12 Months Ended
	Dec. 31, 2021 USD ($) Loans numberOfAgreements	Dec. 31, 2020 USD ($) Loans
Loans and Financing Receivable
Provision for loan losses | $	$ 10,904,163	$ 3,738,758
Provision for loan losses | $	$ 10,904,163	$ 3,738,758
Financing Receivable, Troubled Debt Restructuring, Subsequent Default, Number of Contracts | Loans	1	1
Number Of Loans | Loans	21	20
Number of contract suspended | numberOfAgreements	3
Interest non-accrual | $	$ 3,600,000	$ 0
5
Loans and Financing Receivable
Number Of Loans | Loans	0	1
4
Loans and Financing Receivable
Number Of Loans | Loans	1	3
Specific Allowance
Loans and Financing Receivable
Provision for loan losses | $	$ 10,300,000	$ 2,500,000
Number Of Loans | Loans	3	1
General Allowance
Loans and Financing Receivable
Provision for loan losses | $	$ 600,000	$ 1,300,000

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Loans Held for Investment - Troubled Debt Restructuring (Details) - Principal Forgiveness	12 Months Ended
	Dec. 31, 2021 USD ($) Loans
Troubled Debt Restructuring
Number of loans modified | Loans	1
Pre-modified recorded carrying value	$ 18,503,470
Post-modified recorded carrying value	$ 13,625,000

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Loans Held for Investment - Troubled Debt Restructuring - subnote (Details) - USD ($)	Dec. 31, 2021	Sep. 23, 2021	Dec. 31, 2020	May 30, 2020
Troubled Debt Restructuring
Principal Balance	$ 480,151,151		$ 424,174,758
Principal Forgiveness
Troubled Debt Restructuring
Principal Balance	13,600,000	$ 13,600,000		$ 3,500,000
Carrying Value	13,700,000		$ 0
Loans and Leases Receivable, Allowance	$ 0

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Loans Held for Investment - Narratives - TDR (Details) - USD ($)	1 Months Ended	12 Months Ended
	Sep. 23, 2021	Dec. 31, 2021	Dec. 31, 2020	May 30, 2020
Troubled Debt Restructuring
Principal Balance		$ 480,151,151	$ 424,174,758
Charge-offs		984,440	0
Principal Forgiveness
Troubled Debt Restructuring
Financing Receivable		13,700,000	$ 0
Principal Balance	$ 13,600,000	13,600,000		$ 3,500,000
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down	1,300,000
Charge-offs	1,000,000
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans	400,000
Loans and Leases Receivable, Impaired, Troubled Debt, Interest Income		$ 300,000
Loans and Leases Receivable, Impaired, Description		Once classified as a TDR, the new senior loan is classified as an impaired loan until it is extinguished and the carrying value is evaluated at each reporting date for collectability based on the fair value of the underlying collateral. Since the fair value of the collateral is greater than the carrying value of the new senior loan, no specific allowance was recorded as of December 31, 2021.
Financing Receivable, Troubled Debt Restructuring, Commitment to Lend	$ 14,700,000

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Equity Investment in Unconsolidated Investments - Summarized financial information of the Companys equity investment (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Schedule of Equity Method Investments
Other assets	$ 3,505,953	$ 3,934,468
Total assets	693,542,158	588,477,181
Revolving line of credit, net of financing costs	38,186,472	0
Obligations under participation agreement (proceeds of $14,252,357 and $6,295,100, respectively)	42,232,027	71,581,897
Other liabilities	4,289,967	429,123
Total liabilities	419,698,580	285,152,116
Mavik RESOF
Schedule of Equity Method Investments
Investments at fair value (cost of $107,261,022 and $44,174,031, respectively)	108,359,898	44,715,979
Other assets	5,484,087	5,331,840
Total assets	113,843,985	50,047,819
Revolving line of credit, net of financing costs	14,909,717	0
Obligations under participation agreement (proceeds of $14,252,357 and $6,295,100, respectively)	14,351,617	6,347,478
Other liabilities	5,296,603	4,204,147
Total liabilities	34,557,937	10,551,625
Partners' Capital	79,286,048	39,496,194
Total investment income	11,769,083	239,837
Total expenses	2,381,145	614,362
Net investment income (loss)	9,387,938	(374,525)
Unrealized appreciation on investments	524,113	417,300
Net increase in partners' capital resulting from operations	$ 9,912,051	$ 42,775

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Equity Investment in Unconsolidated Investments - Summarized financial information of the Company equity investment - additional information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Schedule of Equity Method Investments
Carrying Value	$ 469,673,314	$ 422,280,515
Proceeds from obligations under participation agreements	71,682,634	22,498,765
Mavik RESOF
Schedule of Equity Method Investments
Carrying Value	107,261,022	44,174,031
Proceeds from obligations under participation agreements	$ 14,252,357	$ 6,295,100

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Equity Investment in Unconsolidated Investments - Narratives (Details) - USD ($)		12 Months Ended
	Aug. 03, 2020	Dec. 31, 2021	Dec. 31, 2020
Schedule of Equity Method Investments
Unfunded Commitment Outstanding		$ 71,800,000	$ 67,900,000
Equity investment in unconsolidated investments		69,713,793	36,259,959
Income from equity investment in excess of distributions received		5,925,802	38,640
Mavik RESOF
Schedule of Equity Method Investments
Committed Capital	$ 50,000,000
Unfunded Commitment Outstanding		15,100,000	14,100,000
Equity investment in unconsolidated investments		40,500,000	36,300,000
Income from equity investment in excess of distributions received		6,200,000	40,000.00
Proceeds from Equity Method Investment, Distribution		3,500,000	0
Payments for Origination of Mortgage Loans Held-for-sale		$ 300,000	$ 500,000
Equity Method Investment, Ownership Percentage		50.00%	90.30%
Joint Venture
Schedule of Equity Method Investments
Equity investment in unconsolidated investments		$ 29,255,511	$ 0
Income from equity investment in excess of distributions received		(200,000)	0
Proceeds from Equity Method Investment, Distribution		$ 0	$ 0

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Equity Investment in Unconsolidated Investments - Equity Investment in Joint Venture (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Schedule of Equity Method Investments
Equity investment in unconsolidated investments	$ 69,713,793	$ 36,259,959
Joint Venture
Schedule of Equity Method Investments
Equity investment in unconsolidated investments	$ 29,255,511	0
Joint Venture | LEL Arlington JV LLC
Schedule of Equity Method Investments
Equity Method Investment, Description of Principal Activities	Third party
Equity Method Investment, Ownership Percentage	80.00%
Equity investment in unconsolidated investments	$ 23,949,044	0
Joint Venture | LEL NW 49th JV LLC
Schedule of Equity Method Investments
Equity Method Investment, Description of Principal Activities	Third party
Equity Method Investment, Ownership Percentage	80.00%
Equity investment in unconsolidated investments	$ 5,306,467	$ 0

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Equity Investment in Unconsolidated Investments - Summarized financial information of JV (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Schedule of Equity Method Investments
Other assets	$ 3,505,953	$ 3,934,468
Total assets	693,542,158	588,477,181
Mortgage loan Payable	32,134,295	44,117,293
Other liabilities	4,289,967	429,123
Total liabilities	419,698,580	285,152,116
Revenues	46,685,257	50,320,888
Expenses	38,914,403	26,667,214
Net loss	7,770,854	23,653,674
Joint Venture
Schedule of Equity Method Investments
Net investment in real estate	115,636,424	0
Other assets	4,856,249	0
Total assets	120,492,673	0
Mortgage loan Payable	83,445,235	0
Other liabilities	1,305,572	0
Total liabilities	84,750,807	0
Members' Capital	35,741,866	0
Revenues	1,448,431	0
Expenses	1,752,076	0
Net loss	$ (303,645)	$ 0

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Real Estate Owned, Net - Lease Activities (Details)		12 Months Ended
	Sep. 04, 2020 USD ($)	Dec. 31, 2021 USD ($) a	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Mar. 02, 2020 USD ($)
Real Estate
Termination fees		$ 3,100,000
Cash					$ 25,500,000
Total assets		693,542,158	$ 588,477,181
Below Market Lease, Net		9,709,710	10,249,776
Gain (Loss) on Termination of Lease		$ 0	236,000
Lessee, Operating Lease, Term of Contract		10 years
Lessee, Operating Lease, Option to Extend		option to extend the lease for 5 years
Gross sales of tenant business		6.00%
Annual rental payment increase percent		3.00%
Impairment charge		$ 3,395,430	$ 0	$ 1,500,000
Area of Land | a		4.9
Contract Termination
Real Estate
Cash	$ 200,000	$ 142,620
Furniture and Fixtures	200,000	236,000
Total assets	400,000	378,620
In-place lease intangible assets	$ 900,000	869,694
Property, Plant and Equipment, Remaining Useful Life	2 years 6 months
Below Market Lease, Net	$ 600,000	616,392
Rent receivable	100,000	$ 125,318
Gain (Loss) on Termination of Lease	$ 0

XML

Real Estate Owned, Net - Real Estate Owned Net (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Real Estate
Net	$ 58,325,068	$ 63,385,339
Assets, Net	(2,257,939)
Real Estate Investment
Real Estate
Cost	67,304,497	70,953,229
Accumulated Depreciation	(11,237,368)	(8,024,066)
Net	56,067,129	62,929,163
Assets, Gross	15,139,080	16,008,774
Assets, Accumulated Amortization	(7,687,309)	(6,215,174)
Assets, Net	7,451,771	9,793,600
Liabilities Gross	(11,651,192)	(12,267,584)
Liabilities Accumulated Amortization	1,941,482	2,017,808
Liability Net	(9,709,710)	(10,249,776)
Real Estate Investment | Real Estate
Real Estate
Cost	63,816,609	67,212,039
Accumulated Depreciation	(5,491,541)	(3,826,700)
Net	58,325,068	63,385,339
Real Estate Investment | Land
Real Estate
Cost	10,000,000	13,395,430
Accumulated Depreciation	0	0
Net	10,000,000	13,395,430
Real Estate Investment | Building and Building Improvements
Real Estate
Cost	51,725,969	51,725,969
Accumulated Depreciation	(4,418,305)	(3,125,143)
Net	47,307,664	48,600,826
Real Estate Investment | Tenant Improvement
Real Estate
Cost	1,854,640	1,854,640
Accumulated Depreciation	(947,369)	(670,090)
Net	907,271	1,184,550
Real Estate Investment | Furniture and fixtures
Real Estate
Cost	236,000	236,000
Accumulated Depreciation	(125,867)	(31,467)
Net	110,133	204,533
Real Estate Investment | In-place lease
Real Estate
Assets, Gross	14,982,538	15,852,232
Assets, Accumulated Amortization	(7,627,326)	(6,172,747)
Assets, Net	7,355,212	9,679,485
Real Estate Investment | Above Market Leases
Real Estate
Assets, Gross	156,542	156,542
Assets, Accumulated Amortization	(59,983)	(42,427)
Assets, Net	96,559	114,115
Real Estate Investment | Below Market Rent
Real Estate
Liabilities Gross	(2,754,922)	(3,371,314)
Liabilities Accumulated Amortization	1,496,125	1,702,800
Liability Net	(1,258,797)	(1,668,514)
Real Estate Investment | Above Market Ground Lease
Real Estate
Liabilities Gross	(8,896,270)	(8,896,270)
Liabilities Accumulated Amortization	445,357	315,008
Liability Net	$ (8,450,913)	$ (8,581,262)

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Real Estate Owned, Net - Components of real estate operating revenues and expenses (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Real Estate
Real estate operating revenue	$ 8,894,991	$ 10,423,563
Total	46,685,257	50,320,888
Real estate operating expenses
Asset management fee	5,134,149	4,480,706
Real Estate Operating Expenses	5,003,893	4,505,119
Real Estate Investment
Real Estate
Lease revenue	7,167,049	8,150,041
Other operating income	1,727,942	2,273,522
Real estate operating revenue	8,894,991	10,423,563
Real estate operating expenses
Utilities	208,098	166,003
Real estate taxes	1,401,279	1,925,999
Repairs and maintenances	645,316	659,934
Asset management fee	271,303	224,732
Lease expense, including amortization of above-market ground lease (1)	2,084,402	1,134,152
Other operating expenses	393,495	394,299
Real Estate Operating Expenses	$ 5,003,893	$ 4,505,119

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Real Estate Owned, Net - Maturities of operating lease liabilities - subnote (Details) - USD ($)			12 Months Ended
	Jun. 02, 2021	Jun. 01, 2021	Dec. 31, 2021	Dec. 31, 2020
Real Estate
Amortization of above- and below-market rent intangibles			$ (392,161)	$ (1,027,129)
Operating Leases, Rent Expense, Minimum Rentals	$ 2,100,000	$ 1,300,000
Real Estate Operating Expenses			5,003,893	$ 4,505,119
Retroactive
Real Estate
Operating Leases, Rent Expense			1,700,000
Real Estate Operating Expenses			$ 4,700,000

XML

Real Estate Owned, Net - Narratives - Leases (Details) - lease	12 Months Ended
	Dec. 31, 2021	Jul. 30, 2018
Real Estate
Number Of Lease Remaining		4
Ground Lease
Real Estate
Weighted average remaining lease term — operating lease (years)	68 years 3 months 18 days
Base Rent Renewal Term	5 years
Percent of Fair Market Value of Land	9.00%
Multi Tenant Office Building | Minimum
Real Estate
Weighted average remaining lease term — operating lease (years)		6 years 3 months 18 days
Multi Tenant Office Building | Maximum
Real Estate
Weighted average remaining lease term — operating lease (years)		8 years 9 months 18 days

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Real Estate Owned, Net - Future Minimum Rent Income (Details)	Dec. 31, 2021 USD ($)
Real Estate [Abstract]
2022	$ 7,214,814
2023	4,235,538
2024	4,380,043
2025	792,925
2026	816,724
Thereafter	2,414,440
Total	$ 19,854,484

XML

Real Estate Owned, Net - Annual Net Amortization of Intangibles (Details)	Dec. 31, 2021 USD ($)
Real Estate
2022	$ 3,900,013
2023	824,474
2024	824,474
2025	(25,671)
2026	(25,671)
Thereafter	(7,755,558)
Total	(2,257,939)
Net Decrease in Real Estate Operating Revenue
Real Estate
2022	(926,553)
2023	(139,056)
2024	(139,056)
2025	17,556
2026	17,556
Thereafter	7,315
Total	(1,162,238)
Increase in Depreciation and Amortization
Real Estate
2022	4,956,914
2023	1,093,878
2024	1,093,878
2025	87,121
2026	87,121
Thereafter	36,300
Total	7,355,212
Decrease in Rent Expense
Real Estate
2022	(130,348)
2023	(130,348)
2024	(130,348)
2025	(130,348)
2026	(130,348)
Thereafter	(7,799,173)
Total	$ (8,450,913)

XML

Real Estate Owned, Net - Supplemental ground lease balance sheet information (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Real Estate
Operating lease right-of-use asset	$ 27,394,936	$ 16,105,888
Operating lease liability	27,394,936	16,105,888
Ground Lease
Real Estate
Operating lease right-of-use asset	27,394,936	16,105,888
Operating lease liability	$ 27,394,936	$ 16,105,888
Weighted average remaining lease term — operating lease (years)	64 years 9 months 18 days	65 years 9 months 18 days
Weighted average discount rate — operating lease	7.60%	7.90%

XML

Real Estate Owned, Net - Component of lease expense (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Ground Lease
Real Estate
Operating lease cost (1)	$ 2,214,750	$ 1,264,500

XML

Real Estate Owned, Net - Cash information related to the ground lease (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Real Estate [Abstract]
Operating cash flows from an operating lease	$ 2,214,750	$ 1,264,500
Right-of-use assets obtained in exchange for lease obligations, Operating leases	$ 2,214,750	$ 1,264,500

XML

Real Estate Owned, Net - Maturities of operating lease liabilities (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Real Estate [Abstract]
2022	$ 2,079,000
2023	2,079,000
2024	2,079,000
2025	2,079,000
2026	2,079,000
Thereafter	124,306,875
Total lease payment	134,701,875
Less: Imputed interest	(107,306,939)
Operating lease liability	$ 27,394,936	$ 16,105,888

XML

Fair Value Measurements - Fair value measurements of marketable securities (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	$ 1,310,000	$ 1,287,500	$ 0
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	1,310,000	1,287,500
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	0	0
Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	1,310,000	1,287,500
Equity securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	1,310,000	1,287,500
Equity securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	0	0
Equity securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	$ 0	$ 0

XML

Fair Value Measurements - Activities of the marketable securities (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Fair value measurement [Abstract]
Beginning balance	$ 1,287,500	$ 0
Purchases	6,479,148	6,039,567
Proceeds from sale	(6,608,396)	(6,023,723)
Reclassification of net realized gains on marketable securities into earnings	129,248	1,160,162
Unrealized gains on marketable securities	22,500	111,494
Ending balance	$ 1,310,000	$ 1,287,500

XML

Fair value measurement - Not carried at Fair Value (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Loans:
Principal Balance	$ 480,151,151	$ 424,174,758
Carrying Value	483,331,795	426,019,273
Carrying Value	469,673,314	422,280,515
Fair Value	467,201,619	419,407,194
Liabilities:
Principal Balance	370,566,055	241,152,827
Carrying value	364,910,392	239,132,654
Fair Value	370,793,089	239,327,483
Revolving line of credit
Loans:
Principal Balance	60,126,330
Carrying Value	60,318,820
Fair Value	60,690,198
Liabilities:
Principal Balance	38,575,895
Loans held for investment, net
Loans:
Carrying Value	457,329,582	417,986,462
Loans Held For Investment Acquired Through Participation
Loans:
Principal Balance	12,307,366
Carrying Value	12,343,732	4,294,053
Unsecured note payable
Liabilities:
Principal Balance	85,125,000
Carrying value	81,856,799
Fair Value	85,210,125
Level 3
Loans:
Allowance for loan losses	(13,658,481)	(3,738,758)
Fair Value	467,201,619	419,407,194
Liabilities:
Fair Value	285,582,964	239,327,483
Level 3 | Revolving line of credit
Liabilities:
Principal Balance	38,575,895	0
Carrying value	38,186,472	0
Fair Value	38,575,895	0
Level 3 | Loans held for investment, net
Loans:
Principal Balance	467,843,785	419,924,758
Carrying Value	470,988,063	421,725,220
Fair Value	454,840,551	415,113,225
Level 3 | Loans Held For Investment Acquired Through Participation
Loans:
Principal Balance	12,307,366	4,250,000
Carrying Value	12,343,732	4,294,053
Fair Value	12,361,068	4,293,969
Level 3 | Term loans payable
Liabilities:
Principal Balance	93,763,470	107,584,451
Carrying value	91,940,062	105,245,801
Fair Value	94,344,595	107,248,555
Level 3 | Repurchase agreement payables
Liabilities:
Principal Balance	44,569,600	0
Carrying value	43,974,608	0
Fair Value	44,569,600	0
Level 3 | Obligations Under Participation Agreements
Liabilities:
Principal Balance	42,048,294	71,266,303
Carrying value	42,232,027	71,581,897
Fair Value	41,475,060	70,693,207
Level 3 | Mortgage loan payable
Liabilities:
Principal Balance	31,962,692	44,020,225
Carrying value	32,134,295	44,117,293
Fair Value	32,192,785	44,348,689
Level 3 | Secured borrowing
Liabilities:
Principal Balance	34,521,104	18,281,848
Carrying value	34,586,129	18,187,663
Fair Value	34,425,029	17,037,032
Level 1 | Unsecured note payable
Liabilities:
Principal Balance	85,125,000	0
Carrying value	81,856,799	0
Fair Value	$ 85,210,125	$ 0

XML

Fair Value Measurements - Valuation techniques (Details)		Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Fair Value Measurement Inputs and Valuation Techniques
Assets, Fair Value		$ 467,201,619	$ 419,407,194
Liabilities, Fair Value		370,793,089	239,327,483
Principal amount	[1]	480,151,151
Revolving line of credit
Fair Value Measurement Inputs and Valuation Techniques
Assets, Fair Value		60,690,198
Level 3
Fair Value Measurement Inputs and Valuation Techniques
Assets, Fair Value		467,201,619	419,407,194
Liabilities, Fair Value		285,582,964	239,327,483
Level 3 | Revolving line of credit
Fair Value Measurement Inputs and Valuation Techniques
Liabilities, Fair Value		38,575,895	0
Level 3 | Loans held for investment, net
Fair Value Measurement Inputs and Valuation Techniques
Assets, Fair Value		454,840,551	415,113,225
Level 3 | Loans Held For Investment Acquired Through Participation
Fair Value Measurement Inputs and Valuation Techniques
Assets, Fair Value		12,361,068	4,293,969
Level 3 | Term loans payable
Fair Value Measurement Inputs and Valuation Techniques
Liabilities, Fair Value		94,344,595	107,248,555
Level 3 | Repurchase agreement payables
Fair Value Measurement Inputs and Valuation Techniques
Liabilities, Fair Value		44,569,600	0
Level 3 | Obligations Under Participation Agreements
Fair Value Measurement Inputs and Valuation Techniques
Liabilities, Fair Value		41,475,060	70,693,207
Level 3 | Mortgage loan payable
Fair Value Measurement Inputs and Valuation Techniques
Liabilities, Fair Value		32,192,785	44,348,689
Level 3 | Secured borrowing
Fair Value Measurement Inputs and Valuation Techniques
Liabilities, Fair Value		$ 34,425,029	$ 17,037,032
Level 3 | Discounted Cash Flow | Discount Rate | Minimum | Revolving line of credit
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0400
Level 3 | Discounted Cash Flow | Discount Rate | Maximum | Revolving line of credit
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0400
Level 3 | Discounted Cash Flow | Discount Rate | Weighted average | Revolving line of credit
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0400
Level 3 | Discounted Cash Flow | Discount Rate | Loans held for investment, net | Minimum
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0389	0.0529
Level 3 | Discounted Cash Flow | Discount Rate | Loans held for investment, net | Maximum
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.1500	0.2005
Level 3 | Discounted Cash Flow | Discount Rate | Loans held for investment, net | Weighted average
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0811	0.1038
Level 3 | Discounted Cash Flow | Discount Rate | Loans Held For Investment Acquired Through Participation | Minimum
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0825	0.1289
Level 3 | Discounted Cash Flow | Discount Rate | Loans Held For Investment Acquired Through Participation | Maximum
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.1500	0.1289
Level 3 | Discounted Cash Flow | Discount Rate | Loans Held For Investment Acquired Through Participation | Weighted average
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.1233	0.1289
Level 3 | Discounted Cash Flow | Discount Rate | Term loans payable | Minimum
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0400	0.0525
Level 3 | Discounted Cash Flow | Discount Rate | Term loans payable | Maximum
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0400	0.0525
Level 3 | Discounted Cash Flow | Discount Rate | Term loans payable | Weighted average
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0400	0.0525
Level 3 | Discounted Cash Flow | Discount Rate | Repurchase agreement payables | Minimum
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0245
Level 3 | Discounted Cash Flow | Discount Rate | Repurchase agreement payables | Maximum
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0274
Level 3 | Discounted Cash Flow | Discount Rate | Repurchase agreement payables | Weighted average
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0257
Level 3 | Discounted Cash Flow | Discount Rate | Obligations Under Participation Agreements | Minimum
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.1237	0.0975
Level 3 | Discounted Cash Flow | Discount Rate | Obligations Under Participation Agreements | Maximum
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.1500	0.2005
Level 3 | Discounted Cash Flow | Discount Rate | Obligations Under Participation Agreements | Weighted average
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.1431	0.1258
Level 3 | Discounted Cash Flow | Discount Rate | Mortgage loan payable | Minimum
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0608	0.0608
Level 3 | Discounted Cash Flow | Discount Rate | Mortgage loan payable | Maximum
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0608	0.0608
Level 3 | Discounted Cash Flow | Discount Rate | Mortgage loan payable | Weighted average
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0608	0.0608
Level 3 | Discounted Cash Flow | Discount Rate | Secured borrowing | Minimum
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0664	0.1125
Level 3 | Discounted Cash Flow | Discount Rate | Secured borrowing | Maximum
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0664	0.1125
Level 3 | Discounted Cash Flow | Discount Rate | Secured borrowing | Weighted average
Fair Value Measurement Inputs and Valuation Techniques
Measurement Input		0.0664	0.1125

[1] All of the Company’s loans have a prepayment penalty provision.

XML

Related Party Transactions - Summary of fees paid and costs reimbursed to the Manager (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Related Party Transaction
Origination And Extension Fee Expense	$ 2,729,598	$ 1,383,960
Asset management fee	5,134,149	4,480,706
Asset servicing fee	1,181,924	1,008,256
Operating expenses reimbursed to Manager	6,916,371	6,041,075
Disposition Fee	1,006,302	504,611
Total expenses	$ 16,968,344	$ 13,418,608

XML

Related Party Transactions - Summary of fees paid and costs reimbursed to the Manager -subnote (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Mavik RESOF
Related Party Transaction
Payments for Origination of Mortgage Loans Held-for-sale	$ 0.3	$ 0.5

XML

Related Party Transactions - Narratives (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Related Party Transaction
Termination fee	$ 0	$ 0
Distribution Paid
Dividends, Common Stock	17,110,136	21,218,767
Investment Company, Return of Capital Distribution	14,600,000	16,000,000
Due to Manager (Note 8)	2,388,317	1,257,098
Due from related party	$ 2,605,639	$ 0
Limited Partner
Related Party Transaction
Asset Servicing Fee Annual Rate	0.25%
Percent of Origination Fees Payable	1.00%
Percent of principal amount of loan extended	1.00%
Loans Disposition Fee Due to Manager Percent	1.00%
Disposition and Extension Fee Payment Term	The disposition fee is paid concurrently with the closing of any such disposition of all or any portion of any real estate-related loan or any interest therein, which is the lesser of (i) 1% of the principal amount of the loan or debt-related loan prior to such transaction or (ii) the amount of the fee paid by the borrower in connection with such transaction. If the Company takes ownership of a property as a result of a workout or foreclosure of a loan, the Company will pay a disposition fee upon the sale of such property equal to 1% of the sales price.
Property Management Fee, Percent Fee	1.00%

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Related Party Transactions - Participation Interests Purchased (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Related Party Transaction
Principal Balance	$ 480,151,151	$ 424,174,758
Carrying Value	469,673,314	422,280,515
Loans Held For Investment Acquired Through Participation
Related Party Transaction
Principal Balance	12,307,366
Carrying Value	$ 12,343,732	$ 4,294,053
Loans Held For Investment Acquired Through Participation | Hillsborough Owners LLC
Related Party Transaction
Participating Interests	30.00%
Principal Balance	$ 4,863,009
Carrying Value	$ 4,866,542
Loans Held For Investment Acquired Through Participation | UNIJ Sole Member LLC
Related Party Transaction
Participating Interests	40.80%
Principal Balance	$ 7,444,357
Carrying Value	$ 7,477,190
Loans Held For Investment Acquired Through Participation | LD Milpitas Mezz, LP
Related Party Transaction
Participating Interests		25.00%
Principal Balance		$ 4,250,000
Carrying Value		$ 4,294,053

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Related Party Transactions - Participation Interests Purchased - Subnote (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Jun. 27, 2018
Related Party Transaction
Principal Balance	$ 480,151,151	$ 424,174,758
Carrying Value	$ 469,673,314	$ 422,280,515
Terra Income Fund Six Inc
Related Party Transaction
Principal Balance			$ 4,300,000
Participating Interests			25.00%
Terra Income Fund Six Inc | Mezzanine Loans
Related Party Transaction
Principal Balance			$ 17,000,000

XML

Related Party Transactions - Transfers of Participation Interest (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Related Party Transaction
Principal Balance	$ 480,151,151	$ 424,174,758
Carrying Value	469,673,314	422,280,515
Principal Balance	370,566,055	241,152,827
Carrying Value	91,940,062	105,245,801
Secured borrowing
Related Party Transaction
Principal Balance	49,954,068	26,454,910
Carrying Value	50,264,568	26,407,494
Principal Balance	34,521,104	18,281,848
Carrying Value	34,586,129	18,187,663
Secured borrowing | Windy Hill PV Five CM, LLC
Related Party Transaction
Principal Balance	49,954,068	26,454,910
Carrying Value	$ 50,264,568	$ 26,407,494
% Transferred	69.11%	69.11%
Principal Balance	$ 34,521,104	$ 18,281,848
Carrying Value	34,586,129	18,187,663
Participating Mortgage Loan
Related Party Transaction
Principal Balance	100,619,048	167,891,127
Carrying Value	100,974,244	168,649,216
Principal Balance	42,048,294	71,266,303
Carrying Value	42,232,027	71,581,897
Participating Mortgage Loan | 14th & Alice Street Owner, LLC
Related Party Transaction
Principal Balance		32,625,912
Carrying Value		$ 32,877,544
% Transferred		80.00%
Principal Balance		$ 26,100,729
Carrying Value		26,211,548
Participating Mortgage Loan | 370 Lex Part Deux, LLC
Related Party Transaction
Principal Balance	60,012,639	53,874,507
Carrying Value	$ 60,012,639	$ 53,912,363
% Transferred	35.00%	35.00%
Principal Balance	$ 21,004,424	$ 18,856,078
Carrying Value	21,004,423	18,856,077
Participating Mortgage Loan | City Gardens 333 LLC
Related Party Transaction
Principal Balance		28,303,628
Carrying Value		$ 28,307,408
% Transferred		14.00%
Principal Balance		$ 3,962,509
Carrying Value		3,963,010
Participating Mortgage Loan | Orange Grove Property Investors, LLC
Related Party Transaction
Principal Balance		10,600,000
Carrying Value		$ 10,701,924
% Transferred		80.00%
Principal Balance		$ 8,480,000
Carrying Value		8,561,523
Participating Mortgage Loan | RS JZ Driggs, LLC
Related Party Transaction
Principal Balance	15,606,409	8,544,513
Carrying Value	$ 15,754,641	$ 8,629,929
% Transferred	50.00%	50.00%
Principal Balance	$ 7,806,370	$ 4,272,257
Carrying Value	7,880,516	4,314,965
Participating Mortgage Loan | Stonewall Station Mezz LLC
Related Party Transaction
Principal Balance		10,442,567
Carrying Value		$ 10,537,512
% Transferred		44.00%
Principal Balance		$ 4,594,730
Carrying Value		4,635,937
Participating Mortgage Loan | The Bristol at Southport, LLC
Related Party Transaction
Principal Balance		23,500,000
Carrying Value		$ 23,682,536
% Transferred		21.28%
Principal Balance		$ 5,000,000
Carrying Value		$ 5,038,837
Participating Mortgage Loan | William A. Shopoff , Cindy I. Shopoff
Related Party Transaction
Principal Balance	25,000,000
Carrying Value	$ 25,206,964
% Transferred	52.95%
Principal Balance	$ 13,237,500
Carrying Value	$ 13,347,088

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Related Party Transactions - Merger and Asset Contribution (Details) - shares		2 Months Ended
	Mar. 02, 2020	Mar. 01, 2020	Dec. 31, 2021
Terra Offshore Funds REIT
Related Party Transaction
Business Combination Common Stock Shares	2,457,684.59
Terra Fund 7
Related Party Transaction
Business Combination Common Stock Shares		2,116,785.76
Terra JV
Related Party Transaction
Equity Method Investment, Ownership Percentage			87.40%
Terra JV | Terra Fund 5
Related Party Transaction
Equity Method Investment, Ownership Percentage			87.60%
Terra JV | Terra Fund 7
Related Party Transaction
Equity Method Investment, Ownership Percentage			12.40%

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Related Party Transactions - Narratives - Mavik Real Estate Special Opportunities Fund, LP (Details) $ in Millions	Aug. 03, 2020 USD ($)
Mavik Real Estate Special Opportunities Fund, LP
Related Party Transaction
Committed Capital	$ 50.0

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Related Party Transactions - Narratives - Terra International 3 (Details) - Terra Offshore Funds REIT - USD ($) $ / shares in Units, $ in Millions		9 Months Ended
	Apr. 29, 2020	Sep. 30, 2019
Related Party Transaction
Proceeds from issuance of common stock		$ 3.6
Shares Issued		212,691
Sale of stock price per share		$ 17.02
Share Price	$ 17.02
Stock Repurchased During Period, Shares	212,691

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Debt - Unsecured Notes Payable (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument
Principal amount	$ 370,566,055	$ 241,152,827
Carrying value	364,910,392	239,132,654
Fair Value	370,793,089	$ 239,327,483
Unsecured note payable
Debt Instrument
Principal amount	85,125,000
Carrying value	81,856,799
Fair Value	$ 85,210,125

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Debt - Unsecured Notes Payable - subnote (Details) - Unsecured note payable $ in Millions	Dec. 31, 2021 USD ($)
Debt Instrument
Unamortized Discount	$ 2.4
Unamortized Debt Issuance Expense	$ 0.9

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Debt - Narratives - Unsecured Notes Payable (Details) - USD ($)			12 Months Ended
	Jun. 25, 2021	Jun. 10, 2021	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument
Principal amount			$ 370,566,055	$ 241,152,827
Unsecured note payable
Debt Instrument
Principal amount			$ 85,125,000
Unsecured note payable | 6% note payable due 2026
Debt Instrument
Principal amount	$ 6,600,000	$ 78,500,000
Fixed rate	6.00%	6.00%
Proceeds from Issuance of Debt	$ 6,400,000	$ 76,000,000
Debt Issuance Costs, Gross	$ 200,000	$ 2,500,000
Debt Instrument, Frequency of Periodic Payment			quarterly
asset coverage ratio			150.00%
Maturity Date			Jun. 30, 2026
Covenant Description			In connection with the issuance of the notes, the Company entered into (i) an Indenture, dated June 10, 2021 (the “Base Indenture”), by and between the Company and U.S. Bank National Association, as trustee (the “Trustee”), and (ii) the First Supplemental Indenture thereto, dated June 10, 2021 (the “Supplemental Indenture” and, collectively with the Base Indenture, the “Indenture”), by and between the Company and the Trustee. The Indenture contains certain covenants that, among other things, limit the ability of the Company, subject to exceptions, to make distributions in excess of 90% of the Company’s taxable income, incur indebtedness (as defined in the Indenture) or purchase shares of the Company’s capital stock unless the Company has an asset coverage ratio (as defined in the Indenture) of at least 150% after giving effect to such transaction. The Indenture also provides for customary events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the notes to become or to be declared due and payable.
Covenant Compliance			As of December 31, 2021, the Company was in compliance with the covenants included in the Indenture.

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Debt - Narratives - Revolving Line of Credit (Details) - USD ($)		12 Months Ended
	Jan. 04, 2022	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument
Payment of financing costs		$ 2,295,347	$ 2,361,369
Proceeds from borrowings under revolving line of credit		38,575,895	35,000,000
Repayments of Lines of Credit		0	35,000,000
Principal Balance		480,151,151	$ 424,174,758
Revolving line of credit
Debt Instrument
Maximum Borrowing Capacity		75,000,000
Payment of financing costs		$ 600,000
Maturity Date		Mar. 12, 2023
Ratio of Indebtedness to Net Capital		2.50
Minimum net worth required for compliance		$ 250,000,000
Quarterly Operating Profit for Compliance		$ 2,000,000
Payment guarantee maximum percent		25.00%
Covenant Description		In connection with the Revolving Line of Credit, the Company entered into a limited guaranty (the “Guaranty”) in favor of WAB, pursuant to which the Company will guarantee the payment of up to 25% of the amount outstanding under the Revolving Line of Credit. Under the Revolving Line of Credit and the Guaranty, the Company will be required to maintain (i) a minimum total net worth of $250.0 million; (ii) a $2.0 million quarterly operating profit, as defined within the agreement; and (iii) a ratio of total debt to total net worth of no more than 2.50 to 1.00.
Covenant Compliance		As of December 31, 2021, the Company is in compliance with these covenants.
Principal Balance		$ 60,126,330
Revolving line of credit | Subsequent Event
Debt Instrument
Maximum Borrowing Capacity	$ 125,000,000
Maturity Date	Mar. 12, 2024
Revolving line of credit | Floor rate
Debt Instrument
Debt Instrument, Basis Spread on Variable Rate		4.00%
Revolving line of credit | LIBOR
Debt Instrument
Debt Instrument, Basis Spread on Variable Rate		3.25%

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Debt - Each borrowing under the Revolving Line of Credit (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument
Principal Balance	$ 480,151,151	$ 424,174,758
Carrying Value	469,673,314	422,280,515
Fair Value	467,201,619	419,407,194
Principal amount	370,566,055	$ 241,152,827
Revolving line of credit
Debt Instrument
Principal Balance	60,126,330
Carrying Value	60,318,820
Fair Value	60,690,198
Principal amount	38,575,895
Revolving line of credit | 870 Santa Cruz LLC
Debt Instrument
Principal Balance	17,540,875
Carrying Value	17,669,303
Fair Value	17,781,285
Principal amount	12,278,613
Revolving line of credit | 606 fayetteville LLC and 401 E, Lakewood LLC
Debt Instrument
Principal Balance	16,829,962
Carrying Value	16,935,803
Fair Value	16,974,601
Principal amount	10,312,187
Revolving line of credit | Austin H. I. Borrower LLC
Debt Instrument
Principal Balance	13,625,000
Carrying Value	13,725,690
Fair Value	13,735,569
Principal amount	7,493,750
Revolving line of credit | D-G Acquisition #6, LLC and D-G Quimisa, LLC
Debt Instrument
Principal Balance	8,607,092
Carrying Value	8,605,341
Fair Value	8,645,413
Principal amount	6,024,965
Revolving line of credit | The Lux Washington, LLC
Debt Instrument
Principal Balance	3,523,401
Carrying Value	3,382,683
Fair Value	3,553,330
Principal amount	$ 2,466,380

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Debt - Narratives - Term Loan (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Sep. 03, 2020
Debt Instrument
Payment of financing costs	$ 2,295,347	$ 2,361,369
Proceeds from borrowings under the term loan	2,764,020	107,584,451
Repayment of borrowings under the term loan	16,585,001
Principal amount	$ 370,566,055	241,152,827
Term Loan
Debt Instrument
Debt instrument covenant requirement on consolidated tangible net worth minimum percent	75.00%
Proceeds from borrowings under the term loan	$ 2,800,000
Repayment of borrowings under the term loan	16,600,000
Principal amount	$ 93,763,470	$ 107,584,451
Maturity Date	Mar. 14, 2025
Description of Variable Rate Basis	LIBOR
Term Loan | Minimum
Debt Instrument
Debt Instrument Covenant Liquidity	$ 10,000,000
Term Loan | Maximum
Debt Instrument
EBITDA To interest expense ratio	1.5
Term Loan | LIBOR
Debt Instrument
Debt Instrument, Basis Spread on Variable Rate	4.25%	4.25%
Debt Instrument Additional Variable Rate in Year Two	0.50%
Debt Instrument Additional Variable Rate in Year Three	0.25%
Term Loan | LIBOR | Floor rate
Debt Instrument
Debt Instrument, Basis Spread on Variable Rate	1.00%	1.00%
Term Loan | Committed Advances
Debt Instrument
Amount Remaining Available	$ 400,000
Term Loan | Discretionary Advances
Debt Instrument
Amount Remaining Available	$ 6,600,000
Indenture and credit Agreement | Class B Loan
Debt Instrument
Principal amount			$ 76,700,000
Indenture and credit Agreement | Term Loan
Debt Instrument
Payment of financing costs		$ 2,400,000
additional future discretionary advances			11,600,000
Additional Future Advance		$ 1,300,000
Principal amount			103,000,000
Additional Future Advance			$ 3,600,000
Covenant Description	In connection with the Indenture and Credit Agreement, the Company entered into a non-recourse carveout Guaranty (the “Guaranty”) in favor of Goldman, pursuant to which the Company guarantees the payment of certain losses, damages, costs, expenses, and other obligations incurred by Goldman in connection with the occurrence of fraud, intentional misrepresentation, or willful misconduct by the Issuer, Class B Holder or the Company, and certain other occurrences including breaches of certain provisions under the Indenture and Credit Agreement. The Company also guarantees the payment of the aggregate outstanding amount of the Term Loan upon the occurrence of certain bankruptcy events. Under the Guaranty, the Company is required to maintain (a) a minimum tangible net worth in an amount not less than seventy-five percent (75%) of its tangible net worth as of September 3, 2020, (b) a minimum liquidity of $10 million, and (c) an EBITDA to interest expense ratio of not less than 1.5 to 1.0. Failure to satisfy such maintenance covenants would constitute an event of default under the Indenture and Credit Agreement.
Covenant Compliance		As of December 31, 2020, the Company was in compliance with these covenants.

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Debt - Details of each borrowing under the Term Loan (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument
Principal Balance	$ 480,151,151	$ 424,174,758
Carrying Value	469,673,314	422,280,515
Fair Value	467,201,619	419,407,194
Principal amount	370,566,055	241,152,827
Term Loan
Debt Instrument
Principal Balance	163,127,047	184,201,670
Carrying Value	164,142,316	185,084,361
Fair Value	162,526,736	184,957,221
Principal amount	93,763,470	107,584,451
Term Loan | 330 Tryon DE LLC
Debt Instrument
Principal Balance	22,800,000	22,800,000
Carrying Value	22,902,354	22,901,294
Fair Value	22,594,654	22,869,879
Principal amount	13,680,000	13,680,000
Term Loan | 1389 Peachtree St, L.P. and Others
Debt Instrument
Principal Balance	53,289,288	50,808,453
Carrying Value	53,536,884	51,068,554
Fair Value	52,031,363	50,982,247
Principal amount	31,283,661	29,897,848
Term Loan | AGRE DCP Palm Springs LLC
Debt Instrument
Principal Balance	43,222,381	45,294,097
Carrying Value	43,669,992	45,506,051
Fair Value	43,829,842	45,519,030
Principal amount	23,146,265	24,894,939
Term Loan | MSC Fields Peachtree Retreat LLC
Debt Instrument
Principal Balance		23,308,334
Carrying Value		23,437,198
Fair Value		23,428,860
Principal amount		13,985,001
Term Loan | Patrick Henry Recovery Acquisition LLC
Debt Instrument
Principal Balance	18,000,000	18,000,000
Carrying Value	18,041,124	18,039,456
Fair Value	18,055,377	17,994,495
Principal amount	10,800,000	10,800,000
Term Loan | University Park Berkeley, LLC
Debt Instrument
Principal Balance	25,815,378	23,990,786
Carrying Value	25,991,962	24,131,808
Fair Value	26,015,500	24,162,710
Principal amount	$ 14,853,544	$ 14,326,663

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Debt - Details of each borrowing under the Term Loan - Subnote (Details) - Term Loan	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument
Fixed rate	5.25%	5.25%
Maturity Date	Mar. 14, 2025
LIBOR
Debt Instrument
Debt Instrument, Basis Spread on Variable Rate	4.25%	4.25%
LIBOR | Floating rate
Debt Instrument
Debt Instrument, Basis Spread on Variable Rate	0.10%	0.14%
LIBOR | Floor rate
Debt Instrument
Debt Instrument, Basis Spread on Variable Rate	1.00%	1.00%

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Debt - Narratives - Repurchase agreement (Details) - USD ($)			12 Months Ended
	Sep. 03, 2020	Dec. 12, 2018	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument
Cash and cash equivalents			$ 35,783,956	$ 18,607,952
Proceeds from (Payments for) in Securities Sold under Agreements to Repurchase			44,569,600	22,860,134
Repayment of borrowings under repurchase agreement			0	103,994,570
Repayments of Debt			12,057,533	594,255
Uncommitted Master Repurchase Agreement
Debt Instrument
Other Deferred Costs, Gross			600,000
Cash liquidity			5,000,000
Minimum net worth required for compliance			$ 215,700,000
Debt instrument covenant requirement on consolidated tangible net worth minimum percent			75.00%
EBITDA To interest expense ratio			1.50
Cash and cash equivalents			$ 15,000,000
Ratio of Indebtedness to Net Capital			3.50
Proceeds from (Payments for) in Securities Sold under Agreements to Repurchase			$ 44,600,000	22,900,000
Repayment of borrowings under repurchase agreement			$ 0	$ 104,000,000
Covenant Description			the UBS Guarantee Agreement contains financial covenants, which require the Company to maintain: (i) cash liquidity of at least the greater of $5 million or 5% of the then-current outstanding amount under the Master Repurchase Agreement; (ii) total liquidity of at least the greater of $15 million or 10% of the then-current outstanding amount under the Master Repurchase Agreement (iii) tangible net worth at an amount equal to or greater than $215.7 million plus 75% of new capital contributions thereafter; (iv) an EBITDA to interest expense ratio of not less than 1.50 to 1.00; and (v) a total indebtedness to tangible net worth ratio of not more than 3.50 to 1.00. In March 2022, the Company amended the UBS Guarantee Agreement to reduce the EBITDA to interest expense ratio of not less than 1.25 to 1.00, and a
Covenant Compliance			s of December 31, 2021, the Company was in compliance with these covenants.
Uncommitted Master Repurchase Agreement | Minimum
Debt Instrument
Value-added assets with loan-to-value ratio			65.00%
Value added assets yield ratio			2.50%
Debt instrument covenant minimum percentage of cash liquidity			5.00%
Minimum percentage of total liquidity			10.00%
Repayment of borrowings under repurchase agreement	$ 3,400,000
Uncommitted Master Repurchase Agreement | Maximum
Debt Instrument
Value-added assets with loan-to-value ratio			80.00%
Value added assets yield ratio			5.00%
Uncommitted Master Repurchase Agreement | LIBOR | Minimum
Debt Instrument
Debt Instrument, Basis Spread on Variable Rate			1.60%
Uncommitted Master Repurchase Agreement | LIBOR | Maximum
Debt Instrument
Debt Instrument, Basis Spread on Variable Rate			1.85%
Uncommitted Master Repurchase Agreement | Terra Mortgage Capital LLC
Debt Instrument
Maturity Date		Dec. 12, 2020	Nov. 07, 2024
Uncommitted Master Repurchase Agreement | Terra Mortgage Capital LLC | Maximum
Debt Instrument
Maximum Borrowing Capacity		$ 150,000,000	$ 195,000,000

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Debt - Repurchase agreement (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument
Principal Balance	$ 480,151,151	$ 424,174,758
Principal amount	43,974,608	$ 0
Uncommitted Master Repurchase Agreement
Debt Instrument
Principal Balance	67,384,000
Carrying Amount	68,509,209
Fair Value	68,981,995
Principal amount	44,569,600
Uncommitted Master Repurchase Agreement | 14th & Alice Street Owner, LLC
Debt Instrument
Principal Balance	39,384,000
Carrying Amount	40,089,153
Fair Value	$ 40,130,448
Borrowing Date	Nov. 08, 2021
Principal amount	$ 25,599,600
Uncommitted Master Repurchase Agreement | 14th & Alice Street Owner, LLC | LIBOR
Debt Instrument
Interest Rate	1.45%
Uncommitted Master Repurchase Agreement | 14th & Alice Street Owner, LLC | LIBOR | Floor rate
Debt Instrument
Interest Rate	0.10%
Uncommitted Master Repurchase Agreement | NB Factory TIC 1, LLC
Debt Instrument
Principal Balance	$ 28,000,000
Carrying Amount	28,420,056
Fair Value	$ 28,851,547
Borrowing Date	Nov. 08, 2021
Principal amount	$ 18,970,000
Uncommitted Master Repurchase Agreement | NB Factory TIC 1, LLC | LIBOR
Debt Instrument
Interest Rate	1.74%
Uncommitted Master Repurchase Agreement | NB Factory TIC 1, LLC | LIBOR | Floor rate
Debt Instrument
Interest Rate	0.10%

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Debt - Narratives - Revolving credit facility (Details) - USD ($)		1 Months Ended	12 Months Ended
	Oct. 02, 2020	Jun. 20, 2019	Dec. 31, 2021	Dec. 31, 2020
Revolving Credit Facility
Proceeds from borrowings under revolving line of credit			$ 38,575,895	$ 35,000,000
Revolving Credit Facility
Revolving Credit Facility
Maximum Borrowing Capacity		$ 35,000,000
Line of Credit Facility, Remaining Borrowing Capacity	$ 15,000,000
Line of Credit Facility Outstanding				$ 0
Line of Credit Facility, Expiration Date	Sep. 02, 2021
Revolving Credit Facility | Floor rate
Revolving Credit Facility
Debt Instrument, Basis Spread on Variable Rate	4.50%	6.00%
Revolving Credit Facility | LIBOR
Revolving Credit Facility
Debt Instrument, Basis Spread on Variable Rate	4.00%	4.00%
Revolving Credit Facility | Prime Rate
Revolving Credit Facility
Debt Instrument, Basis Spread on Variable Rate	1.00%	1.00%

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Debt - Mortgage Loan Payable (Details) - USD ($)		12 Months Ended
		Dec. 31, 2021	Dec. 31, 2020
Debt Instrument
Principal amount	[1]	$ 480,151,151
Carrying value	[1]	469,673,314
Unarmortized Finance Cost		$ 5,904,421	$ 2,200,000
Centennial Bank
Debt Instrument
Maturity Date		Sep. 27, 2022
Principal amount		$ 31,962,692	44,020,225
Carrying value		32,134,295	44,117,293
Carrying Value of Collateral		$ 46,067,129	$ 49,533,733
Description of Variable Rate Basis		LIBOR
Centennial Bank | LIBOR
Debt Instrument
Debt Instrument, Basis Spread on Variable Rate		3.85%
Centennial Bank | Floor rate | LIBOR
Debt Instrument
Debt Instrument, Basis Spread on Variable Rate		2.23%

[1] All of the Company’s loans have a prepayment penalty provision.

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Debt - Scheduled Debt Principal Payments (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument
2022	$ 31,962,692
2023	38,575,895
2024	100,333,261
2025	37,999,809
2026	85,125,000
Thereafter	0
Long term debt	293,996,657
Unarmortized deferred financing costs	(5,904,421)	$ (2,200,000)
Long Term Debt Net	$ 288,092,236

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Debt - Narratives - Obligations Under Participation Agreements and Secured Borrowing (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument
Participation mortgage loan	$ 91,940,062	$ 105,245,801
Carrying Value	469,673,314	422,280,515
Unarmortized Finance Cost	5,904,421	2,200,000
Participating Mortgage Loan
Debt Instrument
Participation mortgage loan	42,232,027	71,581,897
Carrying Value	$ 100,974,244	$ 168,649,216
Participating Mortgage Loan | Weighted average
Debt Instrument
Participating Mortgage Loans, Mortgage Interest Rate	10.40%	10.20%
Secured borrowing
Debt Instrument
Participation mortgage loan	$ 34,586,129	$ 18,187,663
Carrying Value	$ 50,264,568	$ 26,407,494

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Commitments and Contingencies (Details) - USD ($) $ in Millions	Aug. 03, 2020	Dec. 31, 2021	Dec. 31, 2020
Other Commitments
Unfunded Commitment Outstanding		$ 71.8	$ 67.9
Mavik RESOF
Other Commitments
Unfunded Commitment Outstanding		$ 15.1	$ 14.1
Committed Capital	$ 50.0

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Equity - Earnings Per Share (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Equity [Abstract]
Net (loss) income	$ (12,355,727)	$ 5,255,730
Series A preferred stock dividend declared	(15,624)	(15,624)
Net (loss) income allocable to common stock	$ (12,371,351)	$ 5,240,106
Weighted-average shares — basic and diluted	19,487,460	18,813,066
(Loss) earnings per share — basic and diluted	$ (0.63)	$ 0.28

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Equity - Preferred Stock Classes (Details) - USD ($)		12 Months Ended
	Nov. 30, 2016	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2016
Class of Stock
Preferred Stock, Shares Authorized		50,000,000	50,000,000
Preferred stock dividend declared		$ 15,624	$ 15,624
Preferred Stock, Par or Stated Value Per Share		$ 0.01	$ 0.01
Preferred Stock, Shares Issued		0	0
Preferred Stock, Value, Issued		$ 0	$ 0
Preferred Stock, Value, Outstanding		$ 0	$ 0
Cumulative Preferred Stock
Class of Stock
Preferred Stock, Shares Authorized	125	125	125
Preferred Stock, Dividend Rate, Percentage	12.50%	12.50%	12.50%	12.50%
Preferred Stock Shares Sold				125
Preferred Stock Value Sold				$ 125,000
Preferred Stock, Liquidation Preference Per Share				$ 1,000
Preferred Stock, Shares Issued		125	125
Preferred Stock, Shares Outstanding		125	125
Preferred Stock, Dividend Payment Terms	These dividends are cumulative and payable semi-annually in arrears on June 30 and December 31 of each year
Preferred Stock, Redemption Price Per Share		$ 1,000
Preferred Stock Redemption Premium Per Share		$ 50

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Equity - Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions			2 Months Ended	9 Months Ended
	Apr. 29, 2020	Mar. 02, 2020	Mar. 01, 2020	Sep. 30, 2019	Dec. 31, 2021	Dec. 31, 2020
Equity disclosure
Common Stock, Shares, Issued		4,574,470.35			19,487,460	19,487,460
Terra Offshore Funds REIT
Equity disclosure
Business Combination Common Stock Shares		2,457,684.59
Common Stock, Shares, Issued				212,691
Proceeds from issuance of common stock				$ 3.6
Sale of stock price per share				$ 17.02
Stock Repurchased During Period, Shares	212,691
Share Price	$ 17.02
Terra Fund 7
Equity disclosure
Business Combination Common Stock Shares			2,116,785.76
Terra JV
Equity disclosure
Equity Method Investment, Ownership Percentage					87.40%
Terra Fund 5 | Terra JV
Equity disclosure
Equity Method Investment, Ownership Percentage					87.60%
Terra Fund 7 | Terra JV
Equity disclosure
Equity Method Investment, Ownership Percentage					12.40%

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Equity - Distributions (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Schedule of Equity Method Investments
Investment Company, Return of Capital Distribution	$ 14,600,000	$ 16,000,000
Dividends, Preferred Stock, Stock	15,624	15,624
Dividends, Common Stock	$ 17,110,136	$ 21,218,767

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Equity - Distributions Per Share (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Equity disclosure
Common Stock, Dividends, Per Share, Cash Paid	$ 0.88	$ 1.16
Ordinary income
Equity disclosure
Common Stock, Dividends, Per Share, Cash Paid	0.07	0.48
Capital gains
Equity disclosure
Common Stock, Dividends, Per Share, Cash Paid	0.06	0
Return of capital
Equity disclosure
Common Stock, Dividends, Per Share, Cash Paid	$ 0.75	$ 0.68

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Subsequent Events (Details) - USD ($)	2 Months Ended	12 Months Ended
	Feb. 18, 2022	Dec. 31, 2021	Dec. 31, 2020
Subsequent Event
Total liquidity		$ 35,783,956	$ 18,607,952
Uncommitted Master Repurchase Agreement
Subsequent Event
Cash liquidity		5,000,000
Total liquidity		$ 15,000,000
Debt instrument covenant requirement on consolidated tangible net worth minimum percent		75.00%
EBITDA To interest expense ratio		1.50
Ratio of Indebtedness to Net Capital		3.50
Covenant Description		the UBS Guarantee Agreement contains financial covenants, which require the Company to maintain: (i) cash liquidity of at least the greater of $5 million or 5% of the then-current outstanding amount under the Master Repurchase Agreement; (ii) total liquidity of at least the greater of $15 million or 10% of the then-current outstanding amount under the Master Repurchase Agreement (iii) tangible net worth at an amount equal to or greater than $215.7 million plus 75% of new capital contributions thereafter; (iv) an EBITDA to interest expense ratio of not less than 1.50 to 1.00; and (v) a total indebtedness to tangible net worth ratio of not more than 3.50 to 1.00. In March 2022, the Company amended the UBS Guarantee Agreement to reduce the EBITDA to interest expense ratio of not less than 1.25 to 1.00, and a
Minimum | Uncommitted Master Repurchase Agreement
Subsequent Event
Debt instrument covenant minimum percentage of cash liquidity		5.00%
Minimum percentage of total liquidity		10.00%
LIBOR | Minimum | Uncommitted Master Repurchase Agreement
Subsequent Event
Debt Instrument, Basis Spread on Variable Rate		1.60%
LIBOR | Maximum | Uncommitted Master Repurchase Agreement
Subsequent Event
Debt Instrument, Basis Spread on Variable Rate		1.85%
Subsequent Event | Uncommitted Master Repurchase Agreement
Subsequent Event
Maximum Borrowing Capacity	$ 200,000,000
Maturity Date	Feb. 18, 2024
Description of Variable Rate Basis	Advances under the Repurchase Agreement accrue interest at a per annum pricing rate equal to the sum of (i) Term SOFR (subject to underlying loan floors on a case-by-case basis) and (ii) the applicable spread, which ranges from 1.75% to 3.00%, and have a maturity date of February 18, 2024.
Subsequent Event | Guarantee Agreement
Subsequent Event
Cash liquidity	$ 5,000,000
Debt instrument covenant minimum percentage of cash liquidity	5.00%
Debt instrument covenant requirement on consolidated tangible net worth minimum percent	75.00%
EBITDA To interest expense ratio	1.50
Ratio of Indebtedness to Net Capital	3.00
Covenant Description	the Guarantee Agreement contains financial covenants, which require the Company to maintain: (i) cash liquidity of at least the greater of $5 million or 5% of the then-current outstanding amount under the Repurchase Agreement; (ii) total liquidity in an amount equal to or greater than the lesser of $15 million or 10% of the then-current outstanding amount under the Repurchase Agreement (iii) tangible net worth at an amount no less than 75% of that at closing; (iv) an EBITDA to adjusted interest expense ratio of not less than 1.50 to 1.00; and (v) a total indebtedness to tangible net worth ratio of not more than 3.00 to 1.00.
Subsequent Event | Guarantee Agreement | Performing Loans
Subsequent Event
Maximum repurchase liability, percent	50.00%
Subsequent Event | Guarantee Agreement | Nonperforming Loans
Subsequent Event
Maximum repurchase liability, percent	25.00%
Subsequent Event | Minimum | Uncommitted Master Repurchase Agreement
Subsequent Event
Debt Instrument, Basis Spread on Variable Rate	1.75%
Subsequent Event | Minimum | Guarantee Agreement
Subsequent Event
Cash liquidity	$ 15,000,000
Minimum percentage of total liquidity	10.00%
Subsequent Event | Maximum | Uncommitted Master Repurchase Agreement
Subsequent Event
Debt Instrument, Basis Spread on Variable Rate	3.00%

XML

SEC Schedule III Real Estate and Accumulated Depreciation (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Real Estate and Accumulated Depreciation
Encumbrances	$ 31,962,692
Initial Cost
Land	14,703,359
Building and Building Improvements	51,308,076
Cost Capitalized Subsequent to Acquisition	2,750,604
Decrease in net investment	(4,945,430)
Gross Amount at Period End
Land	10,000,000
Building and Building Improvements	53,816,609
Total	63,816,609	$ 67,212,039
Accumulated Depreciation	5,491,541	$ 3,826,700
CA | Office
Real Estate and Accumulated Depreciation
Encumbrances	31,962,692
Initial Cost
Land	0
Building and Building Improvements	51,308,076
Cost Capitalized Subsequent to Acquisition	2,508,533
Decrease in net investment	0
Gross Amount at Period End
Land	0
Building and Building Improvements	53,816,609
Total	53,816,609
Accumulated Depreciation	$ 5,491,541
Date of Construction	Jun. 30, 2002
Date Acquired	Jul. 30, 2018
Life Used for Depreciation	40 years
PA | Land
Real Estate and Accumulated Depreciation
Encumbrances	$ 0
Initial Cost
Land	14,703,359
Building and Building Improvements	0
Cost Capitalized Subsequent to Acquisition	242,071
Decrease in net investment	(4,945,430)
Gross Amount at Period End
Land	10,000,000
Building and Building Improvements	0
Total	10,000,000
Accumulated Depreciation	$ 0
Date Acquired	Jan. 09, 2019

XML

Schedule III Rollforward of Real Estate Assets and Accumulated Depreciation (Details)	12 Months Ended
	Dec. 31, 2021 USD ($)
Investment in Real Estate [Roll Forward]
Beginning Balance	$ 67,212,039
Acquisition Through Foreclosure	0
Improvements	0
Impairment Charge	(3,395,430)
Ending Balance	63,816,609
Accumulated Depreciation [Roll Forward]
Beginning Balance	3,826,700
Depreciation for the year	1,664,841
Ending Balance	$ 5,491,541

XML

Schedule III Real Estate and Accumulated Depreciation- Narratives (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract]
Impairment charge	$ 3,395,430	$ 0	$ 1,500,000
Aggregate cost of real estate for federal income tax purpose	$ 57,600,000

XML

SEC Schedule IV Mortgage Loans on Real Estate (Details) - USD ($)		12 Months Ended
		Dec. 31, 2021	Dec. 31, 2020
Investment in Mortgage Loans on Real Estate
Weighted-average coupon rate		7.85%	8.51%
Face Amount	[1]	$ 480,151,151
Carrying value	[1]	469,673,314
Allowance for Loan and Lease Losses, Real Estate		(13,658,481)	$ (3,738,758)
Preferred Equity Investment
Investment in Mortgage Loans on Real Estate
Face Amount	[1]	92,252,340
Carrying value	[1]	$ 92,400,572
Preferred Equity Investment | 370 Lex Part Deux, LLC | NY | Office
Investment in Mortgage Loans on Real Estate
Location of Property	[1],[2],[3]	UNITED STATES
Floor Interest Rate	[1],[2],[3]	2.44%
Maximum Maturity Date	[1],[2],[3],[4]	Jan. 09, 2025
Periodic Payment Terms	[1],[2],[3]	Interest Only
Prior Lien	[1],[2],[3]	$ 0
Face Amount	[1],[2],[3]	60,012,639
Carrying value	[1],[2],[3]	$ 60,012,639
Preferred Equity Investment | 370 Lex Part Deux, LLC | NY | Office | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1],[2],[3]	8.25%
Preferred Equity Investment | REEC Harlem Holdings Company LLC | NY | Mixed use
Investment in Mortgage Loans on Real Estate
Location of Property	[1],[5]	UNITED STATES
Maximum Maturity Date	[1],[4],[5]	Mar. 09, 2025
Periodic Payment Terms	[1],[5]	Interest Only
Prior Lien	[1],[5]	$ 0
Face Amount	[1],[5]	16,633,292
Carrying value	[1],[5]	$ 16,633,292
Preferred Equity Investment | REEC Harlem Holdings Company LLC | NY | Mixed use | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1],[5]	12.50%
Preferred Equity Investment | RS JZ Driggs, LLC | NY | Multifamily
Investment in Mortgage Loans on Real Estate
Location of Property	[1],[2],[3],[6]	UNITED STATES
Weighted-average coupon rate	[1],[2],[3],[6]	12.30%
Maximum Maturity Date	[1],[2],[3],[4],[6]	Aug. 01, 2021
Periodic Payment Terms	[1],[2],[3],[6]	Interest Only
Prior Lien	[1],[2],[3],[6]	$ 0
Face Amount	[1],[2],[3],[6]	15,606,409
Carrying value	[1],[2],[3],[6]	15,754,641
Credit Facility
Investment in Mortgage Loans on Real Estate
Face Amount	[1]	25,000,000
Carrying value	[1]	$ 25,206,964
Credit Facility | William A. Shopoff , Cindy I. Shopoff | CA | Industrial
Investment in Mortgage Loans on Real Estate
Location of Property	[1],[2],[3]	UNITED STATES
Weighted-average coupon rate	[1],[2],[3]	15.00%
Maximum Maturity Date	[1],[2],[3],[4]	Apr. 04, 2023
Periodic Payment Terms	[1],[2],[3]	Interest Only
Face Amount	[1],[2],[3]	$ 25,000,000
Carrying value	[1],[2],[3]	25,206,964
First Mortgage
Investment in Mortgage Loans on Real Estate
Face Amount	[1]	345,454,454
Carrying value	[1]	$ 348,101,455
First Mortgage | 14th & Alice Street Owner, LLC | CA | Multifamily
Investment in Mortgage Loans on Real Estate
Location of Property	[1]	UNITED STATES
Floor Interest Rate	[1]	0.25%
Maximum Maturity Date	[1],[4]	Apr. 15, 2024
Periodic Payment Terms	[1]	Interest Only
Prior Lien	[1]	$ 0
Face Amount	[1]	39,384,000
Carrying value	[1]	$ 40,089,153
First Mortgage | 14th & Alice Street Owner, LLC | CA | Multifamily | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1]	4.00%
First Mortgage | 1389 Peachtree St, L.P. and Others | GA | Office
Investment in Mortgage Loans on Real Estate
Location of Property	[1]	UNITED STATES
Maximum Maturity Date	[1],[4]	Aug. 10, 2024
Periodic Payment Terms	[1]	Interest Only
Prior Lien	[1]	$ 0
Face Amount	[1]	53,289,288
Carrying value	[1]	$ 53,536,884
First Mortgage | 1389 Peachtree St, L.P. and Others | GA | Office | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1]	4.50%
First Mortgage | 330 Tryon DE LLC | NC | Office
Investment in Mortgage Loans on Real Estate
Location of Property	[1]	UNITED STATES
Floor Interest Rate	[1]	0.10%
Maximum Maturity Date	[1],[4]	Mar. 01, 2024
Periodic Payment Terms	[1]	Interest Only
Prior Lien	[1]	$ 0
Face Amount	[1]	22,800,000
Carrying value	[1]	$ 22,902,354
First Mortgage | 330 Tryon DE LLC | NC | Office | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1]	4.25%
First Mortgage | 606 fayetteville LLC and 401 E, Lakewood LLC | NC | Land
Investment in Mortgage Loans on Real Estate
Location of Property	[1]	UNITED STATES
Weighted-average coupon rate	[1]	9.00%
Maximum Maturity Date	[1],[4]	Aug. 01, 2024
Periodic Payment Terms	[1]	Interest Only
Prior Lien	[1]	$ 0
Face Amount	[1]	16,829,962
Carrying value	[1]	$ 16,935,803
First Mortgage | 870 Santa Cruz LLC | CA | Office
Investment in Mortgage Loans on Real Estate
Location of Property	[1]	UNITED STATES
Floor Interest Rate	[1]	0.50%
Maximum Maturity Date	[1],[4]	Dec. 15, 2025
Periodic Payment Terms	[1]	Interest Only
Prior Lien	[1]	$ 0
Face Amount	[1]	17,540,875
Carrying value	[1]	$ 17,669,303
First Mortgage | 870 Santa Cruz LLC | CA | Office | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1]	6.75%
First Mortgage | AGRE DCP Palm Springs LLC | CA | Hotel - full/select service
Investment in Mortgage Loans on Real Estate
Location of Property	[1]	UNITED STATES
Floor Interest Rate	[1]	1.80%
Maximum Maturity Date	[1],[4]	Jan. 01, 2025
Periodic Payment Terms	[1]	Interest Only
Prior Lien	[1]	$ 0
Face Amount	[1]	43,222,381
Carrying value	[1]	$ 43,669,992
First Mortgage | AGRE DCP Palm Springs LLC | CA | Hotel - full/select service | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1]	5.00%
First Mortgage | Austin H. I. Borrower LLC | TX | Hotel - full/select service
Investment in Mortgage Loans on Real Estate
Location of Property	[1],[7]	UNITED STATES
Floor Interest Rate	[1],[7]	0.25%
Maximum Maturity Date	[1],[4],[7]	Oct. 01, 2026
Periodic Payment Terms	[1],[7]	Interest Only
Prior Lien	[1],[7]	$ 0
Face Amount	[1],[7]	13,625,000
Carrying value	[1],[7]	$ 13,725,690
First Mortgage | Austin H. I. Borrower LLC | TX | Hotel - full/select service | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1],[7]	7.50%
First Mortgage | D-G Acquisition #6, LLC and D-G Quimisa, LLC | CA | Land
Investment in Mortgage Loans on Real Estate
Location of Property	[1]	UNITED STATES
Floor Interest Rate	[1]	0.25%
Maximum Maturity Date	[1],[4]	Jul. 21, 2025
Periodic Payment Terms	[1]	Interest Only
Prior Lien	[1]	$ 0
Face Amount	[1]	8,607,092
Carrying value	[1]	$ 8,605,341
First Mortgage | D-G Acquisition #6, LLC and D-G Quimisa, LLC | CA | Land | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1]	7.00%
First Mortgage | Hillsborough Owners LLC | NC | Mixed use
Investment in Mortgage Loans on Real Estate
Location of Property	[1],[8]	UNITED STATES
Floor Interest Rate	[1],[8]	0.25%
Maximum Maturity Date	[1],[4],[8]	Nov. 01, 2024
Periodic Payment Terms	[1],[8]	Interest Only
Prior Lien	[1],[8]	$ 0
Face Amount	[1],[8]	4,863,009
Carrying value	[1],[8]	$ 4,866,542
First Mortgage | Hillsborough Owners LLC | NC | Mixed use | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1],[8]	8.00%
First Mortgage | NB Factory TIC 1, LLC | UT | Student Housing
Investment in Mortgage Loans on Real Estate
Location of Property	[1]	UNITED STATES
Floor Interest Rate	[1]	0.25%
Maximum Maturity Date	[1],[4]	Mar. 05, 2024
Periodic Payment Terms	[1]	Interest Only
Prior Lien	[1]	$ 0
Face Amount	[1]	28,000,000
Carrying value	[1]	$ 28,420,056
First Mortgage | NB Factory TIC 1, LLC | UT | Student Housing | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1]	5.00%
First Mortgage | Patrick Henry Recovery Acquisition LLC | CA | Multifamily
Investment in Mortgage Loans on Real Estate
Location of Property	[1]	UNITED STATES
Floor Interest Rate	[1]	1.50%
Maximum Maturity Date	[1],[4]	Dec. 01, 2024
Periodic Payment Terms	[1]	Interest Only
Prior Lien	[1]	$ 0
Face Amount	[1]	18,000,000
Carrying value	[1]	$ 18,041,124
First Mortgage | Patrick Henry Recovery Acquisition LLC | CA | Multifamily | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1]	2.95%
First Mortgage | The Lux Washington, LLC | WA | Land
Investment in Mortgage Loans on Real Estate
Location of Property	[1]	UNITED STATES
Floor Interest Rate	[1]	0.75%
Maximum Maturity Date	[1],[4]	Jan. 22, 2026
Periodic Payment Terms	[1]	Interest Only
Prior Lien	[1]	$ 0
Face Amount	[1]	3,523,401
Carrying value	[1]	$ 3,382,683
First Mortgage | The Lux Washington, LLC | WA | Land | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1]	7.00%
First Mortgage | University Park Berkeley, LLC | CA | Multifamily
Investment in Mortgage Loans on Real Estate
Location of Property	[1]	UNITED STATES
Floor Interest Rate	[1]	1.50%
Maximum Maturity Date	[1],[4]	Mar. 01, 2025
Periodic Payment Terms	[1]	Interest Only
Prior Lien	[1]	$ 0
Face Amount	[1]	25,815,378
Carrying value	[1]	$ 25,991,962
First Mortgage | University Park Berkeley, LLC | CA | Multifamily | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1]	4.20%
First Mortgage | Windy Hill PV Five CM, LLC | CA | Office
Investment in Mortgage Loans on Real Estate
Location of Property	[1]	UNITED STATES
Floor Interest Rate	[1]	2.05%
Maximum Maturity Date	[1],[4]	Sep. 20, 2023
Periodic Payment Terms	[1]	Interest Only
Prior Lien	[1]	$ 0
Face Amount	[1]	49,954,068
Carrying value	[1]	$ 50,264,568
First Mortgage | Windy Hill PV Five CM, LLC | CA | Office | LIBOR
Investment in Mortgage Loans on Real Estate
Loans basis spread on variable rate	[1]	6.00%
Mezzanine Loans | CA
Investment in Mortgage Loans on Real Estate
Face Amount	[1]	$ 17,444,357
Carrying value	[1]	$ 17,622,804
Mezzanine Loans | 150 Blackstone River Road LLC | MA | Industrial
Investment in Mortgage Loans on Real Estate
Location of Property	[1]	UNITED STATES
Weighted-average coupon rate	[1]	8.50%
Maximum Maturity Date	[1],[4]	Sep. 06, 2027
Periodic Payment Terms	[1]	Interest Only
Prior Lien	[1]	$ 0
Face Amount	[1]	7,000,000
Carrying value	[1]	$ 7,000,000
Mezzanine Loans | High Pointe Mezzanine Investments, LLC | SC | Student Housing
Investment in Mortgage Loans on Real Estate
Location of Property	[1]	UNITED STATES
Weighted-average coupon rate	[1]	13.00%
Maximum Maturity Date	[1],[4]	Jan. 06, 2024
Periodic Payment Terms	[1]	Interest Only
Prior Lien	[1]	$ 0
Face Amount	[1]	3,000,000
Carrying value	[1]	$ 3,145,614
Mezzanine Loans | UNIJ Sole Member LLC | CA | Mixed use
Investment in Mortgage Loans on Real Estate
Location of Property	[1],[9]	UNITED STATES
Weighted-average coupon rate	[1],[9]	15.00%
Maximum Maturity Date	[1],[4],[9]	Jun. 01, 2027
Periodic Payment Terms	[1],[9]	Interest Only
Prior Lien	[1],[9]	$ 0
Face Amount	[1],[9]	7,444,357
Carrying value	[1],[9]	$ 7,477,190

[1] All of the Company’s loans have a prepayment penalty provision.

[2] The Company sold a portion of its interest in this loan through a participation agreement to Terra Fund 6 (Note 8).

[3] The loan participations from the Company do not qualify for sale accounting under ASC 860 and therefore, the gross amount of these loans remain in Schedule IV. See “Obligations under Participation Agreements” in Note 9 and “Transfers of Participation Interest by the Company” in Note 8 in the accompanying notes to the consolidated financial statements.

[4] Maximum maturity date assumes all extension options are exercised.

[5] The Company recorded a specific allowance for loan loss of $12.8 million on this loan as a result of a decline in the value of the collateral (Note 4).

[6] This loan is in maturity default. The Company has exercised its rights and is facilitating the completion of construction of the asset in anticipation of lease up and disposition of the asset.

[7] In September 2021, the Company refinanced a previously-defaulted mezzanine loan with a new first mortgage. This refinancing was accounted for as a troubled debt restructuring and the Company recognized a loss of $0.3 million on the restructuring.

[8] Participation interest is with Terra Fund 6, an affiliated fund advised by the Terra Income Advisors, an affiliate of the Company’s sponsor and Manager (Note 8).

[9] Participation interest is with Mavik Real Estate Special Opportunities Fund REIT, LLC, a related-party real estate investment trust managed by the Manager (Note 8).

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SEC Schedule IV Mortgage Loans on Real Estate - Subnote (Details) - USD ($)	3 Months Ended
	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Investment in Mortgage Loans on Real Estate
Gains (Losses) on Restructuring of Debt	$ 300,000
Allowance for loan losses		$ 13,658,481	$ 3,738,758
Other
Investment in Mortgage Loans on Real Estate
Allowance for loan losses		$ 12,800,000	$ 2,500,000

XML

SEC Schedule IV Mortgage Loans on Real Estate RollForward (Details) - USD ($)		12 Months Ended
		Dec. 31, 2021	Dec. 31, 2020
Investment in Movement in Mortgage Loans on Real Estate [Roll Forward]
PIK interest		$ 1,000,028	$ 2,937,909
Provision for loan losses		(10,904,163)	(3,738,758)
Realized loss on loan repayments		517,989	0
Ending Balance	[1]	469,673,314
Real Estate Loan
Investment in Movement in Mortgage Loans on Real Estate [Roll Forward]
Beginning Balance		422,280,515
New mortgage loans		252,437,733
PIK interest		1,955,109
Accrual, payment and accretion of investment-related fees and other, net		1,397,519
Collections of Principal		(196,780,456)
Provision for loan losses		(10,904,163)
Amortization of premiums		(61,390)
Realized loss on loan repayments		(651,553)
Ending Balance		$ 469,673,314	$ 422,280,515

[1] All of the Company’s loans have a prepayment penalty provision.