Subscription Agreement
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. THIS INVESTMENT IS SUITABLE ONLY FOR PERSONS WHO CAN BEAR THE ECONOMIC RISK FOR AN INDEFINITE PERIOD OF TIME AND WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. FURTHERMORE, INVESTORS MUST UNDERSTAND THAT SUCH INVESTMENT IS ILLIQUID AND IS EXPECTED TO CONTINUE TO BE ILLIQUID FOR AN INDEFINITE PERIOD OF TIME. THE NOTES WILL NOT BE LISTED ON ANY SECURITIES EXCHANGE AND, PER PLATFORM POLICY, MUST BE HELD BY REGISTERED LIVE OAK FINANCIAL INVESTORS; THE NOTES THEMSELVES ARE NOT SUBJECT TO FEDERAL TRANSFER RESTRICTIONS; WHILE WE MAY, IN OUR DISCRETION, PERMIT A SECONDARY TRADING VENUE IN THE FUTURE, THERE IS NO ASSURANCE A SECONDARY MARKET WILL DEVELOP.
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND STATE SECURITIES OR BLUE SKY LAWS. ALTHOUGH AN OFFERING STATEMENT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”), THAT OFFERING STATEMENT DOES NOT INCLUDE THE SAME INFORMATION THAT WOULD BE INCLUDED IN A REGISTRATION STATEMENT UNDER THE ACT. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE MERITS OF THIS OFFERING OR THE ADEQUACY OR ACCURACY OF THE SUBSCRIPTION AGREEMENT OR ANY OTHER MATERIALS OR INFORMATION MADE AVAILABLE TO SUBSCRIBER IN CONNECTION WITH THIS OFFERING OVER THE WEB-BASED PLATFORM MAINTAINED BY LIVE OAK FINANCIAL LLC (THE “COMPANY”, “ISSUER”). ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
INVESTORS WHO ARE NOT “ACCREDITED INVESTORS” (AS THAT TERM IS DEFINED IN SECTION 501 OF REGULATION D PROMULGATED UNDER THE ACT) ARE SUBJECT TO LIMITATIONS ON THE AMOUNT THEY MAY INVEST, AS SET OUT IN SECTION 4. THE COMPANY IS RELYING ON THE REPRESENTATIONS AND WARRANTIES SET FORTH BY EACH SUBSCRIBER IN THIS SUBSCRIPTION AGREEMENT AND THE OTHER INFORMATION PROVIDED BY SUBSCRIBER IN CONNECTION WITH THIS OFFERING TO DETERMINE THE APPLICABILITY TO THIS OFFERING OF EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
THE OFFERING MATERIALS MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING
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STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.
THE COMPANY MAY NOT BE OFFERING THE SECURITIES IN EVERY STATE. THE OFFERING MATERIALS DO NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR JURISDICTION IN WHICH THE SECURITIES ARE NOT BEING OFFERED.
THE COMPANY RESERVES THE RIGHT IN ITS SOLE DISCRETION AND FOR ANY REASON WHATSOEVER TO MODIFY, AMEND AND/OR WITHDRAW ALL OR A PORTION OF THE OFFERING AND/OR ACCEPT OR REJECT IN WHOLE OR IN PART ANY PROSPECTIVE INVESTMENT IN THE SECURITIES OR TO ALLOT TO ANY PROSPECTIVE INVESTOR LESS THAN THE AMOUNT OF SECURITIES SUCH INVESTOR DESIRES TO PURCHASE. EXCEPT AS OTHERWISE INDICATED, THE OFFERING MATERIALS SPEAK AS OF THEIR DATE. NEITHER THE DELIVERY NOR THE PURCHASE OF THE SECURITIES SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THAT DATE.
Subscription • The undersigned (“Subscriber”) hereby offers to subscribe for, which offer may be withdrawn at any time prior to Acceptance; the subscription becomes binding only upon Acceptance (as defined in the Offering Circular), and agrees to purchase Borrower Payment Dependent Note (the “Securities”) from Live Oak Financial LLC (the “Company”) at a purchase price of ${{purchasePrice}} principal amount of the Security (the “Per Security Price”), upon the terms and conditions set forth herein. The minimum subscription is $50; orders may be placed in $0.01 increments, except when fulfilling a corresponding loan’s remaining principal. • Subscriber understands that the Securities are being offered pursuant to an offering circular dated Jul 15, 2025 (the “Offering”) filed with the SEC as part of the Offering Statement. By executing this Subscription Agreement, Subscriber acknowledges that Subscriber has received this Subscription Agreement, copies of the Offering Circular and Offering Statement including exhibits thereto and any other information required by the Subscriber to make an investment decision. • Subscriptions are accepted only if the related Borrower Loan listing reaches 100% funding within a five-day window; we do not accept unmatched orders. We do not ACH-debit or otherwise collect investor funds prior to acceptance. Upon acceptance, we initiate ACH debit pursuant to Section 2.3 and, after settlement, we disburse borrower proceeds and issue the Note(s) as of the Borrower Loan disbursement date. If a listing does not fully fund within the five-day window or expires, no orders are accepted and no ACH debits are |
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initiated. We will not accept subscriptions before required state securities registrations (including our Texas issuer-dealer and agent registrations) are effective. • The aggregate principal amount of Securities sold shall not exceed $600,000 (the ‘Maximum Offering’). The Company may accept subscriptions until the termination of the Offering in accordance with its terms (the “Termination Date”). The Company may elect at any time to close all or any portion of this offering, on various dates at or prior to the Termination Date (each a “Closing Date”). • In the event of rejection of this subscription in its entirety, or in the event the sale of the Securities (or any portion thereof) is not consummated for any reason, this Subscription Agreement shall have no force or effect, except for Section 5 hereof, which shall remain in force and effect. | ||
Purchase Procedure • Payment. The purchase price for the Securities will be ACH-debited only after the Company accepts the subscription (the ‘Closing Date’). No ACH debit occurs prior to acceptance. Payment for the aggregate purchase price of the Securities will be ACH debited from the Subscriber’s financial account designated on the Company’s web-based platform. In addition, and as further described in Section 2.3, Subscriber authorizes the Company to initiate ACH debit entries (including variable-amount debits) to such account to reverse provisional credits, to correct errors, and to recover amounts owed by Subscriber arising from chargebacks, returns, or other negative balances related to the Securities. • Record keeping. The undersigned shall receive notice and evidence of the digital entry of the number of the Securities owned by undersigned reflected on the books and records of the Company, which books and records shall bear a notation that the Securities were sold in reliance upon Regulation A. • ACH Authorization; Credits and Debits (Preauthorized EFTs). • Authorization. Subscriber authorizes the Company (and its payment processor/ODFI) to initiate credit and debit entries via the ACH Network to and from the deposit account identified in Subscriber’s profile (the “Bank Account”) for: (i) collection of subscription amounts after acceptance; (ii) distribution of amounts due on the Notes; and (iii) recoupment of over-payments and other amounts owed by Subscriber under this Agreement and the Offering Circular, including amounts arising from reversals, returns, or chargebacks of borrower payments. • Consumer / Business Accounts. If the Bank Account is a consumer account, this authorization constitutes a preauthorized electronic fund transfer under Regulation E and must be in writing and signed or similarly authenticated; Subscriber will receive a copy of this authorization electronically. If the Bank Account is a business account, this authorization is governed by the Nacha Operating Rules and applicable law. • Variable-Amount Debits; Advance Notice. Debits to recoup over-payments will vary in amount. The Company will provide written electronic notice at least ten (10) days before each debit, stating the amount and scheduled date. No single debit will exceed the lesser of (x) $5,000 or (y) the applicable over-payment previously credited to Subscriber (including any contemporaneous fees/adjustments authorized hereunder). • Scope and Limits. Each debit for recoupment will not exceed the applicable over-payment (or the notice cap if the Range Option applies). The Company will not use Nacha “Reversal” entries to recover distributions; it will originate a new debit entry pursuant to this authorization. |
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• Stop-Payment; Revocation (Reg E 1005.10(c)). Subscriber may stop payment on a scheduled debit by notifying their financial institution at least three (3) business days before the scheduled date. Subscriber may revoke this authorization at any time by (i) updating Account Settings and (ii) emailing contact@live-oak-financial.com; revocation will be processed promptly for future debits. • Returns; Re-initiation (Nacha). If an entry is returned for insufficient/uncleared funds or account not available, the Company may re-initiate the debit as permitted by the Nacha Rules. If a debit is returned as unauthorized, the Company may suspend distributions and apply set-off against future payments until cured. • Record Retention; Authentication. The Company will retain proof of authorization for at least two years from termination and uses commercially reasonable authentication and security controls for WEB/PPD entries. • Contact and Copies. Subscriber will receive an electronic copy of this authorization; additional copies are available on request. | ||
Representations and Warranties of the Company • Organization and Standing. The Company is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Texas. The Company has all requisite power and authority to own and operate its properties and assets, to execute and deliver this Subscription Agreement and any other agreements or instruments required hereunder. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business. • Issuance of the Securities. The issuance, sale and delivery of the Securities in accordance with this Subscription Agreement has been duly authorized by all necessary limited liability company action on the part of the Company. The Securities, when so issued, sold and delivered against payment therefor in accordance with the provisions of this Subscription Agreement, will be valid and binding obligations of the Company, enforceable in accordance with their terms (subject to applicable laws relating to creditors’ rights and equitable remedies). • Authority for Agreement. The execution and delivery by the Company of this Subscription Agreement and the consummation of the transactions contemplated hereby (including the issuance, sale and delivery of the Securities) are within the Company’s powers and have been duly authorized by all necessary limited liability company action on the part of the Company. Upon full execution hereof, this Subscription Agreement shall constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, |
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injunctive relief, or other equitable remedies and (iii) with respect to provisions relating to indemnification and contribution, as limited by considerations of public policy and by federal or state securities laws. • No filings. Assuming the accuracy of the Subscriber’s representations and warranties set forth in Section 4 hereof, no order, license, consent, authorization or approval of, or exemption by, or action by or in respect of, or notice to, or filing or registration with, any governmental body, agency or official is required by or with respect to the Company in connection with the execution, delivery and performance by the Company of this Subscription Agreement except (i) for such filings as may be required under Regulation A or under any applicable state securities laws, (ii) for such other filings and approvals as have been made or obtained, or (iii) where the failure to obtain any such order, license, consent, authorization, approval or exemption or give any such notice or make any filing or registration would not have a material adverse effect on the ability of the Company to perform its obligations hereunder. • Capitalization. The authorized and outstanding securities of the Company immediately prior to the initial investment in the Securities is as set forth “Directors, Executive Officers and Significant Employees—Security Ownership of Management and Certain Securityholders” in the Offering Circular. Except as set forth in the Offering Circular, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), or agreements of any kind (oral or written) for the purchase or acquisition from the Company of any of its securities. • Financial Statements. Complete copies of the Company’s financial statements consisting of the balance sheets of the Company as at December 31, 2024 and Interim, May 11, 2025 and the respective statements of income, stockholders’ equity and cash flows (the “Financial Statements”) have been made available to the Subscriber and appear in the Offering Circular. The Financial Statements are based on the books and records of the Company and fairly present in all material respects the financial condition of the Company as of the respective dates they were prepared and the results of the operations and cash flows of the Company for the periods indicated. Umer Farooq, which has audited the Financial Statements, is an independent accounting firm within the rules and regulations adopted by the SEC. • Proceeds. The Company shall use the proceeds from the issuance and sale of the Securities as set forth in “Use of Proceeds” in the Offering Circular. • Litigation. Except as set forth in the Offering Circular, there is no pending action, suit, proceeding, arbitration, mediation, complaint, claim, charge or investigation before any court, arbitrator, mediator or governmental body, or to the Company’s knowledge, currently threatened in writing (a) against the Company or (b) against any consultant, officer, manager, director or key employee of the Company arising out of his or her consulting, employment or board relationship with the Company or that could otherwise materially impact the Company. • Payments to Subscriber. On each Payment Date, the Company will pay from its general funds the Amount Due on the Note, calculated by reference to amounts applied to the corresponding Reference Loan during the period, as described in the Offering Circular under Calculation of Amount Due. Investors are creditors of the Company only and have no lien, security, or ownership interest in any borrower, Borrower Loan, or remittances. The Amount Due for any period may be zero. |
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• Reversals and Clawbacks. If a borrower payment credited in a prior period is returned or reversed after the Company has remitted to Subscriber, the Company will (i) cancel any pending credit; (ii) initiate an ACH debit to the Bank Account to recover the over-payment, consistent with §2.3 (including the 10-day notice requirement and the per-debit cap of the lesser of $5,000 or the applicable over-payment); and (iii) reflect the reversal in the next Calculation Statement. If any portion is unpaid or a debit is returned or prohibited by law, the Company may set off the remaining shortfall against subsequent payments for the same series and suspend further distributions until cured. | ||
| 4. | Representations and Warranties of the Subscriber |
By executing this Subscription Agreement, Subscriber (and, if Subscriber is purchasing the Securities subscribed for hereby in a fiduciary capacity, the person or persons for whom Subscriber is so purchasing) represents and warrants, which representations and warranties are true and complete in all material respects as of such Subscriber’s respective Closing Date
• Requisite Power and Authority. Such Subscriber has all necessary power and authority under all applicable provisions of law to execute and deliver this Subscription Agreement and other agreements required hereunder and to carry out their provisions. All action on Subscriber’s part required for the lawful execution and delivery of this Subscription Agreement and other agreements required hereunder have been or will be effectively taken prior to the Closing Date. Upon their execution and delivery, this Subscription Agreement and other agreements required hereunder will be valid and binding obligations of Subscriber, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights and (b) as limited by general principles of equity that restrict the availability of equitable remedies. • Investment Representations. Subscriber understands that the Securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”). Subscriber also understands that the Securities are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Subscriber’s representations contained in this Subscription Agreement. • Illiquidity and Continued Economic Risk. Subscriber acknowledges and agrees that there is no ready public market for the Securities and that there is no guarantee that a market for their resale will ever exist. Subscriber must bear the economic risk of this investment indefinitely and the Company has no obligation to list the Securities on any market or take any steps (including registration under the Securities Act or the Securities Exchange Act of 1934, as amended) with respect to facilitating trading or resale of the Securities. Subscriber acknowledges that Subscriber is able to bear the economic risk of losing Subscriber’s entire investment in the Securities. Subscriber also understands that an investment in the Company involves significant risks and has taken full cognizance of and understands all of the risk factors relating to the purchase of Securities. • Accredited Investor Status or Investment Limits. Subscriber represents that either: • Subscriber is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act. Subscriber represents and warrants that the information set forth in response to question (c) on the signature page hereto concerning Subscriber is true and correct; or |
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• The purchase price of the Securities, together with any other amounts previously used to purchase Securities in this offering, does not exceed 10% of the greater of the Subscriber’s annual income or net worth. |
Subscriber represents that, if it had any questions regarding accredited status or the application of investment limits, it sought professional advice, and further represents that it is a ‘qualified purchaser’ under Regulation A. If Subscriber is a non-accredited natural person, Subscriber acknowledges the Platform’s enforcement of NASAA-informed suitability thresholds—(a) annual income ≥ $80,000 and net worth ≥ $80,000 (excluding home, furnishings, and autos), with total purchases limited to 10% of net worth; or (b) net worth ≥ $280,000 (same exclusions), with total purchases limited to 10% of net worth—in addition to the Regulation A Tier 2 10% limit, and agrees that orders may be blocked or reduced to comply.
• No Reliance on Tax Advice. The Subscriber has reviewed with his, her or its own tax advisors the foreign, federal, state and local tax consequences of this investment, where applicable, and the transactions contemplated by this Agreement. The Subscriber is relying solely on such advisors with respect to tax matters and not on any tax advice of the Company or any of its agents, and understands that the Subscriber (and not the Company) shall be responsible for the Subscriber’s own income tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. Nothing in this Section 4.5 limits or waives any rights under federal or state securities laws or the Subscriber’s ability to rely on the Company’s disclosures in the Offering Circular and any amendments or supplements thereto. • Independent Legal Advice. The Subscriber and the Company acknowledge that each has had the opportunity to review this Agreement and the transactions contemplated by this Agreement and has consulted with its own legal counsel, and other advisors prior to execution of the within Agreement, and that the Company will pay the fees and expenses with respect to the Offering, including all filing fees. • Company Information. Subscriber understands that the Company is subject to all the risks that apply to early-stage companies, whether or not those risks are explicitly set out in the Offering Circular. Subscriber has had such opportunity as it deems necessary (which opportunity may have presented through online chat or commentary functions) to discuss the Company’s business, management and financial affairs with managers, officers and management of the Company and has had the opportunity to review the Company’s operations and facilities. Subscriber has also had the opportunity to ask questions of and receive answers from the Company and its management regarding the terms and conditions of this investment. Subscriber acknowledges that except as set forth herein, no representations or warranties have been made to Subscriber, or to Subscriber’s advisors or representative, by the Company or others with respect to the business or prospects of the Company or its financial condition. • Payment Contingency. Subscriber understands and acknowledges that all payments on the Securities are made by the Company from its general funds, and that the Amount Due on each Payment Date is calculated by reference to amounts applied to the corresponding Reference Loan as described in the Offering Circular. Investors are creditors of the Company only and hold no lien, security, or ownership interest in any borrower or Borrower Loan. The Amount Due for any period may be zero. |
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• Bank Account Authorization. Subscriber is the owner or an authorized signer of the bank account(s) designated on the Company’s platform and authorizes ACH debits and credits to such account(s) as described in this Agreement, including Section 2.3. • Texas Residency. Subscriber represents and warrants that Subscriber is a Texas resident with a Texas physical address and acknowledges that, as disclosed in the Offering Circular, the Company has voluntarily limited sales to Texas residents at this time. | ||
| 7. | Survival of Representations and Indemnity. The representations, warranties and covenants made by the Subscriber herein shall survive the Termination Date of this Agreement. The Subscriber agrees to indemnify and hold harmless the Company and its respective officers, directors and affiliates, and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all reasonable attorneys’ fees, including attorneys’ fees on appeal) and expenses reasonably incurred in investigating, preparing or defending against any false representation or warranty or breach of failure by the Subscriber to comply with any covenant or agreement made by the Subscriber herein or in any other document furnished by the Subscriber to any of the foregoing in connection with this transaction. | |
| 8. | Governing Law; Jurisdictions. This Agreement shall be governed by and construed under the laws of the State of Texas without respect to conflict of laws. | |
| 9. | Notices. Notice, requests, demands and other communications relating to this Subscription Agreement and the transactions contemplated herein shall be in writing and shall be deemed to have been duly given if and when (a) delivered personally, on the date of such delivery; or (b) mailed by registered or certified mail, postage prepaid, return receipt requested, in the third day after the posting thereof; or (c) emailed, telecopied or cabled, on the date of such delivery to the address of the respective parties as follows: |
If to the Company, to:
Live Oak Financial LLC
Attn: Investor Relations
3520 Alpine Autumn Dr.
Austin, Texas 78744
If to a Subscriber, to the subscriber’s address as shown on the signature page hereto or to such other address as may be specified by written notice from time to time by the party entitled to receive such notice. Any notices, requests, demands or other communications by telecopy or cable shall be confirmed by letter given in accordance with (a) or (b) above.
Miscellaneous. • All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons or entity or entities may require. • This Subscription Agreement is not transferable or assignable by Subscriber. • The representations, warranties and agreements contained herein shall be deemed to be made by and be binding upon Subscriber and its heirs, executors, administrators and successors and shall inure to the benefit of the Company and its successors and assigns. • None of the provisions of this Subscription Agreement may be waived, changed or terminated orally or otherwise, except as specifically set forth herein or except by a writing signed by the Company and Subscriber. |
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• In the event any part of this Subscription Agreement is found to be void or unenforceable, the remaining provisions are intended to be separable and binding with the same effect as if the void or unenforceable part were never the subject of agreement. • The invalidity, illegality or unenforceability of one or more of the provisions of this Subscription Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Subscription Agreement in such jurisdiction or the validity, legality or enforceability of this Subscription Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law. • This Subscription Agreement supersedes all prior discussions and agreements between the parties with respect to the subject matter hereof and contains the sole and entire agreement between the parties hereto with respect to the subject matter hereof. • The headings used in this Subscription Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof. • This Subscription Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. • No failure or delay by any party in exercising any right, power or privilege under this Subscription Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. |
[SIGNATURE PAGE FOLLOWS]
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LIVE OAK FINANCIAL LLC
SUBSCRIPTION AGREEMENT SIGNATURE PAGE
The undersigned, desired to purchase Securities of Live Oak Financial LLC, by executing this signature page, hereby executes, adopts and agrees to all terms, conditions and representations of the Subscription Agreement.
{{subscriberSignature}} | {{dateOfSigning}} | |
Signature | Date | |
{{subscriberName}} | ||
Name (Print) | ||
{{subscriberAddress}} | ||
Address | ||
{{subscriberEmail}} | ||
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APPENDIX A
An accredited investor includes the following categories of investor:
(1) Any bank as defined in section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any insurance company as defined in section 2(a)(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;
(2) Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;
(3) Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;
(4) Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;
(5) Any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000.
(i) Except as provided in paragraph (a)(5)(ii) of this section, for purposes of calculating net worth under this paragraph (a)(5):
(A) The person’s primary residence shall not be included as an asset;
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(B) Indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and
(C) Indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability;
(ii) Paragraph (a)(5)(i) of this section will not apply to any calculation of a person’s net worth made in connection with a purchase of securities in accordance with a right to purchase such securities, provided that:
(A) Such right was held by the person on July 20, 2010;
(B) The person qualified as an accredited investor on the basis of net worth at the time the person acquired such right; and
(C) The person held securities of the same issuer, other than such right, on July 20, 2010.
(6) Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;
(7) Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in §230.506(b)(2)(ii); and
(8) Any entity in which all of the equity owners are accredited investors.
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This Investor Registration Agreement (this “Agreement”) is made and entered into among you and Live Oak Financial LLC (“Live Oak Financial,” “LOF” “Issuer”, “I”, “we,” “us,” “our”). This Agreement will govern all purchases of Borrower Payment Dependent Notes (“Notes”) that you (“Investor”) may, from time to time, make from LOF.
Any Note you purchase will be a special, limited obligation of LOF only and not an obligation of the borrower on the corresponding Borrower Loan (as defined below). The Note will be unsecured; you will not own the corresponding Borrower Loan and you will have no right to pursue the borrower on the corresponding Borrower Loan for payment of such loan or the Note tied to such loan.
LOF offers and sells the Notes pursuant to an offering statement under Regulation A, Tier 2. LOF will not accept any subscription unless and until the offering statement has been qualified by the U.S. Securities and Exchange Commission, and will accept subscriptions only while such qualification—and any required state registrations, including Texas issuer-dealer and applicable agent registrations—remain effective. The Notes are offered pursuant to an Offering Circular (as supplemented from time to time, the “Offering Circular”). The Offering Circular contains detailed information about LOF’s operations, including risks, terms of the Notes, and the nature of the corresponding Borrower Loans.
In consideration of the covenants, agreements, representations, and warranties hereinafter set forth, and for other good and valuable consideration, receipt of which is hereby acknowledged, it is agreed as follows:
Subject to the terms and conditions of this Agreement, LOF will provide you the opportunity through its website and any associated websites, desktop, or mobile applications (collectively, the “Live Oak Financial websites”):
| • | To review and bid on loan listings, which are requests for loans (“Borrower Loans”) that LOF has received from its borrower members, with each bid being at least $50; provided, however, that if the remaining unfunded portion of a Borrower Loan is less than $50, a bid equal to such remaining amount (which may be less than $50) is permitted to complete funding; | |
| • | To purchase Notes from LOF in the principal amount of the bids you place on loan listings, each such Note associated with, and dependent on, a specific Borrower Loan; and | |
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To instruct LOF to apply the proceeds from the sale of each Note you purchase to facilitate the funding of a specific Borrower Loan you have designated. |
Any bid you place on a loan listing is a commitment by you to purchase a Note from LOF in the principal amount of the bid you placed on the loan listing. If the amount available for further bidding on a loan listing is less than the amount of your bid, your bid will be deemed to be in the amount still available for bidding. You must commit to purchase a Note to fund a Borrower Loan prior to the origination of that Borrower Loan. At the time you commit, you must have sufficient funds available in your linked bank account. We do not custody investor funds or maintain investor accounts, and we debit ACH only upon Acceptance.
Your subscription is an offer that may be canceled any time before Acceptance. It becomes binding only upon Acceptance (i.e., when a listing funds 100% within the applicable window and we accept your order). We do not place pre-acceptance holds or sweeps, and ACH is debited only upon Acceptance.
The Notes are not issued under an indenture. The Trust Indenture Act of 1939, as amended (the “TIA”), does not apply to the Notes because they are being offered and sold pursuant to Regulation A, Tier 2 under the Securities Act of 1933. See TIA §304(d) and 17 C.F.R. §260.4a-2. No trustee has been appointed. Rights and remedies of Note holders are as set forth in this Agreement and the Offering Circular.
Investors should be aware that the absence of an Indenture means that the rights and remedies typically provided under an Indenture, including the appointment of a trustee to act on behalf of Note holders, are not applicable to the Notes at this time.
| A. | Mechanics • the borrower member withdraws the loan request prior to funding; • bids for the entire amount of the borrower member’s loan request have been received earlier, in which case the Borrower Loan will close earlier; or • the loan request is canceled by LOF for reasons relating to the operation and integrity of the LOF websites, such as attempted fraud or a failure to verify information upon request. | |
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Payment flows; servicing; no pass-through • Borrower remittances. Borrower payments on a Borrower Loan are received by LOF (or by a third-party processor acting for LOF) as payment for goods and services provided by LOF to the borrower. Upon such receipt by LOF or its processor, the borrower’s payment obligation on that installment is deemed satisfied as to the borrower (subject to returns or reversals; if a payment is returned, the borrower remains obligated). Borrower remittances are deposited into LOF operating accounts and are not transmitted to investors. • Investor payments come from LOF. On each payment date, LOF pays Noteholders from LOF’s general funds an Amount Due that is calculated by reference to the performance of the related Reference Loan. Investors are creditors of LOF only. For clarity, ‘payment date’ means the third Business Day (T+3) after each Loan Payment Date, as defined in the Offering Circular. • No agency for holders; no “make-whole.” LOF is not the agent of any Noteholder for receipt or transmission of borrower payments and does not guarantee, advance, or “make whole” payments on the Notes, except as expressly provided in any limited repurchase or indemnification policy disclosed in the Offering Circular. • Capacity for payments. You acknowledge that (i) amounts we receive from borrowers are payments on loans we own and service, and (ii) amounts we pay to you on the Notes are our own debt payments made from our general funds. We do not accept, hold, or transmit funds as your agent or in trust for you, and we do not operate a custodial account for investor funds. • Recoupment debits. As described in the Subscription Agreement and Offering Circular, you authorize variable-amount ACH debits solely to recover over-payments; we will give written electronic notice at least ten (10) days before each debit, and no single debit will exceed the lesser of $5,000 or the applicable over-payment previously credited to you. We will originate a new debit entry for any such recoupment and will not use Nacha “Reversal” entries; your stop-payment and revocation rights apply as set forth in the Subscription Agreement. | ||
Funding of a purchase; Acceptance • When funds are pulled. No escrow or pre-acceptance holds. You authorize LOF to initiate an ACH debit from your linked bank account only upon Acceptance of your subscription for the applicable listing. • When your offer becomes binding. Your subscription is an offer that becomes binding upon Acceptance (i.e., when a listing funds 100% within the applicable offering window). If a listing does not reach 100% funding within that window, your offer is not accepted and no debit occurs. |
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• Non-issuance. If the listing on which you bid does not fund or LOF cancels the Borrower Loan, LOF will notify you and you will have no purchase obligation for that listing. |
Each Note shall have the terms and conditions described in the Offering Circular and the Note itself. The Offering Circular and form of Note are available for your review on LOF’s website. The interest rate, maturity, and other terms of the corresponding Borrower Loan will be described in the loan listing on LOF’s website and the Note executed by the borrower.
Subject to our Servicing Standard and the modification limits in the Offering Circular, we may effect Borrower Loan and related Note modifications only as permitted there (e.g., conforming/administrative updates; changes required by law), and we will provide timely investor notice and file any required offering circular supplement.
LOF will provide electronic notice to affected holders within two (2) Business Days after a material borrower-level change that affects timing or amount of payments (or, where practicable, before it takes effect), and will file an offering circular supplement within two (2) Business Days.
Transfers are subject to the restrictions described in the Offering Circular—Transfer Restrictions and Modifications.
LOF makes the following representations and warranties to you, with respect to each Note sold to you under this Agreement, as of the date the Note is sold to you:
| i. | Compliance with Laws: LOF has complied in all material respects with applicable federal, state, and local laws in connection with the offer and sale of the Note. | |
| ii. | Authorization and Binding Obligation: The Note has been duly authorized and, following payment of the purchase price by you and electronic delivery by LOF to you, will constitute a valid and binding obligation of LOF enforceable against LOF in accordance with its terms, except as the enforcement of the Note may be limited by applicable bankruptcy, insolvency, or similar laws. | |
| iii. | Use of Proceeds: The proceeds from the sale of the Note are issuer proceeds that LOF uses in its business, including loan originations. You are a creditor of LOF only; you do not fund borrowers directly. | |
Conformance with Bid: If you bid on a loan listing by browsing online through available loan listings displayed on our website, the Note sold to you will be in the principal |
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amount of the bid you placed on the loan listing and dependent for payment on the Borrower Loan identified in the loan listing. | ||
| v. | Investment Criteria: If you have used an automated tool that we offer, such as Auto Invest, to identify the Notes you are purchasing, each of those Notes conforms to the investment criteria you provided through the applicable tool or service. |
In the event of a breach by LOF of any of the representations and warranties contained in Section 4 that materially and adversely affects your interest in a Note sold to you by LOF, the following remedies apply:
| A. | Interest Breach: For a breach that materially and adversely affects your interest in a Note (“Interest Breach”), LOF shall, at its option: • Cure the Interest Breach if it is susceptible to cure; • Repurchase the Note from you; or • Indemnify and hold you harmless only to the extent, and in the circumstances, described in the Offering Circular’s Limited Repurchase and Indemnification Policy (“LRIP”) (e.g., verified identity-theft default; risk-rating error; Auto-Invest error). For the avoidance of doubt, LOF does not indemnify for ordinary credit losses or nonpayment outside the LRIP. | |
| B. | Sale Breach: For a breach involving a sale of a Note that is materially different from what you would have purchased or would not have purchased but for the breach (“Sale Breach”), LOF shall, at its option: • Cure the Sale Breach if it is susceptible to cure; • Repurchase the Note from you; or • Indemnify and hold you harmless against all losses as described above. | |
Identity Breach: If a Borrower Loan defaults materially as a direct result of verifiable identity theft (each an “Identity Breach”), LOF shall, at its option: • Cure the Identity Breach if it is susceptible to cure; • Repurchase the affected Note from you; or • Indemnify and hold you harmless against all losses, damages, expenses, legal fees, costs and judgments arising from that Identity Breach. Notwithstanding the foregoing, LOF shall have no obligation to indemnify or repurchase any Note for losses arising from fraud (other than verifiable identity theft) in connection with a loan listing, or due to any false or inaccurate statements or |
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omissions of fact in a listing (including in credit data, borrower representations, or other indicators of intent or ability to repay). | ||
| D. | Election and Notice: For events covered by the Limited Repurchase and Indemnification Policy, we will notify affected holders within three (3) Business Days after determination and will credit any repurchase/indemnity amount within ten (10) Business Days thereafter, as described in the Offering Circular. | |
| E. | Repurchase Price: If LOF repurchases a Note, the repurchase price will equal the remaining outstanding principal balance of the Note as of the date of repurchase. This amount will be remitted to the bank account linked to your LOF user account. Upon repurchase, you agree that the Note will be automatically assigned to LOF. | |
| F. | Exclusive Remedies: The remedies provided in this section are your sole protection for breaches of Section 4. |
You agree to the following:
| A. | NONDISCRIMINATION: WHEN MAKING BIDS ON LOAN LISTINGS, YOU WILL NOT DISCRIMINATE AGAINST ANY BORROWER MEMBER OR GROUP ON ANY PROHIBITED BASIS, INCLUDING RACE, COLOR, RELIGION, NATIONAL ORIGIN, SEX, MARITAL STATUS, AGE, SEXUAL ORIENTATION, MILITARY STATUS, OR THE BORROWER’S SOURCE OF INCOME. | |
| B. | NO COLLECTION ATTEMPTS: YOU AGREE THAT YOU WILL NOT, DIRECTLY OR INDIRECTLY, ATTEMPT TO COLLECT FROM BORROWERS ON YOUR NOTES OR THE CORRESPONDING BORROWER LOANS. | |
| C. | ACKNOWLEDGMENT OF RISK: YOU UNDERSTAND THAT BORROWERS MAY DEFAULT ON THEIR PAYMENT OBLIGATIONS, AND SUCH DEFAULTS WILL REDUCE OR ELIMINATE AMOUNTS YOU MAY RECEIVE ON CORRESPONDING NOTES. |
You represent and warrant the following:
| A. | Financial Suitability: You satisfy the minimum financial suitability standards applicable to your state of residence, if any, and agree to abide by any maximum investment limits described in the Offering Circular. | |
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Documentation: You will provide any additional documentation reasonably requested by us, or required by the Securities and Exchange Commission or state securities administrators, to confirm compliance with applicable standards. | ||
| C. | Risk Tolerance: You understand and accept the risks associated with investing in Notes, including the potential loss of your entire investment. | |
| D. | Investment Knowledge: You have received and reviewed the Offering Circular, understand the risks described therein, and acknowledge that there may be no secondary market for the Notes. |
You warrant and represent that:
| A. | You have the legal authority to enter into and perform your obligations under this Agreement. | |
| B. | This Agreement has been duly authorized, executed, and delivered by you. | |
| C. | You have reviewed the Offering Circular, including information about LOF and its operations. | |
| D. | Your participation complies with applicable federal, state, and local laws. | |
| E. | If you are entering this Agreement as an entity, the individual executing this Agreement on behalf of the entity is duly authorized to bind the entity, and the entity is in compliance with its own organizational documents and any applicable agreements or laws. |
You acknowledge and agree to the following:
| A. | The purchase and sale of Notes is an arms-length transaction between you and LOF. | |
| B. | LOF is not acting as your agent or fiduciary in connection with the purchase and sale of Notes. | |
| C. | LOF assumes no advisory or fiduciary responsibility toward you and has not provided any legal, accounting, regulatory, or tax advice regarding the Notes. | |
| D. | You have consulted with your own advisors to the extent you deem appropriate regarding the Notes and their associated risks. |
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LOF reserves the right to restrict your access to its platform or websites, with or without cause and with or without notice.
| A. | Personal Use: You are not authorized to use LOF to bid on loan listings or purchase Notes for anyone other than yourself. | |
| B. | Ownership of Account: You must be the owner of the deposit account you designate for fund transfers, with authority to direct transfers to or from that account. | |
| C. | Borrower Loans: If you obtain Borrower Loans through the platform, amounts in the bank account linked to your LOF user account may be set off against any delinquent amounts owed on your Borrower Loans, or against any shortfall resulting from failed transfers or deposits. |
LOF represents and warrants the following:
| A. | Organization and Authority: LOF is duly organized and validly existing as a limited liability company in good standing under the laws of Texas, with the power to enter into and perform its obligations under this Agreement. | |
| B. | Authorization: This Agreement has been duly authorized, executed, and delivered by LOF. | |
| C. | Compliance: LOF has complied in all material respects with applicable laws in connection with the issuance and sale of Notes. |
LOF makes no guarantees regarding the returns, principal, or interest you may receive on any Note.
| A. | PERFORMANCE RISK: YOUR RETURNS ARE CALCULATED BY REFERENCE TO PERFORMANCE OF THE RELATED REFERENCE LOAN, WHICH MAY REDUCE THE AMOUNT DUE (INCLUDING TO ZERO). PAYMENTS TO YOU ARE MADE BY LOF FROM ITS GENERAL FUNDS, AND YOU ALSO BEAR LOF ISSUER CREDIT RISK. NO MAKE-WHOLE OR YIELD-MAINTENANCE APPLIES. | |
| B. | NO GUARANTEES: LOF DOES NOT GUARANTEE BORROWER LOANS OR NOTES AND DOES NOT ACT AS A GUARANTOR OF ANY BORROWER PAYMENTS. |
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You agree not to engage in the following activities related to loan listings, bids, Notes, Borrower Loans, or other transactions with LOF:
| A. | Misrepresenting yourself as a director, officer, or employee of LOF. | |
| B. | Charging or attempting to charge any borrower fees for your agreement to bid on or recommend their loan listing. | |
| C. | Engaging in activities that require a license (e.g., loan brokering, credit counseling) without proper authorization. | |
| D. | Violating any applicable laws, including but not limited to fair lending laws, consumer privacy laws, or state usury statutes. | |
| E. | Transfers may occur only in compliance with applicable federal securities laws, including registration or an available exemption. We do not operate a secondary trading venue and make no assurance that any secondary market will develop. (State registration/qualification may be preempted in certain circumstances; state anti‑fraud and notice provisions continue to apply.) See Offering Circular—Transfer Restrictions and Modifications. |
The Notes are intended to be treated as indebtedness of LOF for U.S. federal income tax purposes.
| A. | Consistency in Reporting: You agree not to take any position inconsistent with this treatment for tax purposes unless required by law. | |
| B. | Original Issue Discount: The Notes are subject to the original issue discount rules of the Internal Revenue Code. You acknowledge that you are prepared to bear the risk of losing your entire investment in Notes. |
LOF reserves the right, at its sole discretion, to suspend or terminate your participation on its platform, and to terminate this Agreement, for cause, by providing notice to you (or immediately, with or without notice), where “cause” shall include, without limitation:
| A. | Any breach by you of this Agreement or any policy, rule or guideline provided by LOF, including but not limited to the Prohibited Activities set forth in Section 14; | |
| B. | Any violation of applicable federal or state law, regulation or licensing requirement (including the Securities Act of 1933 and the Trust Indenture Act of 1939); | |
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Any misrepresentation, fraud or material omission by you in connection with your use of the platform, your bids or your Notes; | ||
| D. | Any attempted or actual resale, transfer, pledge or encumbrance of any Note in violation of Section 13E (Transfers); or | |
| E. | Any conduct that, in LOF’s reasonable judgment, is harmful to LOF, its reputation, its platform, other users, or the integrity of the offering. |
Upon termination for cause under this Section 15, you will immediately cease all use of the platform. Any Notes you purchase prior to termination shall remain in full force and effect according to their terms.
You agree to indemnify, defend, and hold harmless LOF, its affiliates, and their respective officers, directors, employees, and agents (collectively, the “Live Oak Financial Parties”) against all claims, losses, and liabilities arising from:
| A. | Your material breach of this Agreement; | |
| B. | Your actions or omissions in connection with LOF; or | |
| C. | Third-party claims related to your use of the LOF platform. |
LOF reserves the right to modify any term or provision of this Agreement. Material changes will be communicated to you via email or posted on the platform.
| A. | To You: LOF will communicate with you via email or through postings on its website. Ensure your contact information is up to date. | |
| B. | To LOF: Send notices via email to contact@live-oak-financial.com or by mail to Live Oak Financial LLC, Compliance Department, 3520 Alpine Autumn Dr., Austin, Texas 78744. |
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, NO PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES TO THE OTHER PARTIES, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
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| A. | IN NO EVENT SHALL ANY PARTY BE LIABLE TO ANOTHER PARTY FOR ANY LOST PROFITS OR SPECIAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES, EVEN IF INFORMED OF THE POSSIBILITY OF SUCH DAMAGES. FURTHERMORE, NO PARTY MAKES ANY REPRESENTATION OR WARRANTY TO THE OTHER PARTIES REGARDING THE EFFECT THAT THE AGREEMENT MAY HAVE UPON THE FOREIGN, FEDERAL, STATE OR LOCAL TAX LIABILITY OF THE OTHER. | |
| B. | AS A SMALL BUSINESS ISSUER UNDER THE TEXAS SECURITIES ACT, LOF IS SUBJECT TO CERTAIN STATUTORY LIMITATIONS OF LIABILITY PURSUANT TO TEXAS SECURITIES ACT §4008.061. THESE LIMITATIONS MAY FURTHER REDUCE YOUR REMEDIES OR DAMAGES IN CONNECTION WITH THIS AGREEMENT OR YOUR PURCHASE OF BORROWER PAYMENT DEPENDENT NOTES. BY EXECUTING THIS AGREEMENT, YOU ACKNOWLEDGE AND AGREE TO THESE LIMITATIONS OF LIABILITY. |
Investor hereby acknowledges that LOF has provided the separate written disclosure of the limitation of liability required by Texas Securities Act §4008.061, and that Investor’s signature below constitutes written acknowledgment of receipt of that disclosure.
Except as otherwise expressly provided herein, this Agreement represents the entire agreement between you and LOF regarding the subject matter hereof and supersedes any prior investor or lender registration agreement between you and Live Oak as well as all prior or contemporaneous communications, promises and proposals, whether oral, written or electronic, between us.
| A. | This Agreement is governed by Texas law. | |
| B. | Failure to enforce any term does not constitute a waiver of that term. | |
| C. | Invalid provisions will be replaced by enforceable provisions that closely match the original intent. |
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To resolve any ambiguity, this Section 22 does not in any way affect any party’s ability to bring an action against LOF, or their respective officers and directors, under the federal securities laws.
| A. | In this Resolution of Disputes provision: • I, “me” and “my” mean the person entering into this Agreement, as well as any second person claiming through such first person; • You and “your” mean Live Oak Financial LLC and its parent, subsidiaries, affiliates, predecessors, successors, and assigns, as well as their officers, directors, and employees; • Claim means any dispute, claim, or controversy (whether based on contract, tort, intentional tort, constitution, statute, ordinance, common law, or equity, whether pre-existing, present, or future, and whether seeking monetary, injunctive, declaratory, or any other relief) arising from or relating to this Agreement or the relationship between you and me (including claims arising prior to or after the date of the Agreement, and claims that are currently the subject of purported class action litigation in which you are not a member of a certified class), and includes claims that are brought as counterclaims, cross claims, third party claims or otherwise, as well as disputes about the validity or enforceability of this Agreement or the validity or enforceability of this Section 23. | |
| B. | Any Claim may be resolved, upon the election of both you and me, by binding arbitration administered by the American Arbitration Association or JAMS, under the applicable arbitration rules of the administrator in effect at the time a Claim is filed (“Rules”). Any arbitration under this Agreement will only take place with respect to a single person; class arbitrations and class actions are not permitted. If I file a claim, I may choose the administrator; if you file a claim, you may choose the administrator, but you agree to change to another permitted administrator at my request (assuming that the other administrator is available). I can obtain the Rules and other information about initiating arbitration by contacting the American Arbitration Association at 1633 Broadway, 10th Floor, New York, NY 10019, (800) 778-7879, www.adr.org; or by contacting JAMS at 1920 Main Street, Suite 300, Irvine, CA 92614, (949) 224-1810, www.jamsadr.com. Your address for serving any arbitration demand or claim is Live Oak Financial LLC, 3520 Alpine Autumn Dr, Austin, TX 78744, Attention: Compliance. | |
| C. | Claims submitted for arbitration will be arbitrated by a single, neutral arbitrator, who shall be a retired judge or a lawyer with at least ten years’ experience. | |
You will pay all filing and administration fees charged by the administrator and arbitrator fees up to $1,000, and you will consider my request to pay any additional |
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arbitration costs. If an arbitrator issues an award in your favor, I will not be required to reimburse you for any fees you have previously paid to the administrator or for which you are responsible. If I receive an award from the arbitrator, you will reimburse me for any fees paid by me to the administrator or arbitrator. Each party shall bear its own attorney’s, expert’s and witness fees, which shall not be considered costs of arbitration; however, if a statute gives me the right to recover these fees, or fees paid to the administrator or arbitrator, then these statutory rights will apply in arbitration. | ||
| E. | Any in-person arbitration hearing will be held in the city with the federal district court closest to my residence, or in such other location as you and I may mutually agree. The arbitrator shall apply applicable substantive law consistent with the Federal Arbitration Act, 9 U.S.C. § 1-16, and, if requested by either party, provide written reasoned findings of fact and conclusions of law. The arbitrator shall have the power to award any relief authorized under applicable law. Any appropriate court may enter judgment upon the arbitrator’s award. The arbitrator’s decision will be final and binding except that: (i) any party may exercise any appeal right under the FAA; and (ii) any party may appeal any award relating to a claim for more than $100,000 to a three-arbitrator panel appointed by the administrator, which will reconsider de novo any aspect of the appealed award. The panel’s decision will be final and binding, except for any appeal right under the FAA. Unless applicable law provides otherwise, the appealing party will pay the appeal’s cost, regardless of its outcome. However, you will consider any reasonable written request by me for you to bear the cost. | |
| F. | YOU AND I AGREE THAT EACH MAY BRING ARBITRATION CLAIMS AGAINST THE OTHER ONLY IN OUR CAPACITY AS A SINGLE PERSON, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING. Further, unless both you and I agree otherwise in writing, the arbitrator may not consolidate more than one person’s claims. The arbitrator shall have no power to arbitrate any Claims on a class action basis or Claims brought in a purported representative capacity on behalf of the general public, other investors, or other persons similarly situated. The validity and effect of this paragraph f shall be determined exclusively by a court, and not by the administrator or any arbitrator. | |
| G. | If any portion of this Section 24 is deemed invalid or unenforceable for any reason, it shall not invalidate the remaining portions of this section. However, if paragraph f of this Section 24 is deemed invalid or unenforceable in whole or in part, then this entire Section 24 shall be deemed invalid and unenforceable. The terms of this Section 24 will prevail if there is any conflict between the Rules and this section. | |
You and I acknowledge and agree that the arbitration agreement set forth in this Section 24 is made pursuant to a transaction involving interstate commerce, and thus |
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the Federal Arbitration Act shall govern the interpretation and enforcement of this Section 24. This Section 24 shall survive the termination of this Agreement. |
When you give us your home, mobile, work and/or other phone number, we have your permission to contact you at that number or numbers, and any other number we believe we may reach you through (unless prohibited by applicable law), about your LOF accounts. Your consent allows us to use text messaging, artificial or prerecorded voice messages and automatic dialing technology, for all purposes not prohibited by applicable law. Message and data rates may apply. You may contact us anytime to change these preferences. We may also send an email to any address where we reasonably believe we can contact you. Some of the purposes for calls and messages include: obtaining information; transactions on or servicing of your account; and collecting on your account. Our rights under this Section extend to our affiliates, subsidiaries, parents, agents and vendors. Notify us immediately of any changes to your contact information by changing your contact information on your LOF account information – settings page.
By placing any bid or order, Investor agrees to receive, execute, and retain the Subscription Agreement electronically under the E-Sign Act. Investor’s electronic signature, checkbox selections, and date/time stamp constitute a binding subscription.
Investor acknowledges and agrees that the Notes are not issued pursuant to any trust indenture (including under the Trust Indenture Act of 1939), and that no trustee has been appointed to act on behalf of investors with respect to the Notes. As a result:
| A. | Investor will hold the Notes as an unsecured creditor of LOF, with no trustee to enforce or coordinate the rights of Noteholders in the event of default or acceleration; | |
| B. | Investor will not benefit from the procedural protections or remedies (e.g., trustee-led enforcement, pooling of claims, asset segregation) that a trust indenture typically provides; and | |
| C. | Investor therefore assumes the additional risks of potential delays, increased costs, and difficulty in enforcing the terms of the Notes or in pursuing collective remedies. | |
| D. | Investor has considered and accepts these risks in making its investment. |
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In order to purchase Borrower-Payment-Dependent Notes (“Notes”) under the Offering Circular dated 07/15/2025, Investor must execute a separate Subscription Agreement. The Subscription Agreement sets forth the principal amount of Notes to be purchased (minimum $50; in $0.01 increments; we may issue a single residual Note under $50 solely to round funding), the purchase price ($1 per $1 principal), the required investor representations under Rule 251(d)(2), and an acknowledgment that each subscription is irrevocable upon acceptance by the Issuer. Auto‑Invest orders remain cancelable until Acceptance. We do not custody investor funds or maintain investor accounts; subscription amounts are paid directly to LOF (as issuer) after Acceptance and ACH settlement.
By placing any bid or order for Notes through the Issuer’s platform, Investor agrees that (a) it will be presented with the Subscription Agreement for execution at or before the time its bid is accepted, and (b) it will enter into (i.e. check the applicable representation boxes and sign/date) that Subscription Agreement as a condition to Issuer’s acceptance of the bid.
If Investor has enabled the “Auto Invest” feature on their LOF user account, Investor authorizes the Issuer to automatically execute and deliver the Subscription Agreement on Investor’s behalf for each Note purchased through Auto Invest, provided such Notes meet the investment criteria and do not cause Investor to exceed its self-set maximum investment amount; Investor further acknowledges that each such automated execution constitutes an irrevocable subscription upon acceptance.
Investor authorizes the Issuer to execute subsequent purchases (including auto-invest) under these same terms, each constituting an irrevocable subscription upon acceptance.
| A. | Small Business Issuer Definition. Investor acknowledges that LOF is a “small business issuer” under Texas Securities Act § 4008.061, meaning at the time of this offering LOF: • Has annual gross revenues not exceeding $25 million; and • Does not have a class of equity securities registered (or required to be registered) with the SEC under Section 12 of the Securities Exchange Act of 1934. | |
| B. | Applicability. Investor further acknowledges that this limitation applies because: • The aggregate amount of securities offered does not exceed $5 million; and • LOF, as the issuer, is engaged in this offering. | |
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Limitation of Liability. Investor understands and agrees that, in any action or series of actions under the Texas Securities Act relating to this offering, the maximum recovery against LOF (or any person providing services in connection with the offering) is limited to three times the fee paid by LOF to that person for services related to the offering, unless a trier of fact finds that person engaged in intentional wrongdoing in providing those services. | ||
| D. | Disclosure & Acknowledgment. Investor acknowledges receipt of the written disclosure of this limitation of liability in this Agreement, and by signing below confirms that LOF has satisfied its obligation under Texas Securities Act § 4008.061 to (i) provide this disclosure in writing and (ii) obtain Investor’s signed acknowledgment of receipt. |
The Investor, undersigned, has considered and accepts these risks in making its investment. Nothing in the foregoing acknowledgment shall modify, limit, or supersede any of the provisions of this Agreement, all of which remain in full force and effect.
Signature | Date | |
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Last Updated: September 10, 2025
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Limited Liability Company Agreement of Live Oak Financial
A Single Member Limited Liability Company
This Operating Agreement (“Agreement”) of Live Oak Financial, (“Company”), is executed and agreed to, for good and valuable consideration, by the undersigned members (individually, “Member” or collectively, “Members”).
Formation.
(a) State of Formation. This Agreement is for Live Oak Financial, a member-managed Texas limited liability company formed under and pursuant to Texas law.
(b) Operating Agreement Controls. To the extent that the rights or obligations of the Members, or the Company under provisions of this Agreement differ from what they would be under Texas law absent such a provision, this Agreement, to the extent permitted under Texas law, shall control.
(c) Principal Office. The Company’s principal office will be as set out in the Company’s Articles of Organization or other filing on record with the Secretary of State, or such other location as shall be selected from time to time by the Members.
(d) Registered Agent and Office. The name of the Company’s registered agent for service of process and the address of the Company’s registered office will be as specified in the Company’s Articles of Organization or any subsequent filings with the Secretary of State. If this information changes, the Company will promptly file a statement of change with the Secretary of State according to applicable law.
(e) No State Law Partnership. No provisions of this Agreement shall be deemed or construed to constitute a partnership (including, without limitation, a limited partnership) or joint venture, or any Member a partner or joint venturer of or with any other Member, for any purposes other than federal and state tax purposes.
Purposes and Powers.
(a) Purpose. The Company is created for the following business purpose:
Live Oak Financial LLC will operate as a peer to peer lending service through originating consumer loans to borrowers through the issuance of borrower payment dependent notes to lenders.
(b) Powers. The Company shall have all of the powers of a limited liability company set forth under Texas law.
(c) Duration. The Company’s term shall commence upon the filing of an articles of organization and all other such necessary materials with Texas. The Company will operate until terminated as outlined in this Agreement unless:
(i) The Member votes to dissolve the Company;
(ii) No Member of the Company exists unless the business of the Company is continued in a manner permitted by Texas law;
(iii) It becomes unlawful for any Member or the Company to continue in business;
(iv) A judicial decree is entered that dissolves the Company; or
(v) Any other event results in the dissolution of the Company under federal or Texas law.
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Member.
(a) Member. The sole member of Live Oak Financial at the time of adoption of this Agreement is Erik Randall (“Member”).
(b) Initial Contribution. The Member shall make an initial contribution to the Company. The initial contributions shall be as described in Attachment A, “Initial Contributions of the Member.”
No Member shall be entitled to interest on their initial contribution. Except as expressly provided by this Agreement, or as required by law, no Member shall have any right to demand or receive the return of their initial contribution.
(c) Limited Liability of the Member. Except as otherwise provided for in this Agreement or otherwise required by Texas law, no Member shall be personally liable for any acts, debts, liabilities, or obligations of the Company beyond their respective initial contribution. The Member shall look solely to the Company property for the return of their initial contribution, or value thereof, and if the Company property remaining after payment or discharge of the debts, liabilities, or obligations of the Company is insufficient to return such initial contributions or value thereof, no Member shall have any recourse against any other Member, if any other Member exists, except as is expressly provided for by this Agreement.
(d) Creation or Substitution of New Members. Any Member may assign in whole or in part its membership interest only with the prior written consent of all Members.
(i) Entire Transfer. If a Member transfers all of its membership interest, the transferee shall be admitted to the Company as a substitute Member upon its execution of an instrument signifying its Agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately upon the transfer, and, simultaneously, the transferor Member shall cease to be a Member of the Company and shall have no further rights or obligations under this Agreement.
(ii) Partial Transfer. If a Member transfers only a portion of its membership interest, the transferee shall be admitted to the Company as an additional Member upon its execution of an instrument signifying its Agreement to be bound by the terms and conditions of this Agreement.
(iii) Whether a substitute Member or an additional Member, absent the written consent of all existing Members of the Company, the transferee shall be a limited Member and possess only the percentage of the monetary rights of the transferor Member that was transferred without any voting power as a Member in the Company.
Member Voting.
(a) Voting Power. In the event that the Company has multiple Members simultaneously, the Company’s Members shall each have voting power equal to its share of membership interest in the Company.
Accounting and Distributions.
(a) Fiscal Year. The Company’s fiscal year shall end on the last day of December.
(c) Distributions. Distributions shall be issued, as directed by the Company’s Treasurer or Assistant Treasurer, on a monthly basis, based upon the Company’s fiscal year. The distribution shall not exceed the remaining net cash of the Company after making appropriate provisions for the Company’s ongoing and anticipatable liabilities and expenses. Each Member shall receive a percentage of the overall distribution that matches that Member’s percentage of membership interest in the Company.
Tax Treatment Election.
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(c) Tax Designation. The Company has not filed with the Internal Revenue Service for treatment as a corporation. Instead, the Company will be taxed as a pass-through organization. The Member may elect for the Company to be treated as a C-Corporation or an S-Corporation at any time.
Officers.
(a) Appointment and Titles of Officers. The officers of the Company shall be appointed by the Member and shall consist of at least a Chairman, a Secretary, and a Treasurer. The Member may also choose one or more President, Vice-President, Assistant Secretaries, and Assistant Treasurers. Any number of offices may be held by the same person, as permitted by Texas law. The Member may appoint such other officers and agents as the Member shall deem necessary or advisable who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Member. The officers and agents of the Company shall hold office until their successors are chosen and qualified. Any officer appointed by the Member may be removed at any time, with or without cause, by the Member, or if there are multiple Members, an affirmative vote of a majority of the Members. Any vacancy occurring in any office of the Company shall be filled by the Member. Unless the Member decides otherwise, if the title of an officer is one commonly used for officers of a limited liability company formed under Texas law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office.
(i) Chairman. The Chairman shall be the chief executive officer of the Company, shall be responsible for the general and active management of the business of the Company, and shall see that all orders and resolutions of the Members are carried into effect. The Chairman shall execute all contracts on behalf of the Company, except:
1. Where required or permitted by law or this Agreement to be otherwise signed and executed;
2.Where signing and execution thereof shall be expressly delegated by the Member to some other officer or agent of the Company.
(ii) President. In the absence of the Chairman or in the event of the Chairman’s inability to act, the President shall perform the duties of the Chairman, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Chairman. The President shall perform such other duties and have such other powers as the Member may from time to time prescribe.
(iii) Vice-Presidents. In the absence of the Chairman and President or in the event of their inability to act, any Vice-Presidents in the order designated by the Member (or, in the absence of any designation, in the order of their appointment by the Member) shall perform the duties of the Chairman, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Chairman. Vice-Presidents, if any, shall perform such other duties and have such other powers as the Member may from time to time prescribe.
(iv) Secretary and Assistant Secretary. The Secretary shall be responsible for filing legal documents and maintaining records for the Company. The Secretary shall attend and record all the proceedings of the meetings of the Company and of the Member in a book to be kept for that purpose. The Secretary shall perform such other duties as may be prescribed by the Member or the Chairman, under whose supervision the Secretary shall serve. The Secretary shall cause to be prepared such reports and/or information as the Company is required to prepare by applicable law, other than financial reports. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Member (or if there be no such determination, then in order of their appointment by the Member), shall, in the absence of the Secretary or in the event of the Secretary’s inability to act, perform the
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duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Member may from time to time prescribe.
(v) Treasurer and Assistant Treasurer. The Treasurer shall have the custody of the Company funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company according to generally accepted accounting practices, using a fiscal year ending on the last day of the month of December. The Treasurer shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Member. The Treasurer shall distribute the Company’s profits to the Member. The Treasurer shall disburse the funds of the Company as may be ordered by the Member and shall render to the Chairman and to the Member, at regular intervals or when the Member so requires, an account of all of the Treasurer’s transactions and of the financial condition of the Company. As soon as practicable after the end of each fiscal year of the Company, the Treasurer shall prepare a statement of financial condition as of the last day of the Company’s fiscal year, and a statement of income and expenses for the fiscal year then ended, together with supporting schedules. Each of said annual statements shall be prepared on an income tax basis and delivered to the Member forthwith upon its preparation. In addition, the Treasurer shall keep all financial records required to be kept pursuant to Texas law. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Member (or if there be no such determination, then in the order of their appointment), shall, in the absence of the Treasurer or in the event of the Treasurer’s inability to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Member may from time to time prescribe.
(b) Officers as Agents. The officers, to the extent of their powers set forth in this Agreement or otherwise vested in them by action of the Member not inconsistent with this Agreement, are agents of the Company for the purpose of the Company’s business, and the actions of the officers taken in accordance with such powers shall bind the Company.
(c) Fiduciary Duties of the Officers.
(i) Loyalty and Care. Except to the extent otherwise provided herein, each officer shall have a fiduciary duty of loyalty and care similar to that of officers of limited liability companies organized under the laws of Texas.
(ii) Competition with the Company. The officers shall refrain from dealing with the Company in the conduct of the Company’s business as or on behalf of a party having an interest adverse to the Company. Officers shall also refrain from competing with the Company in the conduct of the Company’s business.
(iii) Duties Only to the Company. Officers’ fiduciary duties of loyalty and care are to the Company and not to any future Members or officers. Officers shall owe fiduciary duties of disclosure, good faith, and fair dealing to the Company, but shall owe no such duties to future Members. An officer who so performs their duties shall not have any liability by reason of being or having been an officer.
(iv) Reliance on Reports. In discharging their duties, officers are entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:
| 1. | • One or more Members, officers, or employees of the Company whom the officer reasonably believes to be reliable and competent in the matters presented. • Legal counsel, public accountants, or other persons as to matters the officer reasonably believes are within the person’s professional or expert competence. • A committee of Members of which the affected officer is not a participant, if the officer reasonably believes the committee merits confidence. |
Dissolution.
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(a) Limits on Dissolution. The Company shall have a perpetual existence and shall be dissolved, and its affairs shall be wound up only upon the provisions established in this Agreement. Notwithstanding any other provision of this Agreement, the bankruptcy of any Member shall not cause such Member to cease to be a Member of the Company. Upon the occurrence of such an event, the business of the Company shall continue without dissolution.
Each Member waives any right that it may have to agree in writing to dissolve the Company upon the bankruptcy of any Member or the occurrence of any event that causes any Member to cease to be a Member of the Company.
(b) Winding Up. Upon the occurrence of any event specified in the earlier “Duration” section above, the Company shall continue solely for the purpose of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors. The Member, or in the event of multiple Members, one or more Members selected by the remaining Members, shall be responsible for overseeing the winding up and liquidation of the Company. The responsible Members shall take full account of the liabilities of the Company and its assets, shall either cause its assets to be distributed as provided under this Agreement or sold, and if sold, as promptly as is consistent with obtaining the fair market value thereof, shall cause the proceeds therefrom, to the extent sufficient, to be applied and distributed as provided under this Agreement.
(c) Distributions in Kind. Any non-cash asset distributed to one or more Members in liquidation of the Company shall first be valued at its fair market value (net of any liability secured by such asset that such Member assumes or takes subject to) to determine the profits or losses that would have resulted if such asset were sold for such value. Such profit or loss shall then be allocated as provided under this Agreement. The fair market value of such asset shall be determined by the Members or, if any Member objects, by an independent appraiser (any such appraiser must be recognized as an expert in valuing the type of asset involved) approved by the Members.
(d) Termination. The Company shall terminate when:
(i) All of the assets of the Company, after payment of or due provision for all debts, liabilities, and obligations of the Company, shall have been distributed to the Member in the manner provided for under this Agreement; and
(ii) The Company’s registration with Texas shall have been canceled in the manner required by Texas law.
(e) Accounting. Within a reasonable time after complete liquidation, the Company Treasurer shall furnish the Members with a statement which shall set forth the assets and liabilities of the Company as at the date of dissolution and the proceeds and expenses of the disposition thereof.
(f) Limitations on Payments Made in Dissolution. Except as otherwise specifically provided in this Agreement, each Member shall only be entitled to look solely to the assets of the Company for the return of its initial contribution and shall have no recourse for its initial contribution and/or share of profits (upon dissolution or otherwise) against any other Member, if any other such Member exists.
(g) Notice to Texas Authorities. Upon the winding up of the Company, the Member with the highest percentage of membership interest in the Company shall be responsible for the filing of all appropriate notices of dissolution with Texas and any other appropriate state or federal authorities or agencies as may be required by law.
Exculpation and Indemnification.
(a) No Member, officer, employee, or agent of the Company and no employee, agent, or affiliate of a Member (collectively, “Covered Person”) shall be liable to the Company or any other person who has an interest in or claim against the Company for any loss, damage, or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company
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and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage, or claim incurred by reason of such Covered Person’s gross negligence or willful misconduct.
(b) To the fullest extent permitted by applicable law, a Covered Person shall be entitled to indemnification from the Company for any loss, damage, or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement. Expenses, including legal fees, incurred by a Covered Person defending any claim, demand, action, suit or proceeding shall be paid by the Company. The Covered Person shall be liable to repay such amount if it is determined that the Covered Person is not entitled to be indemnified as authorized in this Agreement.
No Covered Person shall be entitled to be indemnified in respect of any loss, damage, or claim incurred by such Covered Person by reason of such Covered Person’s gross negligence or willful misconduct with respect to such acts or omissions unless such Covered Person is a Member of the Company, who shall have full indemnity against gross negligence or willful misconduct. Any indemnity under this Agreement shall be provided out of and to the extent of Company assets only.
(c) A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports, or statements presented to the Company by any person as to matters the Covered Person reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports, or statements as to the value and amount of the assets, liabilities, or any other facts pertinent to the existence and amount of assets from which distributions to the Member might properly be paid.
(d) To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Company or to any other Covered Person, a Covered Person acting under this Agreement shall not be liable to the Company or to any other Covered Person for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the Member to replace such other duties and liabilities of such Covered Person.
(e) The foregoing provisions of this article shall survive any termination of this Agreement.
Insurance.
The Company shall have the power to purchase and maintain insurance, including insurance on behalf of any Covered Person against any liability asserted against such person and incurred by such Covered Person in any such capacity, or arising out of such Covered Person’s status as an agent of the Company, whether or not the Company would have the power to indemnify such person against such liability under the applicable law provision.
General Provisions.
(a) Notices. All notices, offers, or other communications required or permitted to be given pursuant to this Agreement shall be in writing and may be personally served or sent by United States mail and shall be deemed to have been given when delivered in person or three business days after deposit in United States mail, registered or certified, postage prepaid, and properly addressed, by or to the appropriate party.
(b) Number of Days. In computing the number of days (other than business days) for purposes of this Agreement, all days shall be counted, including Saturdays, Sundays, and holidays; provided, however, that if the final day of any time period falls on a Saturday, Sunday, or holiday on which national banks
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are or may elect to be closed, then the final day shall be deemed to be the next day which is not a Saturday, Sunday, or such holiday.
(c) Execution of Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which shall together constitute one and the same instrument.
(d) Severability. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.
(e) Headings. The article and section headings in this Agreement are for convenience, and they form no part of this Agreement and shall not affect its interpretation.
(f) Controlling Law. This Agreement shall be governed by and construed in all respects in accordance with the laws of Texas (without regard to conflicts of law principles thereof).
(g) Application of State Law. Any matter not specifically covered by a provision of this Agreement shall be governed by the applicable provisions of Texas law.
(h) Amendment. This Agreement may be amended only by written consent of the Member. Upon obtaining the approval of any such amendment, supplement, or restatement as to the Certificate, the Company shall cause a Certificate of Amendment or Amended and Restated Certificate to be prepared, executed, and filed in accordance with Texas law.
(i) Entire Agreement. This Agreement contains the entire understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings, inducements, or conditions, express or implied, oral or written, except as herein contained.
IN WITNESS WHEREOF, the Member has executed and agreed to this Limited Liability Company Operating Agreement, which shall be effective as of June 13, 2024.
By: | /s/ Erik Randall | Date: | 06-13-2024 |
Erik Randall, Sole Member and Chairman |
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Attachment A
Initial Contributions of the Member
The initial contributions of the Member of Live Oak Financial are as follows:
• Erik Randall
• Contribution:
• Cash: $500.00
• Server Equipment valued at $35.00
• Web Domain valued at $8.00
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FIRST AMENDMENT TO THE OPERATING AGREEMENT
Of Live Oak Financial LLC, a Texas Limited Liability Company
This First Amendment (this “Amendment”) to the Operating Agreement of Live Oak Financial LLC, LLC (the “Company”) is made and entered into as of March 01, 2025, by the undersigned, being the sole Member of the Company.
Recitals
| A. | The Company and Member entered into that certain Operating Agreement dated June 13, 2024 (the “Operating Agreement”). | |
| B. | The Member now wishes to amend the Operating Agreement as set forth below. |
Amendment
Notwithstanding anything to the contrary herein, the Member is hereby authorized, without further approval of any Person, to make additional capital contributions to, and to receive distributions from, the Company at such times, in such amounts and on such terms as the Member, in his or her sole discretion, may determine, and the Company shall credit or debit the Member’s capital account accordingly.
Effectiveness
This Amendment shall become effective as of June 13, 2024 by the Member and shall be deemed part of the Operating Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date first above written.
By: | /s/Erik Randall | Date: | 03-01-2025 |
Erik Randall, Managing Member |
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SECOND AMENDMENT TO THE OPERATING AGREEMENT
Of Live Oak Financial LLC, a Texas Limited Liability Company
This Second Amendment (this “Amendment”) to the Operating Agreement of Live Oak Financial LLC, LLC (the “Company”) is made and entered into as of May 11, 2025, by the undersigned, being the sole Member of the Company.
Recitals
| A. | The Company and Member entered into that certain Operating Agreement dated June 13, 2024 (the “Operating Agreement”). | |
| B. | The Member now wishes to amend the Operating Agreement as set forth below. |
Amendment
Effective as of May 11, 2025, the Operating Agreement of Live Oak Financial LLC is hereby amended by inserting the following as a new Section:
Limitation on Additional Indebtedness
| (a) | Subordination. Any additional indebtedness incurred by the Company (“New Debt”) shall be junior and subordinate in right of payment to all Borrower-Payment-Dependent Notes issued by the Company. | |
| (b) | Fixed-Charge Coverage Test. The Company may incur, assume, guarantee or otherwise become liable for New Debt for primary business purposes only if, after giving effect to such New Debt on a pro forma basis, the Company’s Fixed-Charge Coverage Ratio (“FCCR”) for the most recent trailing twelve-month period would be at least 1.0. | |
| (c) | Calculation of FCCR. • “Fixed-Charge Coverage Ratio” or “FCCR” means, for any period, the ratio of: |
| • | • Numerator: EBITDA for such period, less cash taxes paid during such period; to • Denominator: the sum of (A) cash interest expense incurred during such period, plus (B) scheduled principal payments on all debt outstanding during such period. |
| (i) | • EBITDA” means net income (loss) plus interest expense, income taxes, depreciation and amortization, each determined in accordance with GAAP. |
| (a) | Certificate of Compliance. Before incurring any New Debt, the Manager shall deliver to the Members a certificate, signed by the Company’s Chief Financial Officer (or Treasurer), certifying that, on a pro forma basis after giving effect to the proposed New Debt, the Company’s FCCR would be no less than 1.0. | |
| (b) | Survival. This Section shall survive the issuance of any New Debt and may be enforced by any Member or Noteholder as if set forth in the original Operating Agreement. |
This covenant shall survive the issuance of any New Debt and shall be enforceable by any Member or Noteholder as if originally set forth in the Operating Agreement.
Effectiveness
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All other provisions of the Operating Agreement remain in full force and effect. This Amendment shall become effective as of May 11, 2025 by the Member and shall be deemed part of the Operating Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date first above written.
By: | /s/ Erik Randall | Date: | 05-11-2025 |
Erik Randall, Managing Member |
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