Escrow terms

1 These Escrow Terms (the "Escrow Terms") become binding when a Loan Request or Loan Offer (each as defined in the Terms of Use) is accepted through the Platform operated by BTCBACKED AG, Bahnhofstrasse 7, 6300 Zug, Switzerland, CHE-432.413.733 ("BTCBACKED").

2 By registering for an account on the Platform, users are required to agree to the Terms of Use and confirm that they have read and understood the Terms of Use and Privacy Policy. The Collateralized Loan Agreement and the Escrow Terms are accessible via link from the Terms of Use. Acceptance of a loan offer through the Platform constitutes acceptance of the Collateralized Loan Agreement and these Escrow Terms, and both documents will be delivered to the Parties as attachments to the contract confirmation email together with the Loan Details.

3 This Agreement is concluded between:

• (a)the user identified on the Platform as the borrower (the "Borrower");
• (b)the user identified on the Platform as the lender (the "Lender"); and
• (c)BTCBACKED AG, Bahnhofstrasse 7, 6300 Zug, Switzerland, CHE-432.413.733 ("BTCBACKED")

together referred to as the "Parties" and individually as "Party".

4 Collateral securing a loan concluded under a Collateralized Loan Agreement is held in a 2-of-3 multisignature Bitcoin address (the "Escrow Address").

5 Keys to the Escrow Address are held by:

• (a)the Borrower;
• (b)the Lender; and
• (c)BTCBACKED AG, Bahnhofstrasse 7, 6300 Zug, Switzerland, CHE-432.413.733 ("BTCBACKED").

6 No single Party can transfer funds from the Escrow Address unilaterally. Any transaction from the Escrow Address requires the signatures of at least two of the three Parties.

7 BTCBACKED participates solely as a technical co-signer and does not take custody of digital assets in the manner of a traditional custodian. Funds held on the Escrow Address do not form part of the bankruptcy estate of BTCBACKED.

8 The Borrower may fund the Escrow Address through one or more transfers. For each transfer, the Borrower must provide the travel rule information requested by the Platform, including:

• (a)the source of the funds (personal or self-hosted wallet, or exchange or custodial wallet); and
• (b)if the source is an exchange or custodial wallet, the name of the exchange or other custodian.

9 All incoming transactions to the Escrow Address are subject to AML screening by the Platform. If the risk score of an incoming transaction or source address exceeds the acceptable threshold, the Agreement may be placed on hold pending investigation. While an investigation is ongoing, the collateral will be held in escrow and cannot be moved. BTCBACKED will endeavour to resolve such investigation within five (5) business days. If this is not possible, it will provide the Borrower with a reason for the delay and an estimate for its resolution within five (5) business days.

10 If the Borrower cancels the Collateralized Loan Agreement at the collateral deposit stage, any collateral already deposited will be returned to the Borrower minus network (miner) fees. If such cancellation is identified by BTCBACKED as malicious or in bad faith, the Platform may deduct a penalty fee from the collateral before returning it to the Borrower and BTCBACKED may restrict or suspend the Borrower's account.

11 BTCBACKED will sign escrow transactions in accordance with the terms of the applicable Collateralized Loan Agreement only when the conditions defined in these Escrow Terms are satisfied.

12 Once the Borrower confirms receipt of the loan disbursement, the Borrower must co-sign a platform fee payment transaction with BTCBACKED. The platform fee is deducted from the collateral balance held in the Escrow Address.

13 The platform fee amount is as displayed to the Parties at the time of loan offer acceptance in accordance with clause 5(j) of the Collateralized Loan Agreement.

14 To link a Bitcoin Collateral Refund Address to the Collateralized Loan Agreement, the Borrower may:

• (a)select one of their previously registered Bitcoin addresses; or
• (b)register a new Bitcoin address by providing the address, which will undergo an AML check. Once the AML score is within acceptable thresholds according to BTCBACKED's AML policy, the Borrower must verify ownership of the address through one of the methods made available by the Platform and/or the Platform's integrated service providers.

15 Once ownership is verified, the Borrower may link the registered address as the Bitcoin Collateral Refund Address for this Collateralized Loan Agreement. The Borrower may change the linked Bitcoin Collateral Refund Address at any time during the loan period by linking another registered address, unless a valid pre-signed liquidation transaction exists and the LTV exceeds 80%.

16 For the Lender linking a Bitcoin Liquidation Address for the purpose of receiving bitcoin in the event of liquidation, the same registration and verification process as described in clause 14 applies. The Lender may change the linked Bitcoin Liquidation Address at any time during the loan period.

17 When repayment is confirmed in accordance with Sections 8 and 9 of the Collateralized Loan Agreement, BTCBACKED will co-sign the transaction releasing the remaining collateral to the Borrower's registered Bitcoin Collateral Refund Address.

18 To initiate a collateral top-up, the Borrower must submit a request through the Platform by selecting the "Add collateral" function and providing the following information:

• (a)the exact amount of bitcoin being sent;
• (b)the source of the funds (personal or self-hosted wallet, or exchange or custodial wallet); and
• (c)if the source is an exchange or custodial wallet, the name of the exchange.

19 The Borrower will not be permitted to proceed with the collateral top-up before submitting the travel rule information requested by the Platform. All incoming transactions to the Escrow Address are subject to AML screening by the Platform. If the risk score of an incoming transaction or source address exceeds the acceptable threshold, the Agreement may be placed on hold pending investigation. While an investigation is ongoing, the collateral will be held in escrow and cannot be moved.

20 The Platform continuously monitors the LTV of each loan concluded under this Agreement.

21 When the LTV reaches the following thresholds, the Platform issues notifications to the Parties:

• (a)75% LTV — first margin call;
• (b)80% LTV — second margin call;
• (c)85% LTV — third and final margin call; and
• (d)90% LTV — liquidation is triggered in accordance with Section 10.

22 Margin call notifications do not prevent liquidation once the LTV reaches 90%.

23 Once the LTV reaches 80%, the Lender has the option to pre-sign a liquidation transaction through the Platform. The pre-signed liquidation transaction will only be executed if and when the LTV reaches 90%.

24 The details of the liquidation transaction are provided to the Lender through the Platform.

25 A pre-signed liquidation transaction becomes void and the Lender must pre-sign a new liquidation transaction if any of the following occurs:

• (a)the Borrower submits a confirmed repayment;
• (b)the Borrower tops up the collateral;
• (c)the Borrower changes the Bitcoin Collateral Refund Address, subject to clause 15; or
• (d)the Lender changes the Bitcoin Liquidation Address.

26 When liquidation becomes due under Section 13 of the Collateralized Loan Agreement:

• (a)if a valid pre-signed liquidation transaction exists (as contemplated in Section 9), BTCBACKED co-signs and broadcasts the transaction directly without requiring any further action from the Lender; or
• (b)if no valid pre-signed liquidation transaction exists, the liquidation transaction is initiated by the Platform, co-signed by the Lender, and then co-signed by BTCBACKED to execute.

27 BTCBACKED sets the transaction fees for liquidation and collateral release transactions at high priority based on the prevailing mempool rates at the time of the transaction.

28 Collateral top-ups detected in the Bitcoin mempool (even if unconfirmed) prevent liquidation if they keep the LTV below 90%. However, if a top-up transaction carries a fee that is insufficient for timely confirmation, the Lender may raise a dispute. If BTCBACKED determines that the low-fee transaction was submitted with the intent to delay or prevent a legitimate liquidation, it may disregard the unconfirmed top-up for the purposes of LTV calculation and proceed with liquidation in accordance with these Escrow Terms.

29 Once liquidation is triggered, it proceeds regardless of any collateral top-up or repayment transaction that becomes confirmed after the liquidation trigger event.

30 The liquidation transaction transfers bitcoin from the Escrow Address according to the following priority:

• (a)First, bitcoin equivalent to the total outstanding loan amount (remaining principal plus interest), calculated using the price determined under Section 12, to the Lender's registered Bitcoin Liquidation Address;
• (b)Second, the platform liquidation fee, being 5% of the original loan principal amount as calculated at the time of the loan offer acceptance, to BTCBACKED; and
• (c)Third, any remaining bitcoin to the Borrower's registered Bitcoin Collateral Refund Address, minus network (miner) fees for a high-priority transaction.

31 If the Borrower has not provided a Bitcoin Collateral Refund Address at the time liquidation is triggered, any remaining bitcoin after the allocations in clauses 30(a) and 30(b) will remain in the Escrow Address until the Borrower provides and verifies a Bitcoin Collateral Refund Address in accordance with Section 5.

32 The Bitcoin price used to calculate the LTV is determined using the price sources designated by the Platform.

33 The Platform determines the Bitcoin price by reference to the median price across the sources published on the Platform. BTCBACKED may update these price sources from time to time.

34 Temporary outages of the price oracle may occur, including as a result of downtime of the Platform's infrastructure, errors in any price source, or the simultaneous unavailability of all price sources. During any such outage, liquidation triggers may not be evaluated. BTCBACKED shall not be liable for any losses arising from an outage of the price oracle lasting up to two (2) hours, regardless of its cause. For outages exceeding two (2) hours, BTCBACKED shall be liable only to the extent caused by BTCBACKED's fraud, wilful misconduct, or gross negligence.

35 A User Dispute is deemed raised only when a Party submits a dispute notice through the Platform (or other channel specified by BTCBACKED), together with supporting evidence.

36 In making its decision, BTCBACKED may rely on:

• (a)the applicable loan documentation and Platform rules;
• (b)evidence provided by the Parties; and
• (c)objective technical records, including blockchain transaction data, timestamps, confirmations, and Platform logs.

37 BTCBACKED may request additional information and set reasonable deadlines for submissions. It will request the other Party to comment on the User Dispute.

38 Following review, BTCBACKED may, acting reasonably, decide to:

• (a)co-sign a transaction with the Lender;
• (b)co-sign a transaction with the Borrower; or
• (c)decline to co-sign and/or pause Platform actions pending clarification, compliance checks, or further evidence.

39 BTCBACKED will endeavour to resolve a User Dispute within five (5) business days. If this is not possible, it will provide the Parties with a reason for the delay and an estimate for its resolution within five (5) business days.

40 BTCBACKED's decision is final and binding solely for purposes of BTCBACKED's use of its key and operation of the escrow workflow on the Platform. The Parties agree not to require BTCBACKED to act contrary to that decision. BTCBACKED's decision is limited to how BTCBACKED will use its escrow key and operate the Platform. This does not limit any rights of the Parties to seek review by a competent court. BTCBACKED does not act as an arbitrator and does not provide legal advice.

41 To the maximum extent permitted by law, BTCBACKED shall not be liable for any losses arising from or relating to a User Dispute or BTCBACKED's decision or refusal to co-sign, except to the extent caused by BTCBACKED's fraud, wilful misconduct, or gross negligence.

42 If a Party loses access to its signing key, the remaining Parties must cooperate in good faith to execute transactions required under the Collateralized Loan Agreement.

43 If BTCBACKED loses access to its signing key, BTCBACKED will use reasonable efforts to assist the Parties in completing loan settlement.

44 If the Platform becomes unavailable, the Parties may coordinate escrow transactions independently using the 2-of-3 multisignature structure without requiring BTCBACKED's participation.

45 In that case, users may independently decrypt their keys and construct a transaction using BTCBACKED's open source web-based key recovery tool, enabling the release of bitcoin from the Escrow Address without the Platform if needed.

46 BTCBACKED may assist the Parties where reasonably possible during any Platform outage.

47 If BTCBACKED suspends or terminates a Party's access to their Platform account, it will assist such Party where reasonably possible in relation to ongoing Collateralized Loan Agreements.

48 These Escrow Terms are governed by material Swiss law, excluding the United Nations Convention on Contracts for the International Sale of Goods of 11 April 1980 and excluding the provisions of international private law.

49 Notwithstanding the foregoing, where a Party qualifies as a consumer within the meaning of Article 6 of Regulation (EC) No 593/2008 (Rome I Regulation), such Party shall not be deprived of the protection afforded by the mandatory provisions of the law of the country in which such Party is habitually resident.

50 Any disputes arising out of or in connection with these Escrow Terms shall be submitted to, and decided by, the courts of Zug, Switzerland. However, BTCBACKED shall always have the right to take legal proceedings in the court of competent jurisdiction of the Party's domicile.