Collateralized loan agreement

1 This Collateralized Loan Agreement (the "Agreement") becomes 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 this Agreement and the 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"); and
• (b)the user identified on the Platform as the lender (the "Lender"),

together referred to as the "Parties".

4 BTCBACKED operates the Platform through which this Agreement is concluded but is not a party to the loan relationship between Borrower and Lender. BTCBACKED's role is limited to operating the Platform and acting as a technical co-signer under the Escrow Terms.

5 Prior to acceptance of a loan offer, the Platform displays the following Loan Details:

• (a)counterparty;
• (b)loan principal amount;
• (c)currency (stablecoin, including network, or fiat currency);
• (d)loan period;
• (e)interest rate;
• (f)interest amount;
• (g)total repayment amount (principal plus interest);
• (h)loan-to-value ratio ("LTV");
• (i)required initial collateral;
• (j)platform fee; and
• (k)total escrow deposit amount (required initial collateral plus platform fee).

6 Acceptance of these Loan Details through the Platform constitutes formation of this Agreement on the terms displayed.

7 This Agreement is concluded upon acceptance of the Loan Details in accordance with clause 6 but is subject to a condition precedent and becomes effective only once the Borrower has validly deposited the required collateral into the Escrow Address in accordance with Section 2 of the Escrow Terms.

8 The following addresses are associated with each loan concluded under this Agreement:

• (a)Loan Payment Address — the address to which the Lender disburses the loan amount to the Borrower;
• (b)Loan Repayment Address — the address to which the Borrower repays the loan amount to the Lender;
• (c)Bitcoin Collateral Refund Address — the registered Bitcoin address to which collateral is returned to the Borrower upon collateral release, or upon liquidation (if any bitcoin remains after the liquidation allocation);
• (d)Bitcoin Liquidation Address — the registered Bitcoin address to which the Lender receives bitcoin in the event of liquidation; and
• (e)Escrow Address — the 2-of-3 multisignature Bitcoin address in which collateral is held during the loan period.

9 The Loan Payment Address and Loan Repayment Address are provided by the Parties during the escrow creation step as set out in Section 4 of this Agreement; the Bitcoin Collateral Refund Address, the Bitcoin Liquidation Address and the Escrow Address are established in accordance with the Escrow Terms.

10 Address changes are subject to the following rules:

• (a)The Lender may change the Loan Repayment Address at any time during the loan period, provided that there are no pending repayment claims from the Borrower awaiting the Lender’s confirmation in accordance with Section 8 of this Agreement. The Borrower will be notified of any such change.
• (b)The Lender may change the Bitcoin Liquidation Address at any time during the loan period by linking another registered Bitcoin address in accordance with Section 7 of this Agreement.
• (c)The Borrower may change the Bitcoin Collateral Refund Address at any time during the loan period by linking another registered Bitcoin address in accordance with Section 7 of this Agreement.

11 Where a transfer is made to the respective address associated with this Agreement, such transfer discharges the transferring Party's obligation, regardless of whether the receiving Party can access this address.

12 Within twelve (12) hours of acceptance of the loan offer, both the Borrower and the Lender must:

• (a)provide their respective Loan Payment Address (Lender) and Loan Repayment Address (Borrower); and
• (b)provide their public key, which is required to create the 2-of-3 multisignature Escrow Address together with the platform key, by selecting one of two methods made available on the Platform: the password method or the hardware wallet method.

13 If either Party fails to complete the steps set out in clause 12 within the twelve (12)-hour period, the Agreement is cancelled automatically by the Platform.

14 Either Party may cancel the Agreement at the escrow creation stage. Cancellation at this stage may result in BTCBACKED restricting or suspending the cancelling Party's account if such cancellation is deemed to be in bad faith.

15 The Borrower must deposit the required collateral into the Escrow Address in accordance with the Escrow Terms within twelve (12) hours after the Escrow Address is created.

16 If the collateral is not deposited within the period specified in clause 15, the Agreement terminates automatically.

17 The Borrower may cancel the Agreement at the collateral deposit stage in accordance with the Escrow Terms.

18 The Lender must disburse the loan amount to the Borrower's Loan Payment Address within twelve (12) hours after the required collateral is confirmed in the Escrow Address.

19 Upon disbursement, the Lender must submit a loan disbursement claim through the Platform, including the transaction identifier (TXID) as proof of payment.

20 If the Lender fails to submit the disbursement claim with TXID proof within the twelve (12)-hour period specified in clause 18, the Agreement enters dispute status. BTCBACKED will review the dispute and determine whether:

• (a)the Lender can demonstrate that the funds were sent to the correct Loan Payment Address, in which case the Agreement resumes and proceeds to the next step; or
• (b)the Lender cannot demonstrate that the funds were sent, in which case the Agreement is cancelled and the Borrower reclaims the collateral from Escrow Address minus network (miner) fees.

21 Upon receipt of the Lender's disbursement claim, the Borrower must confirm or dispute the claim through the Platform:

• (a)If the Borrower confirms the disbursement, the Agreement proceeds to the platform fee payment step (Section 4 of the Escrow Terms).
• (b)If the Borrower disputes the disbursement, BTCBACKED will intervene. BTCBACKED’s determination — whether to resume the Agreement (if the Lender proves funds were sent to the correct address) or to cancel the Agreement (with the Borrower reclaiming collateral minus network fees) — is final.

22 Before submitting any repayment, the Borrower must link a Bitcoin Collateral Refund Address to the Agreement in accordance with the Escrow Terms. The Lender may register and link a Bitcoin Liquidation Address for the purpose of receiving bitcoin in the event of liquidation in accordance with the Escrow Terms.

23 The Borrower must repay the total repayment amount (principal plus interest) by the maturity date specified in the Loan Details.

24 If a Depeg Event (as defined in the Terms of Use) affecting the Loan Stablecoin persists for a continuous period of at least twelve (12) hours, either Party may raise a dispute through the Platform. Upon such dispute, BTCBACKED may designate an alternative stablecoin in which the disputed and/or outstanding repayment obligations under this Agreement are to be settled. The disputed and/or outstanding repayment obligation will remain the same numerical amount, denominated in the alternative stablecoin.

25 Early repayment is permitted. Partial repayments are permitted. Early or partial repayment does not reduce the interest amount.

26 To submit a repayment, the Borrower submits one or more repayment claims through the Platform, including the amount and the transaction identifier (TXID) as proof of each payment.

27 The Lender has twelve (12) hours from the time each repayment claim is submitted to either:

• (a)confirm the repayment, after which the outstanding loan balance, LTV, and liquidation price will update accordingly; or
• (b)dispute the repayment claim, in which case BTCBACKED will intervene and, based on available evidence, may approve, decline, or amend the repayment claim. BTCBACKED’s determination is final.

28 The Borrower is solely responsible for ensuring that each repayment is made to the Lender's current Loan Repayment Address. The Loan Repayment Address may be changed by the Lender during the loan period provided that there are no pending repayment claims from the Borrower awaiting the Lender's confirmation. It is the Borrower's sole responsibility to verify that any repayment is made to the correct address.

29 A repayment made to the previously valid Loan Repayment Address shall be deemed proper and valid if the change of address occurred after submission of the repayment claim or after the relevant transaction had been signed and broadcasted.

30 Once the sum of confirmed repayments equals the total repayment amount (principal plus interest), and provided that the maturity date has not been reached and the Agreement has not been subject to liquidation under Part IV, the Agreement proceeds to the collateral release stage in accordance with the Escrow Terms.

31 Following collateral release, both Parties are invited to provide their ratings of the counterparty and the Platform.

32 If a Party receives funds to which it is not entitled under this Agreement, that Party must promptly return the funds to the sender.

33 The Borrower is responsible for:

• (a)maintaining the LTV below the liquidation threshold of 90% throughout the loan period, whether by depositing additional collateral (collateral top-ups) or by making partial repayments; and
• (b)repaying the total repayment amount (principal plus interest) in full before the maturity date.

34 The Borrower acknowledges that rapid market movements may prevent timely response to margin calls and that BTCBACKED is not liable for any losses resulting from the Borrower's failure to maintain sufficient collateral.

35 The Borrower may deposit additional collateral during the loan period in order to lower the LTV and/or avoid price-triggered liquidation in accordance with the Escrow Terms.

36 Liquidation may be triggered under either of the following circumstances in accordance with the Escrow Terms:

41 The Borrower's liability for repayment under this Agreement is limited to the collateral. The liquidation of the loan therefore discharges the Borrower's liability under this Agreement, regardless of whether it leads to a transfer to the Lender in the amount of the total repayment amount.

42 The Bitcoin price used to calculate the LTV is determined in accordance with the Escrow Terms.

43 Unless otherwise specified on the Platform, one network confirmation is sufficient for a transaction to be treated as received for the purposes of this Agreement. However, if, upon a User Dispute being raised, BTCBACKED reasonably determines that a transaction is affected by a chain reorganisation or is indicative of abuse, BTCBACKED may disregard such confirmation and resolve the User Dispute as though the relevant payment had not been made.

44 Only confirmed transactions are considered effective under this Agreement, subject to Sections 7 and 10 of the Escrow Terms (mempool top-ups).

45 A dispute may arise between the Lender and the Borrower regarding the loan, repayment, collateral, liquidation, distribution, or instructions submitted through the Platform (a "User Dispute"). It will be resolved by BTCBACKED in accordance with the Escrow Terms. BTCBACKED's determination is final for the operational administration of this Agreement and the execution of the escrow process. This does not limit any rights of the Parties to seek review by a competent court.

46 This Agreement is 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.

47 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.

48 Any disputes, claims, or controversies arising out of or in connection with this Agreement 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.

49 This Agreement, together with the Escrow Terms and the Terms of Use, constitutes the entire Agreement between the Parties in relation to the loan concluded through the Platform, and supersedes all prior written or oral agreements between the Parties in respect of such loan. In the event of any conflict between this Agreement and the Escrow Terms, the Escrow Terms shall prevail in relation to the mechanics of escrow transactions.

50 If any provision of this Agreement is held to be invalid or unenforceable under applicable law, the remaining provisions shall continue in full force and effect. The Parties undertake to replace any invalid provision with a valid provision that achieves, to the extent possible, the economic intent of the invalid provision.

51 The Parties acknowledge that this Agreement is entered into electronically through the Platform and that all communications relating to the loan are provided by electronic means through the Platform and/or the email addresses associated with the Parties' accounts.

52 This Agreement is drafted in English. In the event of any discrepancy between an English version and any translation, the English version shall prevail.