Transaction Documentation

Below are some key things for Borrowers to note when preparing transaction documentation for a Borrower Pool on the Goldfinch Protocol

Currency Denomination

The Loan Documents should be denominated in USDC (a USD backed stablecoin)

Loan Instrument Documentation

Borrowers should use traditional debt agreements as the starting point for their loan documents. The on-chain / tokenization elements of the transaction happen via the Goldfinch protocol and do not need to form the basis of your loan documentation

Borrower Repayment Clause

The loan documents should dictate that all Borrower payments be made only through the Goldfinch protocol. This is to ensure accurate waterfall calculations between the Backers and the Senior Pool. This waterfall is calculated by the Protocol. Note that these repayments mechanics are binding, and may not be changed by any party (neither the Borrower nor Backers) in a Borrower Pool. Below is a sample language that may be used in your loan documentation to reflect the above:

Payments. All payments due shall be paid by the Borrower on the Goldfinch Protocol which will in turn distribute the Senior Participant Payment and Lenders payments. Payments should be made by the same wallet that received the funds and be paid to the same wallet that disbursed the funds.

Lender of Record

It is important to note that the sole parties to the final transaction are the Borrower and Backers. Goldfinch is not a party to any transaction agreement. Backers individually sign and collectively act as the counterparties to the relevant transaction agreements. After the close of each pool, the list of participating Backers shall be provided to the Borrow by the community. This list constitutes digital signatures by each Backer. Also note that if the Borrower or a related entity to the Borrower contributes to the Borrower Pool, they will have to recuse themselves as a lender. Lender Signatures: In the process of funding a Borrower pool, each Backer electronically signs the loan documents for that pool. Once the pool is fully funded, the community will provide the Borrower with a complete list of Backers along with the time stamp on the Backer's signing. This list is to be appended as an Exhibit to the final loan documents Lender Decisions: Any and all lender decisions may be communicated via the electronic data room. Along with each communication, evidence must be provided of on-chain agreement amongst lenders (for example, in the form of a governance vote) has been made to serve the notice Borrower Responsibility: As a Borrower, you are responsible for including all relevant disclosures, representations, and warranties related to your particular jurisdiction, facts, and circumstances in the Loan Documentation. Please also note that Borrowers cannot act as Facility and Security Agents. These will have to be sourced externally Single Certificates: To the extent that any certificates or other documents have to be created as part of the facility, they should be pledged to the Lenders collectively (i.e. a single document). The Goldfinch protocol will allocate the rights automatically to each Lender on a pro-rata basis. Pro-rata rights to Lenders: Please note that if for any reason the debenture amount does not equal the facility amount, rights are allocated on a pro-rata basis to the Lenders

Backer Transferability

Restrictions on a lender's ability to transfer their positions must be removed from all loan documentation. The Protocol will update borrowers as to changes in their lenders. Please note that any redemption interest of principal repayment of each loan can only be made by a lender who is KYC’d

Repayment Accounting and Documentation

Interest on the Goldfinch protocol is calculated every thirty days. Traditional clauses that otherwise define the repayment schedule, such as adjustment for business days, must be changed to reflect the protocol's payment mechanism. Below is a sample catch-all phrase that Borrowers can use, for an abundance of clarity:

Notwithstanding any other provision in this Agreement, the Parties acknowledge and agree that the amount of interest payable by the Issuer to the Lenders and the date on which such payment is due shall be subject to the schedule set out in the Goldfinch Protocol, which absent manifest error, shall supersede in the case of any inconsistency with Exhibit “B”.

Repayment Accounting and Documentation

Borrowers are required to provide covenant compliance certificates to the Lenders at a predetermined frequency. This requirement is to be included in the loan documentation.

Tax gross-up

Borrowers must gross-up taxes, including withholding tax payments. The Protocol must receive a fixed amount of interest specified for the loan. This is to be reflected in the Loan Documentation

Electronic Delivery of Documents

All documents and notices must be delivered in digital form and must not require wet-ink signatures or physical receipt. This applies to documents from both Borrower and Lenders and includes, amongst others,:

• Executed documents related to the loan

• Any notices to enforce rights

• Any reports required per document reporting requirements

Other Important Definitions

See below other definitions to be included in the transaction documentation:

• “Goldfinch Protocol”, means the Goldfinch protocol, a decentralized crypto borrowing platform found at the following website https://app.goldfinch.finance/earn.

• "USDC" means is a tokenized U.S. dollar, for which the value of one USDC coin pegged 1:1 to the value of one U.S. dollar.

• "Unique Identifier" or "UID" means an NFT that represents an entities KYC status that enables them to participate on the Goldfinch protocol