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Proposal to Approve Mortgage Agreement - 4318 Clybourne Ave, Cleveland, OH 44109.docx

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Organizational Resolution of the Members of Lofty Holding 4318 Clybourne Avenue DAO LLC To Approve Refinance or Mortgage Agreement Subject Property: 4318 Clybourne Ave, Cleveland, OH 44109 Background The Property at 4318 Clybourne Ave has faced significant obstacles to transition and rental operations due to unauthorized activities by the occupant, Calixte Duffaut (representing Yhome Nursing LLC), including withheld rents. These issues have delayed financial recovery for DAO investors. The Buyer

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Organizational Resolution of the Members of Lofty Holding 4318 Clybourne Avenue DAO LLC To Approve Refinance or Mortgage Agreement Subject Property: 4318 Clybourne Ave, Cleveland, OH 44109 Background The Property at 4318 Clybourne Ave has faced significant obstacles to transition and rental operations due to unauthorized activities by the occupant, Calixte Duffaut (representing Yhome Nursing LLC), including withheld rents. These issues have delayed financial recovery for DAO investors. The Buyer has expressed interest in signing a mortgage for the DAO’s equity to resolve these challenges and regain control of the Property. Cal’s Misleading Claims 5% “Relaunch Fee” : Cal requested a 5% fee on the appraised value, citing “YM protocol” or a “newer vote.” Loan Fees : He requested unspecified “loan fees.” Interest Claim : He demanded 6% interest on $8,901.89 allegedly fronted for three months. Refinance Amount : Claimed proceeds were $117,312.19 , not $129,350. Loan Payment Reserve : Stated funds must be held to pay the loan, citing a vote to reserve one year of payments. DAO Position & Resolution Relaunch Fee Rejected : The DAO rejected the 5% fee as it was not part of any agreement or approved vote. Loan Fees Limited : Only documented origination costs will be honored. Loan Paydown : Cal will use refinance proceeds to pay down approx. $105,000 toward the loan. This is the net due to the DAO after allowable fees and deposits. Loan Payments Withheld : Based on the Jan 29, 2024 governance vote , Cal may withhold 8 months of loan payments ($1,483.07/month) to protect his guarantor status until refinance is finalized. Proof of Payment Required : Cal must provide a mortgage statement or payoff statement as evidence of the loan paydown. Fees & Interest Reconciliation : The DAO approved only: $84.31 for 6% interest on $5,620.55 (three months), $792 for 10% OPEX on general maintenance. Refinance & Deed Transfer : Upon successful refinance and loan payoff, the deed will transfer and Cal’s name will be removed as guarantor . Property Overview – Exterior & Structural Conditions Wood Siding : Requires treatment and protective sealant. Front Porch : Crooked stairs; upper landing floor bowing and in need of reinforcement. Vegetation on Power Lines : Tree growth pressing against rear power line—urgent trimming required. Rear Deck : Slippery, moss-covered steps need cleaning, painting, and treatment. Walkway : Uneven with a 2-inch raised section—trip hazard. Rear Gutters : Improperly pitched, limiting drainage effectiveness. Roof Shingles : Extend beyond drip edge, reducing effectiveness. Vine Growth : Encroaching on rear of building, potential long-term structural damage. Overall Assessment Despite several deferred maintenance and safety issues, 4318 Clybourne Ave remains one of the best-looking and performing properties in the portfolio. However, investors should note: Exterior repairs and vegetation control are necessary to prevent utility and structural risks. Security upgrades (door lock replacement) are needed to reduce liability. Investor Protection Priority : The DAO has rejected unauthorized fees , limited reimbursements to documented costs, and mandated loan paydown with proof . Property remains a strong performer but requires targeted exterior/security improvements and deed resolution. Proposed Actions Earl Vanze Co has agreed to represent the DAO ownership group as the “ Authorized Representative ” with fiduciary duties to support the DAO’s goal of effective property oversight and financial transparency, contingent on approval and funding of a sufficient capital call. The Authorized Representative is granted full managerial authority to sign agreements and legal documents on behalf of the DAO. The Management Fee for this service is a fixed amount of $4,000 (median market rate of 1.5% of the asset value), payable as 50% ($2,000) upon funding of the capital call, and 50% ($2,000) upon collection of the first payment from the Buyer. The term of the Management Agreement is perpetual until the DAO is formally terminated , or upon super majority vote of the Members of the DAO to remove the Authorized Representative , whichever is sooner. Capital Call: Approve a $5,000 capital call as a loan with a 30-year amortization and 3-year balloon at 18% interest compounded annually to fund expenses, including title attorney, recording fees for both the capital call loan and mortgage lien, Management Fee, and outside consultant fees. Lien-rights to capital call investors will be paid immediately upon balloon payment for the remaining equity. Option 1 : DAO-led Refinance The DAO will refinance the property directly. Under this option: - The DAO will refinance the property through a DSCR loan. - Calixte Duffaut’s misleading claims were reviewed by the DAO. The DAO rejected the 5% “relaunch fee” and denied any loan fees beyond documented origination costs. - Refinance proceeds will be used to pay down approx. $105,000 of the loan. - Cal may withhold 8 months of loan payments (PITI of $1,483.07/month) based on the January 29, 2024 governance vote to protect his guarantor status until refinance is complete. - Proof of loan paydown must be provided through a mortgage statement or payoff statement. - Approved DAO expenses include $84.31 for interest on $5,620.55 fronted for three months and $792 for 10% OPEX on maintenance. - Once the refinance and loan payoff are complete, the deed will transfer, and Cal’s name will be removed as guarantor. Rationale: This option keeps the property under DAO control, enforces financial accountability, and ensures all refinance proceeds are applied transparently to pay down debt obligations and protect investor equity. Option 2: Mortgage Agreement As an alternative, the DAO will authorize a mortgage agreement for the Buyer to purchase the DAO’s equity across 4,819 floating equity shares via a mortgage lien. The agreement will include: - An initial lump sum payment of three months up front to cover back rents withheld by Yhome Nursing LLC, with the amount to be determined by ECO Systems LLC based on records from ECO Systems LLC and Aligned Properties Group. - Monthly installment payments for the equity portion, with terms to be finalized by the Authorized Representative . - A retroactive Purchase Agreement designating Yhome Nursing LLC as legal owner of the property, subject to foreclosure upon non-payment of the mortgage to recover any funds owed. Rationale: The mortgage provides a structured payout for DAO investors, recovering back rents and aligning with the goal of financial recovery through securing the property as collateral, ensuring repayment and protecting the DAO from further losses. Voting Options Approve DAO-led Refinance as outlined. DAO keeps the property. Approve a $5,000 capital call backed by a DAO member. Approve full managerial authority to Earl Vanze Co as Authorized Representative of the DAO and to refinance the property via a DSCR loan. Any DAO member may volunteer to be the borrower and guarantor of the loan. Approve a retroactive Purchase Agreement with the Buyer, with terms negotiated by the Authorized Representative and reviewed by an Ohio title company’s attorney for compliance and recording. Require that refinance proceeds (~$105,000) currently held by Buyer be applied immediately and directly to loan paydown. Authorize Buyer to withhold 8 months of loan payments (PITI of $1,483.07/month) as approved in the January 29, 2024 governance vote. Require proof of loan paydown via mortgage or payoff statement. Limit reimbursements to approved DAO expenses: $84.31 (interest on fronted funds) and $792 (10% of Repairs & Maintenance ). Transfer deed and remove Cal’s guarantor status once refinance and loan payoff are complete. Approve Mortgage Agreement as outlined. Yhome (Buyer) keeps the property. Approve a $5,000 capital call backed by a DAO member. Approve full managerial authority to Earl Vanze Co as Authorized Representative of the DAO. Approve a retroactive Purchase Agreement and Mortgage Lien with the Buyer, with terms negotiated by the Authorized Representative and reviewed by an Ohio title company’s attorney for compliance and recording. Decline Proposal. Property and DAO remain in legal limbo. Title remains vested in Yhome Nursing LLC, and Calixte Duffaut continues to retain possession and operational control of the property and all its revenue without any compensation or remedy to the DAO. IN WITNESS WHEREOF, the Parties have duly affixed their signatures on the Agreement Date as upon execution date. DAO Officer ______________________________________ _________________ Lofty AI Inc. AS DAO Officer of Date Lofty Holding 4318 Clybourne Ave nue DAO LLC By: Jerry Chu AS CEO DAO Authorized Representative ______________________________________ _________________ Earl Vanze Co Date DAO Members In accordance with the DAO Operating Agreement, this Agreement shall be deemed executed upon the affirmative digital signatures representing no fewer than sixty percent (60%) of the active voting interests of the DAO, constituting a supermajority. Such vote shall be conducted in accordance with the quorum requirements set forth in the DAO Operating Agreement, and the results shall be recorded and published via the smart contract located at https://allo.info/application/{APP_ID}