Broadmark Realty Capital Inc. (Form: 8-K, Received: 11/20/2019 09:28:53)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 14, 2019

BROADMARK REALTY CAPITAL INC.

(Exact name of registrant as specified in its charter)

Maryland	333-233214	82-2620891
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1420 Fifth Avenue, Suite 2000

Seattle, WA 98101

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (206) 971-0800

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Securities Act of 1933, as amended:

Title of each class	Trading Symbols	Name of each exchange on which registered
Common stock, par value $0.001 per share	BRMK	New York Stock Exchange
Warrants, each exercisable for one fourth (1/4^th) share of Common Stock at an exercise price of $2.875 per one fourth (1/4^th) share	BRMK WS	NYSE American LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933, as amended, or Rule 12b-2 of the Securities Exchange Act of 1934, as amended.

Emerging growth company [X]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act of 1934, as amended. ☐

INTRODUCTORY NOTE

On November 14, 2019 (the “Closing Date”), Broadmark Realty Capital Inc., a Maryland corporation (formerly named Trinity Sub Inc.) (the “Company”), consummated the previously announced business combination (the “Business Combination”), following a special meeting of stockholders (the “Special Meeting”), where the stockholders of Trinity Merger Corp., a Delaware corporation (“Trinity”), considered and approved, among other matters, a proposal to adopt the Agreement and Plan of Merger, dated August 9, 2019 (the “Merger Agreement”), by and among the Company, Trinity, Trinity Merger Sub I, Inc. (“Merger Sub I”), Trinity Merger Sub II, LLC (“Merger Sub II” and together with Trinity, the Company and Merger Sub I, the “Trinity Parties”), PBRELF I, LLC (“PBRELF”), BRELF II, LLC (“BRELF II”), BRELF III, LLC (“BRELF III”), BRELF IV, LLC (“BRELF IV” and, together with PBRELF, BRELF II and BRELF III, the “Broadmark Companies” and each a “Broadmark Company”), Pyatt Broadmark Management, LLC (“MgCo I”), Broadmark Real Estate Management II, LLC (“MgCo II”), Broadmark Real Estate Management III, LLC (“MgCo III”), and Broadmark Real Estate Management IV, LLC (“MgCo IV” and, together with MgCo I, MgCo II and MgCo III, the “Management Companies” and each a “Management Company,” and the Management Companies, together with the Broadmark Companies and their subsidiaries, the “Company Group”), and approve the transactions contemplated by the Merger Agreement.

Pursuant the terms and subject to the conditions set forth in the Merger Agreement, (i) Merger Sub I merged with and into Trinity, with Trinity being the surviving entity of such merger (the “Trinity Merger”), (ii) immediately following the Trinity Merger, each of the Broadmark Companies merged with and into Merger Sub II, with Merger Sub II being the surviving entity of such merger (the “Company Merger”), and (iii) immediately following the Company Merger, each of the Management Companies merged with and into Trinity, with Trinity being the surviving entity of such merger (the “Management Company Merger” and, together with the Trinity Merger and the Company Merger, the “Mergers”), and, as a result, Merger Sub II and Trinity became wholly owned subsidiaries of the Company. In connection with the consummation of the business combination, the Company was renamed Broadmark Realty Capital Inc. For a description of the Business Combination and the Merger Agreement, see the sections entitled “Summary of the Joint Proxy Statement/Prospectus—Parties to the Business Combination” beginning on page 1 of the Company’s joint proxy statement/prospectus dated October 18, 2019 (the “Prospectus”), filed with the U.S. Securities and Exchange Commission (the “Commission”) on October 18, 2019, “Summary of the Joint Proxy Statement/Prospectus—The Business Combination” beginning on page 2 of the Prospectus, “The Business Combination” beginning on page 62, and “The Merger Agreement” beginning on page 87 of the Prospectus.

Unless otherwise indicated or the context otherwise requires, references in this Current Report on Form 8-K (the “Report”) to the “Company,” “we,” “us” and “our,” refer to the combined company following consummation of the Business Combination.

Item 1.01.

Entry into a Material Definitive Agreement

Executive Employment Agreements

The Company has entered into employment agreements with each of its executive officers (the “Employment Agreements”). The Employment Agreements became effective on the Closing Date. Under the terms of the Employment Agreements, each of our executive officers are employed at will, and either such officer or the Company can terminate his or her employment at any time and for any reason. The Employment Agreements also provide for the payment of an annual base salary and a target bonus equivalent to a specified percentage of each executive officer’s salary. For 2019, the target bonus will be pro-rated to cover the period between the Closing Date and the end of the year.

On August 9, 2019, the Company entered into an Employment Agreement with Jeffrey Pyatt, effective as of the Closing Date, to serve as its Chief Executive Officer. Pursuant to the terms of Mr. Pyatt’s Employment Agreement, Mr. Pyatt will receive annual base salary of $400,000, and will be eligible to receive an annual bonus based on the achievement of certain annual operating profit targets and other objectives established by the board of directors of the Company (the “Board”), with a target bonus equivalent to $250,000 if all performance goals are satisfied at the target level of performance.

On the Closing Date, the Company entered into an Employment Agreement with David Schneider to serve as its Chief Financial Officer. Pursuant to the terms of Mr. Schneider’s Employment Agreement, Mr. Schneider will receive annual base salary of $350,000, and will be eligible to receive an annual bonus based on the achievement of certain annual operating profit targets and other objectives established by the Board, with a target bonus equivalent to $250,000 if all performance goals are satisfied at the target level of performance. Mr. Schneider also received a signing bonus of $150,000 and is expected to be granted restricted stock units (“RSUs”) in the Company with a value of $600,000 as of the grant date. The RSUs will be subject to the Company’s Incentive Plan (as defined below) and vest in one-third installments on each of the first three anniversaries of the date that Mr. Schneider commences his employment with the Company, subject to Mr. Schneider’s continuing employment through the applicable vesting date. Mr. Schneider’s employment with the Company will become effective on December 9, 2019.

On August 9, 2019, the Company entered into an Employment Agreement with Joanne Van Sickle, effective as of the Closing Date, to serve as its Controller. Pursuant to the terms of Ms. Van Sickle’s Employment Agreement, Ms. Van Sickle will receive an annual base salary of $150,000, and will be eligible to receive an annual bonus based on the achievement of certain annual operating profit targets and other objectives established by the Board, with a target bonus equivalent to $250,000 if all performance goals are satisfied at the target level of performance.

On August 9, 2019, the Company entered into an Employment Agreement with Adam Fountain, effective as of the Closing Date, to serve as Executive Vice President of the Company. Pursuant to the terms of Mr. Fountain’s Employment Agreement, Mr. Fountain will receive an annual base salary of $400,000, and will be eligible to receive an annual bonus based on the achievement of certain annual operating profit targets and other objectives established by the Board, with a target bonus equivalent to $250,000 if all performance goals are satisfied at the target level of performance.

The table below sets forth the annual salary and target percentage of salary for bonus as set forth in each executive officer’s Employment Agreement and the expected initial equity award, subject to approval by our Compensation Committee:

Name	Position	Annual Base Salary		Target Percentage of Annual Salary for Bonus			Shares of Broadmark Realty Common Stock subject to expected RSU Award
Jeffrey Pyatt	Chief Executive Officer	$	400,000		62.5	%		95,694
David Schneider	Chief Financial Officer	$	350,000		71.4	%		57,416
Joanne Van Sickle	Controller	$	150,000		166.7	%		—
Adam Fountain	Executive Vice President	$	400,000		62.5	%		71,770

In the event that the Company terminates the employment of any of its executive officers without “Cause” (as defined in the Employment Agreements), subject to the applicable executive officer entering into a release of claims provided by the Company, such executive officer is entitled to receive severance benefits of 24 months of continued base salary (or 12 months of continued base salary, in the case of David Schneider).

The foregoing description of the Employment Agreements is not a complete description thereof and is qualified in its entirety by reference to the full text of the fully-executed the Employment Agreements, which are attached hereto as Exhibits 10.1 through 10.4 and are incorporated herein by reference.

Warrant Agreement Amendments

In connection with the Business Combination, warrant holders who held public warrants (the “Trinity Public Warrants”) and private warrants (the “Trinity Private Placement Warrants” and, together with the Trinity Public Warrants, the “Trinity Warrants”) of Trinity approved an amendment (the “Initial Warrant Amendment”) to the terms of Trinity’s Warrant Agreement. Upon the completion of the Business Combination, (i) the anti-dilution provisions contained in Section 4.1.2 of the Warrant Agreement relating to the payment of cash dividends and applicable to both the Trinity Public Warrants and the Trinity Private Placement Warrants were amended; (ii) each of the outstanding Trinity Public Warrants, which entitled the holder thereof to purchase one share of Trinity’s Class A common stock, par value $0.0001 per share (the “Trinity Class A Common Stock”), at an exercise price of $11.50 per share, became exercisable for one-quarter of one share at an exercise price of $2.875 per one-quarter share ($11.50 per whole share), and (iii) each holder of a Trinity Public Warrant received, for each such Trinity Public Warrant (in exchange for the reduction in the number of shares for which such Trinity Public Warrants are exercisable), a cash payment of $1.60.

Upon consummation of the Business Combination, each outstanding Trinity Public Warrant automatically converted into an equal number of warrants issued by the Company and publicly traded (the “Company Public Warrants”) and each of Trinity Private Placement Warrants automatically converted into an equal number of warrants issued by the Company and privately held (the “Company Private Placement Warrants”) and, together with the Company Public Warrants, the “Company Warrants”), and became exercisable on the same terms as were in effect with respect to such Trinity Public Warrants or Trinity Private Placement Warrants, respectively, immediately prior to the Business Combination, as amended by the Initial Warrant Amendment. Pursuant to the Initial Warrant Amendment, a holder of Trinity Public Warrants may not exercise its Trinity Public Warrants for fractional shares of Broadmark Realty Common Stock and therefore only four Trinity Public Warrants (or a number of Trinity Public Warrants evenly divisible by four) may be exercised at any given time by the holder of Trinity Public Warrants. In addition, on the Closing Date, the Company entered into a subsequent amendment to the terms of Trinity’s Warrant Agreement (the “Second Warrant Amendment” and, together with the Initial Warrant Amendment, the “Warrant Amendments”), pursuant to which Continental Stock Transfer & Trust Co. resigned as agent under the Warrant Agreement and American Stock Transfer & Trust Company, LLC, the Company’s transfer agent, was appointed as agent under the Warrant Agreement.

The summary of the Warrant Amendments is qualified in its entirety by reference to the text of the Warrant Amendments, which are included as Exhibits 4.4 and 4.5 to this Report and are incorporated herein by reference.

Item 2.01.

Completion of Acquisition or Disposition of Assets

The information set forth in the “Introductory Note” above is incorporated by reference into this Item 2.01. On November 12, 2019, the Business Combination was approved by the stockholders of Trinity at the Special Meeting. In connection with the closing of the Business Combination (the “Closing”), 7,899,028 shares of Trinity Class A Common Stock were redeemed at a per share price of approximately $10.45352229. Upon the Closing on November 14, 2019, the Company consummated the transactions contemplated by the Merger Agreement.

Pursuant to the Merger Agreement, each share of Trinity Class A Common Stock and Class B common stock, par value $0.0001 per share, (the “Trinity Class B Common Stock” and together with the Trinity Class A Common Stock, the “Trinity Common Stock”), issued and outstanding immediately prior to the effective time of the Trinity Merger (excluding the Trinity Common Stock redeemed in the Offer (as defined in the Merger Agreement) and surrendered by HN Investors LLC (the “ Trinity Sponsor”)) was cancelled and retired and automatically converted into the right to receive one share of common stock, par value $0.001 per share, of the Company (“Broadmark Realty Common Stock”), subject to adjustment under certain limited circumstances. The Trinity Sponsor surrendered and transferred to the Company, for no consideration and as a contribution to the capital of Trinity, (a) 3,801,360 shares of Trinity Class B Common Stock and (b) 7,163,324 outstanding Trinity Private Placement Warrants, in each case pursuant to and in accordance with the terms of the Sponsor Agreement (as defined in the Merger Agreement).

For each Broadmark Company, each preferred unit (“Company Preferred Unit”) issued and outstanding immediately prior to the effective time of the Company Merger was be cancelled and retired and automatically converted into the right to receive a number of shares of Broadmark Realty Common Stock equal to (A) the Company Preferred AUM (as defined in the Merger Agreement) applicable to the Broadmark Company in which the Company Preferred Unit was held, (B) divided by the number of Company Preferred Units of such Broadmark Company outstanding as of immediately prior to the effective time of the Company Merger, and (C) divided by $10.45352229, subject to adjustment under certain limited circumstances. The “Reference Price,” determined to be $10.45352229, is the value of the funds held by Trinity in the account established for the benefit of its stockholders, net of certain taxes and determined as of the close of business on the business day immediately preceding the date of Closing, divided by the outstanding number of shares of Trinity Class A Common Stock.

For each Broadmark Company, each common unit (“Company Common Unit”) issued and outstanding immediately prior to the effective time of the Company Merger was cancelled and retired and automatically converted into the right to receive a number of shares of Broadmark Realty Common Stock equal to (A) the Company Common Consideration (as defined in the Merger Agreement), (B) divided by the Reference Price, and (C) after payment of certain fees and expenses related to the termination of certain referral agreements, allocated among the Companies and the Company Common Units, subject to adjustment under certain limited circumstances. The Company Common Consideration was approximately $64.34 million in shares of Broadmark Realty Common Stock at a price per share equal to $10.45352229.

For each Management Company, each unit (“Management Company Unit”) issued and outstanding immediately prior to the effective time of the Management Company Merger was cancelled and retired and automatically converted into the right to receive, after payment of certain fees and expenses related to the termination of certain referral agreements, the Management Company Consideration (as defined in the Merger Agreement) allocated among the Management Companies and the Management Company Units. The Management Company Consideration was an amount equal to approximately $98.16 million in cash, subject to adjustment for certain transaction expenses and indebtedness.

Pursuant to the Merger Agreement, each Trinity Warrant that was issued and outstanding immediately prior to the effective time of the Trinity Merger was automatically and irrevocably modified to provide that such Trinity Warrant will entitle the holder thereof to acquire such equal number of shares of Broadmark Realty Common Stock per Trinity Warrant. Upon the completion of the Business Combination, the Company entered into the Warrant Amendments. A description of each Warrant Amendment is contained under “Entry into a Material Definitive Agreement” above and is incorporated herein by reference.

In connection with the Business Combination and concurrently with the execution of the Merger Agreement, the Company entered into certain subscription agreements (the “PIPE Subscription Agreements”) with Farallon Capital Partners, L.P., Farallon Capital Institutional Partners, L.P., Farallon Capital Institutional Partners II, L.P., Farallon Capital Institutional Partners III, L.P., Four Crossings Institutional Partners V, L.P., and Farallon Capital (AM) Investors, L.P., each an entity affiliated with Farallon Capital Management, L.L.C. (collectively, the “Farallon Entities”), for a private placement of Broadmark Realty Common Stock, pursuant to which the Company issued and sold to the Farallon Entities approximately $75.0 million of shares of Broadmark Realty Common Stock in the aggregate immediately prior to the consummation of the Business Combination at a price per share equal to the Reference Price (the “PIPE Investment”). The PIPE Investment was conditioned on the substantially concurrent closing of the Mergers and other customary closing conditions. The proceeds from the PIPE Investment will be used, among other things, to help to fund the ongoing business operations of the Company. The summary of the PIPE Investment is qualified in its entirety by reference to the text of the PIPE Subscription Agreements, which are included as Exhibit 10.5 to this Report and are incorporated herein by reference.

Immediately after the Closing, the Company had 132,014,635 shares of Broadmark Realty Common Stock outstanding, 41,674,613 Company Public Warrants outstanding and 5,186,676 Company Private Placement Warrants outstanding. The Broadmark Realty Common Stock is listed on The New York Stock Exchange (“NYSE”) under the ticker symbol “BRMK” and the Company Public Warrants are listed on the NYSE American LLC (“NYSE Amex”) under the ticker symbol “BRMK WS.”

FORM 10 INFORMATION

Item 2.01(f) of the Current Report on Form 8-K states that, if the registrant was a shell company, other than a business combination related shell company, as those terms are defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), immediately before a transaction involving the acquisition or disposition of a significant amount of assets, otherwise than in the ordinary course of business, the registrant must include herein the information that would be required if the registrant were filing a general form for registration of securities on Form 10 under the Exchange Act reflecting all classes of the registrant’s securities subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act upon consummation of the transaction.

Item 2.01(f) of the Current Report on Form 8-K further states that, if any disclosure required by such Item 2.01(f) is previously reported, as such term is defined in Rule 12b-2 under the Exchange Act, the registrant may identify the filing in which such disclosure is included instead of including such disclosure in the Current Report on Form 8-K.

Cautionary Note Regarding Forward-Looking Statements

This Report and the exhibits attached hereto contain “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Forward-looking statements reflect the Company’s current views with respect to, among other things, capital resources, portfolio performance and results of operations. Likewise, the Company’s consolidated financial statements and statements regarding anticipated growth in its operations, anticipated market conditions, demographics and results of operations are forward-looking statements. In some cases, you can identify these forward-looking statements by the use of terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words or phrases.

The forward-looking statements contained in this Report and the exhibits attached hereto are based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those that it has anticipated. Actual results may differ materially from those in the forward-looking statements. Some factors that could cause the Company’s actual results to differ include:

•

general economic uncertainty and the effect of general economic conditions on the real estate and real estate capital markets in particular;

•

financing risks;

•

changes in laws or regulations or interpretations of current laws and regulations that impact the Company’s business, assets or classification as a REIT;

•

the Company’s ability to manage future growth;

•

changes in personnel and availability of qualified personnel; and

•

other risks and uncertainties indicated in this Report and from time to time in filings made with the Commission.

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the Company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the section of this Report entitled “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Business

The information required by this item is contained in the Prospectus, in the sections entitled “Summary of the Joint Proxy Statement/Prospectus—Parties to the Business Combination” beginning on page 1 of the Prospectus, “Summary of the Joint Proxy Statement/Prospectus—The Business Combination” beginning on page 2 of the Prospectus, “Risk Factors—Risks Related to the Company Group” beginning on page 26 of the Prospectus, “Risk Factors—Risks Related to the Company Group’s Business” beginning on page 26 of the Prospectus, “Risk Factors—Market Risks Related to Real Estate Loans,” beginning on page 29 of the Prospectus, “Risk Factors—Risks Related to the Company Group’s Loan Portfolio” beginning on page 31 of the Prospectus, “Risk Factors—Risks Related to Broadmark Realty’s REIT Qualification and Investment Company Exemption Following the Business Combination” beginning on page 36 of the Prospectus, “Risk Factors—Risks Related to Ownership of Broadmark Realty Common Stock” beginning on page 49 of the Prospectus, “Business of the Company Group and Certain Information About the Company Group” beginning on page 188 of the Prospectus, and “Company Group Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 205 of the Prospectus, which is incorporated herein by reference.

Risk Factors

The information required by this item is contained in the Prospectus, in the section entitled “Risk Factors” beginning on page 24 of the Prospectus, which is incorporated herein by reference – specifically, subsections “Risk Factors—Risks Related to the Company Group” beginning on page 26 of the Prospectus, “Risk Factors—Risks Related to the Company Group’s Business” beginning on page 26 of the Prospectus, “Risk Factors—Market Risks Related to Real Estate Loans,” beginning on page 29 of the Prospectus, “Risk Factors—Risks Related to the Company Group’s Loan Portfolio” beginning on page 31 of the Prospectus, “Risk Factors—Risks Related to Broadmark Realty’s REIT Qualification and Investment Company Exemption Following the Business Combination” beginning on page 36 of the Prospectus, and “Risk Factors—Risks Related to Ownership of Broadmark Realty Common Stock” beginning on page 49 of the Prospectus, which is incorporated herein by reference.

Financial Information.

The information required by this item is contained in the Prospectus, in the sections entitled “Summary of the Joint Proxy Statement/Prospectus—Summary Historical Financial Data of the Company Group” beginning on page 11 of the Prospectus, “Summary of the Joint Proxy Statement/Prospectus—Summary Pro Forma Financial Information” beginning on page 22 of the Prospectus, “Selected Historical Financial Data of the Company Group” beginning on page 133 of the Prospectus, “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 145 of the Prospectus, “Company Group Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 205 of the Prospectus, and “Quantitative and Qualitative Disclosures about Market Risk” beginning on page 240 of the Prospectus, which is incorporated herein by reference. Reference is also made to the disclosure set forth under Item 9.01 of this Report concerning the financial information of the Company and Exhibits 99.2, 99.3 and 99.4 hereto.

Properties

The Company’s principal executive offices are located at 1420 Fifth Avenue, Suite 2000, Seattle, Washington 98101.

Security Ownership of Certain Beneficial Owners and Management.

The following information table sets forth information known to the Company regarding the beneficial ownership of Broadmark Realty Common Stock as of November 14, 2019 by:

•

each person known to the Company to be the beneficial owner of more than 5% of outstanding shares of Broadmark Realty Common Stock;

•

each of the Company’s executive officer or director; and

•

all executive officers and directors of the Company as a group.

Beneficial ownership is determined according to the rules of the Commission, which generally provide that a person has beneficial ownership of a security if such person possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Shares of Broadmark Realty Common Stock issuable upon exercise of options and Company Warrants currently exercisable within 60 days are deemed outstanding solely for purposes of calculating the percentage of total voting power of the beneficial owner thereof.

The beneficial ownership of Broadmark Realty Common Stock is based on 132,014,635 shares of Broadmark Realty Common Stock issued and outstanding as of November 14, 2019.

Name and Address of Beneficial Owner⁽¹⁾	Shares Beneficially Owned⁽²⁾		Percentage of Outstanding Broadmark Realty Common Stock
Joseph L. Schocken⁽³⁾		1,987,963		1.51	%
Jeffrey B. Pyatt⁽⁴⁾		2,500,960		1.89	%
Stephen G. Haggerty⁽⁵⁾		—		*
Daniel J. Hirsch⁽⁶⁾		—		*
Kevin Luebbers⁽⁷⁾		—		*
Norma Lawrence		—		*
David Karp		—		*
David Schneider		—		*
Joanne Van Sickle		413,288		*
Adam J. Fountain⁽⁸⁾		607,773		*
Farallon Capital Management LLC⁽⁹⁾		11,359,802		8.34	%
HN Investors LLC⁽¹⁰⁾		10,010,136		7.30	%
All expected directors and officers as a group (post-Business Combination) (10 individuals)⁽¹¹⁾		5,509,984		4.17	%

__________

*	Less than 1%

(1)	Unless otherwise noted, the business address of each of the following entities or individuals is 1420 Fifth Avenue, Suite 2000, Seattle, WA 98101.

(2)	The numbers in this column include Company Warrants, each of which is convertible into one share of Broadmark Realty Common Stock.

(3)

Includes 44,664 shares held directly by Mr. Schocken, 189,039 shares held by Tranceka, LLC, 229,588 shares held by Broadmark Capital LLC, and 1,524,672 shares held by Tranceka Holdings, LLC. Mr. Schocken is the beneficial owner of the shares held by Tranceka, LLC, Broadmark Capital LLC and Tranceka Holdings, LLC as he holds voting and dispositive power over such shares. Interest shown does not include the 95,694 RSUs anticipated to be awarded to Mr. Schocken following the closing of the Business Combination. One third of the RSUs will vest into an equal number of shares of Broadmark Realty Common Stock on the first anniversary of the issuance of the RSUs, with the remaining two-thirds vesting equally every month for two years after the first anniversary of the issuance.

(4)

Includes 13,337 shares held by Mr. Pyatt and his wife, and 2,487,623 shares held by Pyatt Lending Company, LLC. Mr. Pyatt and his spouse are the beneficial owners of the shares held by Pyatt Lending Company, LLC, as they share voting and dispositive power over such shares. Interest shown does not include the 95,694 RSUs anticipated to be awarded to Mr. Pyatt following the closing of the Business Combination. One third of the RSUs will vest into an equal number of shares of Broadmark Realty Common Stock on the first anniversary of the issuance of the RSUs, with the remaining two-thirds vesting equally every month for two years after the first anniversary of the issuance.

(5)

Mr. Haggerty does not beneficially own any shares of Broadmark Realty Common Stock or Company Warrants. However, Mr. Haggerty has a pecuniary interest in the Company’s shares of Broadmark Realty Common Stock and Company Private Placement Warrants owned by Trinity Sponsor, including through Mr. Haggerty’s ownership of an interest in Trinity Sponsor and in Trinity Real Estate Investments LLC, a Delaware limited liability company and an entity with which Trinity Sponsor is affiliated (“Trinity Investments”). In the aggregate, taking into account his ownership interests in both Trinity Sponsor and Trinity Investments, Mr. Haggerty is expected to have a direct or indirect ownership interest in 597,105 shares of Broadmark Realty Common Stock and 210,558 Company Private Placement Warrants to acquire additional 210,558 shares of Broadmark Realty Common Stock, representing, in the aggregate, less than 1% beneficial ownership interest by Mr. Haggerty in the Company to the extent these securities are deemed to be beneficially owned by him.

(6)

Mr. Hirsch does not beneficially own any shares of Broadmark Realty Common Stock or Company Warrants. However, since January 2019, Mr. Hirsch has served as a consultant to Trinity Investments pursuant to a consulting agreement, as discussed under “Certain Relationships and Related Person Transactions” beginning on page 300 of the Prospectus. Mr. Hirsch’s consulting agreement provides for a success fee payable by Trinity Investments to Mr. Hirsch in connection with the completion of the Business Combination, pursuant to which Mr. Hirsch will receive 137,305 shares of Broadmark Realty Common Stock and 259 of the Company Private Placement Warrants held by Trinity Sponsor and expected to be transferred to Trinity Investments following the expiration of the lock-up agreement to which Trinity Sponsor is a party. These shares of Broadmark Realty Common Stock and these Company Warrants are expected to represent, in the aggregate, a less than 1% beneficial ownership interest by Mr. Hirsch in the Company. Instead of transferring these securities to Mr. Hirsch, Trinity Investments may, at its election, pay the success fee in cash in an amount equal to the value of these securities.

(7)

Mr. Luebbers does not beneficially own any shares of Broadmark Realty Common Stock or Company Warrants. However, Mr. Luebbers has served as a consultant to Trinity Investments since October 2019 pursuant to a consulting agreement. Mr. Luebbers’s consulting agreement provides for a success fee payable by Trinity Investments to Mr. Luebbers in connection with the completion of the Business Combination, pursuant to which Mr. Luebbers will receive 137,305 shares of Broadmark Realty Common Stock and 259 of the Company Private Placement Warrants held by Trinity Sponsor and expected to be transferred to Trinity Investments following the expiration of the lock-up agreement to which Trinity Sponsor is a party. These shares of Broadmark Realty Common Stock and these Company Warrants are expected to represent, in the aggregate, a less than 1% beneficial ownership interest by Mr. Luebbers in the Company. Instead of transferring these securities to Mr. Luebbers, Trinity Investments may, at its election, pay the success fee in cash in an amount equal to the value of these securities.

(8)

Interest shown does not include the 71,770 RSUs anticipated to be awarded to Mr. Fountain following the closing of the Business Combination. One third of the RSUs will vest into an equal number of shares of Broadmark Realty Common Stock on the first anniversary of the issuance of the RSUs, with the remaining two-thirds vesting equally every month for two years after the first anniversary of the issuance.

(9)

Includes (i) 7,174,613 shares of Broadmark Realty Common Stock, received as part of the PIPE Investment (including 2,385,559 shares of Broadmark Realty Common Stock directly held by Farallon Capital Partners, L.P. (“FCP”), 3,103,021 shares of Broadmark Realty Common Stock directly held by Farallon Capital Institutional Partners, L.P. (“FCIP”), 573,969 shares of Broadmark Realty Common Stock directly held by Farallon Capital Institutional Partners II, L.P. (“FCIP II”), 376,667 shares of Broadmark Realty Common Stock directly held by Farallon Capital Institutional Partners III, L.P. (“FCIP III”), 538,096 shares of Broadmark Realty Common Stock directly held by Four Crossings Institutional Partners V, L.P. (“FCIP V”), and 197,301 shares of Broadmark Realty Common Stock directly held by Farallon Capital (AM) Investors, L.P. (“FCAMI”)), (ii) 2,391,536 shares of Broadmark Realty Common Stock, that may be issued pursuant to the option under the PIPE Investment (including 795,186 shares of Broadmark Realty Common Stock that may be issued directly to Farallon Capital Partners, L.P., 1,034,340 shares of Broadmark Realty Common Stock that may be issued directly to Farallon Capital Institutional Partners, L.P., 191,323 shares of Broadmark Realty Common Stock that may be issued directly to Farallon Capital Institutional Partners II, L.P., 125,555 shares of Broadmark Realty Common Stock that may be issued directly to Farallon Capital Institutional Partners III, L.P., 179,365 shares of Broadmark Realty Common Stock that may be issued directly to Four Crossings Institutional Partners V, L.P., and 65,767 shares of Broadmark Realty Common Stock that may be issued directly to Farallon Capital (AM) Investors, L.P.), and (iii) 1,793,653 shares of Broadmark Realty Common Stock, calculated as one quarter of the 7,174,613 Company Public Warrants to purchase shares of Broadmark Realty Common Stock received in connection with the PIPE Investment (including 596,390 shares of Broadmark Realty Common Stock calculated based on 2,385,559 Company Public Warrants directly held by Farallon Capital Partners, L.P., 775,755 shares of Broadmark Realty Common Stock calculated based on 3,103,021 Company Public Warrants directly held by Farallon Capital Institutional Partners, L.P., 143,492 shares of Broadmark Realty Common Stock calculated based on 573,969 Company Public Warrants directly held by Farallon Capital Institutional Partners II, L.P., 94,167 shares of Broadmark Realty Common Stock calculated based on 376,667 Company Public Warrants directly held by Farallon Capital Institutional Partners III, L.P., 134,524 shares of Broadmark Realty Common Stock calculated based on 538,096 Company Public Warrants directly held by Four Crossings Institutional Partners V, L.P., and 49,325 shares of Broadmark Realty Common Stock calculated based on 197,301 Company Public Warrants directly held by Farallon Capital (AM) Investors, L.P.). Farallon Partners, L.L.C. (“FPLLC”), as the general partner of FCP, FCIP, FCIP II, FCIP III, and FCAMI (the “FPLLC Entities”), may be deemed to beneficially own such shares of Broadmark Realty Common Stock received as part of the PIPE Investment, issued pursuant to the option under the PIPE Investment and Company Public Warrants received in connection with the PIPE Investment held by or issuable to each of the FPLLC Entities. Farallon Institutional (GP) V, L.L.C. (“FCIP V GP”), as the general partner of FCIP V, may be deemed to beneficially own shares of Broadmark Realty Common Stock received as part of the PIPE Investment, issued pursuant to the option under the PIPE Investment and Company Public Warrants received in connection with the PIPE Investment held by or issuable to FCIP V. Each of Philip D. Dreyfuss, Michael B. Fisch, Richard B. Fried, David T. Kim, Monica R. Landry, Michael G. Linn, Rajiv A. Patel, Thomas G. Roberts, Jr., William Seybold, Andrew J. M. Spokes, John R. Warren and Mark C. Wehrly (collectively, the “Farallon Managing Members”), as a (i) managing member of FPLLC or (ii) manager or senior manager, as the case may be, of FCIP V GP, in each case with the power to exercise investment discretion with respect to the shares that may be deemed to be beneficially owned by FPLLC or FCIP V GP, may be deemed to beneficially own such shares of Broadmark Realty Common Stock received as part of the PIPE Investment, issued pursuant to the option under the PIPE Investment and Company Public Warrants received in connection with the PIPE Investment held by or issuable to the FPLLC Entities or FCIP V. Each of FPLLC, FCIP V GP and the Farallon Managing Members disclaims beneficial ownership of any such shares of Broadmark Realty Common Stock received as part of the PIPE Investment, issued pursuant to the option under the PIPE Investment and Company Public Warrants received in connection with the PIPE Investment, except as to securities representing its pro rata interest in, and interest in the profits of, the FPLLC Entities and FCIP V. The address for each of the entities and individuals identified in this footnote is One Maritime Plaza, Suite 2100, San Francisco, California 94111.

(10)

Includes (i) 4,823,640 shares of Broadmark Realty Common Stock, and (ii) 5,186,676 shares of Broadmark Realty Common Stock, calculated as one share per Company Private Placement Warrant to purchase shares of Broadmark Realty Common Stock. The securities are held directly by the Trinity Sponsor. Sean A. Hehir and Lee S. Neibart (together with the Trinity Sponsor, the “Reporting Persons”) are the managers of the Trinity Sponsor and share voting and investment discretion with respect to the Broadmark Realty Common Stock held of record by the Trinity Sponsor. As a result, each of the Reporting Persons may be deemed to have or share beneficial ownership of the securities held directly by the Trinity Sponsor. Each of the Reporting Persons disclaims beneficial ownership of such securities except to the extent of their respective pecuniary interest therein, directly or indirectly. A majority of the shares of the Broadmark Realty Common Stock and a lesser amount of Company Private Placement Warrants to acquire shares of Broadmark Realty Common Stock held by the Trinity Sponsor are expected to be transferred to Trinity Investments following expiration of the lock-up restrictions applicable to the Trinity Sponsor.

(11)

The group comprises Joseph L. Schocken (as non-executive chairman of the Board), Jeffrey B. Pyatt (Chief Executive Officer and director), Stephen G. Haggerty (director), Daniel J. Hirsch (director), Kevin Luebbers (director), Norma Lawrence (director), David Karp (director), David Schneider (Chief Financial Officer), Joanne Van Sickle (Controller) and Adam Fountain (Executive Vice President).

Directors and Executive Officers.

Directors

Effective as of the Closing, in connection with the Business Combination, the size of the Board was increased to seven members and Sean A. Hehir resigned from the Board. The resignation of Mr. Hehir was not the result of any disagreement with the Company. Effective as of the Closing Date, the Board appointed Joseph L. Schocken, Jeffrey B. Pyatt, Daniel J. Hirsch, Kevin M. Luebbers, David Karp and Norma Lawrence to the Board, with a term expiring at the Company’s annual meeting of stockholders in 2020. Immediately following the Closing, the Board consisted of Messrs. Schocken, Pyatt, Hirsch, Luebbers, Karp and Stephen G. Haggerty, and Ms. Lawrence. Information with respect to each of the Company’s directors is contained in the Prospectus, in the section entitled “Management Following the Business Combination” beginning on page 255 of the Prospectus, which is incorporated herein by reference, and in the Company’s Current Report on Form 8-K filed on October 31, 2019.

Independence of Directors

Pursuant to the listing rules of the NYSE, the Company is required to have a majority of independent directors serving on the Board. The Company’s Board has determined that Ms. Lawrence and Messrs. Hirsch, Luebbers, Karp and Haggerty are independent within the meaning of Section 303A.02 of the NYSE Listing Manual. Certain of our directors have from time to time been directors at companies on whose board of directors other of our directors have served.

Committees of the Board of Directors

Following the Closing, the standing committees of the Company’s Board consist of an audit committee (the “Audit Committee”), a compensation committee (the “Compensation Committee”), and a nominating and corporate governance committee (the “Nominating and Corporate Governance Committee”). Each of the committees reports to the Board.

Following the Closing, the Board appointed Messrs. Karp and Luebbers and Ms. Lawrence to serve on the Audit Committee, with Mr. Luebbers serving as its Chairperson. The Board appointed Messrs. Haggerty and Hirsch and Ms. Lawrence to serve on the Compensation Committee, with Mr. Haggerty serving as its Chairperson. Messrs. Hirsch, Karp and Leubbers were appointed to serve on the Nominating and Corporate Governance Committee, with Mr. Hirsch serving as Chairperson.

The biographical information about each of the directors and officers following the Business Combination and information with respect to the Company’s Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee functions are described in the Prospectus, in the sections entitled “Management Following the Business Combination” beginning on page 255 and in the Company’s Form 8-K, filed with the Commission on October 31, 2019, which are incorporated herein by reference.

Executive Officers

In connection with and effective as of the Closing, Sean A. Hehir resigned as the Chief Executive Officer, President, Chief Financial Officer and Treasurer of the Company. Immediately following the Closing, the following individuals were executive officers of the Company:

Name			Position
Jeffrey Pyatt			Chief Executive Officer and Director
David Schneider			Chief Financial Officer
Joanne Van Sickle			Controller
Adam Fountain			Executive Vice President

On August 9, 2019, the Company entered into Employment Agreements with Messrs. Pyatt and Fountain and Ms. Van Sickle, and on November 14, 2019, the Company entered into an Employment Agreement with Mr. Schneider. The description of the Employment Agreements under “Entry into a Material Definitive Agreement—Executive Employment Agreements” above is incorporated herein by reference.

Jeffrey B. Pyatt serves as the Chief Executive Officer and Director of the Company. Prior to the Business Combination he served as President of MgCo I since he co-founded it in 2010 and has served as a member of the board of directors of each of the Companies since their inception and, directly or indirectly, as a member of the board of managers of each of the Management Companies since their inception. Prior to founding MgCo I, Mr. Pyatt co-founded and managed a private lending fund, Private Lenders Group, from 2004 to 2009. Mr. Pyatt has served on the boards for three different Boys and Girls Clubs as well as numerous other non-profits. Mr. Pyatt received a Bachelor of Science in accounting from the University of Denver and a master’s degree in taxation from the University of Denver College of Law.

David Schneider is expected to serve as the Chief Financial Officer of the Company starting on December 9, 2019. Prior to joining the Company, he served as Managing Director and Chief Accounting Officer of New Residential Investment Corp. since May 2018, and has previously served as Senior Vice President and Comptroller on the same company since May 2014. Previously, Mr. Schneider served in various other senior financial and regulatory reporting roles, including Vice President of Corporate Accounting Policy at JPMorgan Chase, Director of Global Accounting Policy and Advisory at American Express, and Assistant Vice President of Internal Audit at Credit Suisse. Mr. Schneider is a licensed certified public accountant in New York, and a member of the New York State Society of Certified Public Accountants. Mr. Schneider is a graduate of Fordham University with a Bachelor of Science in Accounting.

Joanne Van Sickle serves as the Controller of the Company. Prior to the Business Combination she served as Controller for the Management Companies since 2010. In addition, she has served as a member of the board of directors of each of the Companies since their inception. Prior to joining the Company Group, Ms. Van Sickle worked from 2005 through 2010 as a controller for a Washington based private lending fund, Private Lenders Group. Prior to that, Ms. Van Sickle maintained a private accounting practice from 1991 to 2004. Ms. Van Sickle began her career in 1983 serving as a certified public accountant in the auditing department of Touche Ross. Ms. Van Sickle has served as a member of the board of directors for The Glaser Foundation since 2016, and was the organization’s administrator from 1991 to 2015. Ms. Van Sickle received a B.A. from Central Washington University.

Adam J. Fountain serves as the Executive Vice President of the Company. Prior to the Business Combination he was a partner in each of the Management Companies and oversees day to day management of the Companies. In addition, he serves as a member of the loan review committee and as a member of the board of directors of each of the Companies. He has served as Managing Director at Broadmark Capital since 2013, where he is responsible for investor and client sourcing, transaction management and all activities related to Broadmark Capital’s merchant banking function. Mr. Fountain originally joined Broadmark Capital in 2003 as an associate focused on client sourcing and transaction management in the life sciences sector and has held positions of increasing responsibilities with Broadmark Capital since then. Prior to joining Broadmark Capital, Mr. Fountain was an associate at L.E.K. Consulting, an international strategic consulting firm from 2001 to 2003. Since 2017, Mr. Fountain has served on the board of directors of the Seattle Opera and currently serves as the chair of the development committee. Mr. Fountain received a B.A. in international relations from Stanford University.

Executive Compensation.

The information required by this item is contained in the information set forth under “Entry into a Material Definitive Agreement” above and is incorporated herein by reference. The compensation for the Company’s executive officers before the Closing Date is described in the Prospectus in the sections entitled “The Company Group Management—Named Executive Officer Compensation” beginning on page 203, and “Information About Trinity—Officer and Director Compensation” which information is incorporated herein by reference. The general compensation programs of the Company’s executive officers after the Business Combination are described in the section of the Prospectus entitled “Management Following the Business Combination—Non-Employee Director and Officer Compensation” beginning on page 257, which information is incorporated herein by reference.

At the Special Meeting, stockholders of Trinity approved and adopted the Broadmark Realty Capital Inc. 2019 Stock Incentive Plan (the “Incentive Plan”), pursuant to which a total of 5,000,000 shares of Broadmark Realty Common Stock will be reserved for issuance under the Incentive Plan. A description of the Incentive Plan is set forth in the section of the Prospectus entitled “Proposals to be Considered by Trinity’s Stockholders—Proposal No. 2—Approval and Adoption of the Incentive Plan” beginning on page 171 of the Prospectus and is incorporated herein by reference. A copy of the complete text of the Incentive Plan is filed as Exhibit 10.6 to this Report and is incorporated herein by reference.

Director Compensation.

The information required by this item is contained in the Prospectus, in the section entitled “Management Following the Business Combination—Non-Employee Director and Officer Compensation,” beginning on page 257 of the Prospectus, which is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence.

The information required by this item is contained in the Prospectus, in the sections entitled “The Business Combination—Interests of Directors, Managers and Officers in the Business Combination,” beginning on page 82 of the Prospectus, and “Certain Relationships and Related Person Transactions” beginning on page 300 of the Prospectus, which is incorporated herein by reference. In addition, the information under Item 5.02 of the Company’s Current Report on Form 8-K filed on October 31, 2019 is incorporated herein by reference.

Legal Proceedings.

The Company is involved in legal proceedings which arise in the ordinary course of business. It believes that the outcome of such matters, individually and in the aggregate, will not have a material adverse effect on its business, financial condition and results of operations.

Market Price and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

On November 15, 2019, the shares of Broadmark Realty Common Stock and the Company Public Warrants began trading under the symbols “BRMK” on the NYSE and “BRMK WS” on the NYSE Amex, respectively. Trinity’s public units (the “Trinity Units”) automatically separated into shares of Broadmark Realty Common Stock and Company Public Warrants upon consummation of the Business Combination and, as a result, the Trinity Units no longer trade as separate securities.

Recent Sales of Unregistered Securities.

The information set forth in the “Introductory Note” of this Report and above in this Item 2.01 with respect to the issuance of Broadmark Realty Common Stock and the Company Public Warrants in the Business Combination pursuant to the Merger Agreement and the PIPE Investment are incorporated herein by reference.

The Broadmark Realty Common Stock and the Company Public Warrants issued in connection with the PIPE Investment were not registered under the Securities Act in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.

Description of the Company’s Securities.

The information required by this item with respect to (i) the Broadmark Realty Common Stock is contained in the Prospectus, in the section entitled “Description of Broadmark Realty Capital Stock” beginning on page 269 of the Prospectus, which is incorporated herein by reference, and (ii) the Company Warrants is contained in the Company’s Form 8-A, filed with the Commission on November 14, 2019, which is incorporated herein by reference.

Indemnification of Directors and Officers.

The Company entered into indemnification agreements with each of the directors and executive officers that obligate the Company to indemnify them to the maximum extent permitted by Maryland law. The indemnification agreements provide that, if a director or executive officer is a party to, or witness in, or is threatened to be made a party to, or witness in, any proceeding by reason of his or her service as a director, officer, or employee of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that he or she is or was serving in such capacity at our request, the Company must indemnify the director or executive officer for all expenses and liabilities actually and reasonably incurred by him or her, or on his or her behalf, to the maximum extent permitted under Maryland law, including in any proceeding brought by the director or executive officer to enforce his or her rights under the indemnification agreement, to the extent provided by the agreement. The indemnification agreements will also require the Company to advance reasonable expenses incurred by the indemnitee within ten days of the receipt by the Company of a statement from the indemnitee requesting the advance, provided the statement evidences the expenses and is accompanied or preceded by:

•

a written affirmation of the indemnitee’s good faith belief that he or she has met the standard of conduct necessary for indemnification; and

•

a written undertaking, which may be unsecured, by the indemnitee or on his or her behalf to repay the amount paid if it shall ultimately be established that the standard of conduct has not been met.

The indemnification agreements also provide for procedures for the determination of entitlement to indemnification, including requiring such determination be made by independent counsel after a change of control of the Company.

The description of the indemnification agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the indemnification agreements, the form of which is attached hereto as Exhibit 10.7 and incorporated herein by reference.

Financial Statements and Supplementary Data.

The information required by this item is contained in the Prospectus, in the sections entitled “Summary—Summary Historical Financial Data,” “Selected Historical Financial Data of the Company Group” beginning on page 133 of the Prospectus, and “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 145 of the Prospectus, which is incorporated herein by reference. Reference is also made to the disclosure set forth under Item 9.01 of this Report concerning the financial information of the Company and Exhibits 99.2, 99.3 and 99.4 hereto.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

On November 14, 2019, the board of directors of Trinity terminated the engagement of Ernst & Young LLP as Trinity’s independent registered accounting firm. Ernst & Young LLP’s reports on the financial statements of Trinity at December 31, 2018, and for the period from January 24, 2018 (inception) through December 31, 2018, and in the subsequent interim period through date of dismissal, included in the Prospectus, did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. Furthermore, during the period described above, there have been no disagreements with Ernst & Young LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to Ernst & Young LLP’s satisfaction, would have caused Ernst & Young LLP to make reference to the subject matter of the disagreement in connection with its reports on Trinity’s financial statements for such period.

Upon consummation of the Business Combination, Ernst & Young LLP ceased to be the independent registered public accounting firm for the Company and the Company intends to retain Moss Adams LLP as its independent registered public accounting firm.

The Company has provided Ernst & Young LLP with a copy of the foregoing disclosure and has requested that Ernst & Young LLP furnish the Company with a letter addressed to the SEC stating whether or not it agrees with the statements made herein, each as required by applicable SEC rules. A copy of Ernst & Young LLP’s letter, dated November 20, 2019, is attached as Exhibit 16.2 to this Report.

CohnReznick LLP (“CohnReznick”) previously audited the financial statements of the PBRELF and BRELF II as of and for the years ended December 31, 2017 and 2018 and BRELF III as of and for the year ended December 31, 2018. In connection with the Business Combination, as discussed below, on or about April 19, 2019 each of PBRELF, BRELF II, and BRELF III dismissed CohnReznick as its principal accountant and each of PBRELF, BRELF II, BRELF III, BRELF IV, MgCo I, MgCo II, MgCo III, and MgCo IV engaged Moss Adams LLP as its independent registered public accounting firm. CohnReznick’s reports on the financial statements of each of PBRELF and BRELF II as of and for the years ended December 31, 2017 and 2018 and of BRELF III as of and for the year ended December 31, 2018 did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. Furthermore, during the period described above, there have been no disagreements with CohnReznick on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to satisfaction of such firm, would have caused such firm to make reference to the subject matter of the disagreement in connection with its reports on audited financial statements for such period. CohnReznick has been provided a copy of this Form 8-K and requested to provide a letter addressed to the SEC stating whether or not CohnReznick agrees with the statements related to it made in this report. A copy of CohnReznick’s letter, dated November 19, 2019, is attached as Exhibit 16.2 to this Report.

On April 19, 2019, the Broadmark Companies engaged Moss Adams LLP as the independent registered public accounting firm for each of the Broadmark Companies. The termination of CohnReznick by PBRELF, BRELF II and BRELF III, and the engagement of Moss Adams LLP by each of the Broadmark Companies was approved by the managers of the Management Companies.

Except as set forth below, and in the financial statements related to the following entities included in the Prospectus and audited by Moss Adams LLP, there were no “reportable events” as that term is described in Item 304(a)(1)(v) of Regulation S-K. During the audits of the financial statements of PBRELF, BRELF II, BRELF III, BRELF IV, MgCo I, MgCo II, MgCo III, and MgCo IV included in the Prospectus, Moss Adams LLP noted deficiencies within the financial closing and reporting process due to lack of segregation of duties, including access controls of information technology over sensitive and critical financial information, lack of review procedures over financial information and inadequate documentation of policies and procedures over the identification of technical accounting matters, and related documentation addressing accounting matters. With respect to the audits of PBRELF, BRELF II, BRELF III, and BRELF IV, the lack of controls contributed to certain proposed audit adjustments related to deferred fees and missing or incomplete disclosures related to equity structure/share counts, credit quality disclosures and cash flow statements in the footnotes to the financial statements. As such, Moss Adams LLP identified material weaknesses in the internal control over financial close reporting process. With respect to MgCo I, MgCo II, MgCo III, and MgCo IV, the lack of controls contributed to the inability to record certain material adjustments to the financial statements related to cash and related party reclassifications, compensation expense and completeness and accuracy and/or missing or incomplete disclosures related to certain statements related to equity structure/share count. As such, Moss Adams LLP has identified material weaknesses in the internal control over financial close reporting process. The Company intends to take steps to remediate these material weaknesses, including enlisting the help of external advisors to provide assistance in the areas of internal controls and generally accepted accounting principles (“GAAP”) in the short term, and are evaluating the longer-term resource needs of its accounting staff, including GAAP expertise. These remediation measures may be time consuming and costly, and might place significant demands on its financial, accounting and operational resources. In addition, there is no assurance that the Company will be successful in hiring any necessary finance and accounting personnel in a timely manner, or at all.

Financial Statements and Exhibits.

Reference is also made to the disclosure set forth under Item 9.01 of this Report concerning the financial information of the Company.

Item 3.01.

Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On November 14, 2019, in connection with the closing of the Business Combination and at the request of Trinity, the Nasdaq Capital Market filed a notification of removal from listing on Form 25 with the Commission with respect to the Trinity Class A Common Stock, the Trinity Warrants and the Trinity Units.

Item 3.02.

Unregistered Sales of Equity Securities.

The information set forth in the “Introductory Note” of this Report and in Item 2.01 with respect to the issuance of Broadmark Realty Common Stock and Company Public Warrants in the Business Combination pursuant to the Merger Agreement and the PIPE Investment are incorporated herein by reference.

The Broadmark Realty Common Stock and Company Public Warrants issued in connection with the PIPE Investment were not registered under the Securities Act in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.

Item 3.03.

Material Modification to Rights of Security Holders.

The information set forth under “Item 2.01. Completion of Acquisition or Disposition of Assets” is incorporated in this Item 3.03 by reference.

The material terms of the Initial Warrant Amendment are discussed in the Prospectus under the section titled “Proposals to be Considered by Trinity’s Warrant Holders—Warrant Holder Proposal 1: The Warrant Amendment Proposal,” which is incorporated herein by reference.

This summary is qualified in its entirety by reference to the text of the Warrant Amendments, which are included as Exhibits 4.3 and 4.4 to this Report and are incorporated herein by reference.

Item 4.01.

Changes in Registrant’s Certifying Accountant.

The information set forth under “Item 2.01. Completion of Acquisition or Disposition of Assets” is incorporated in this Item 4.01 by reference.

Item 5.01.

Changes in Control of Registrant.

The description of the Business Combination and the Merger Agreement in the Prospectus in the sections entitled “Summary of the Joint Proxy Statement/Prospectus—Parties to the Business Combination” beginning on page 1 of the Prospectus, “Summary of the Joint Proxy Statement/Prospectus—The Business Combination” beginning on page 2 of the Prospectus, “The Business Combination” beginning on page 62, and “The Merger Agreement” beginning on page 87 of the Prospectus, is incorporated herein by reference. The information set forth above in the “Introductory Note” and in Item 2.01 to this Report are also incorporated herein by reference.

Immediately after the Closing, the Company had 132,014,635 shares of Broadmark Realty Common Stock outstanding, 41,674,613 Company Public Warrants outstanding and 5,186,676 Company Private Placement warrants outstanding. Together, the former holders of membership interest in the Company Group entities beneficially own approximately 70.76% of the shares of Broadmark Realty Common Stock outstanding. Of that amount approximately 66.10% is beneficially owned by former preferred unit holders of the Company Group and approximately 4.66% is beneficially owned by former principals or insiders of the Company Group. The Trinity Sponsor beneficially owns approximately 3.65% of the shares of Broadmark Realty Common Stock issued and outstanding (or 7.30% of the shares of Broadmark Realty Common Stock, if including 5,186,676 shares of Broadmark Realty Common Stock that may be issued in connection with the exercise of the 5,186,676 Private Placement Warrants).

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The information set forth above in the sections titled “Directors and Executive Officers,” “Certain Relationships and Related Transactions, and Director Independence,” and “Executive Compensation” in Item 2.01 and the section titled “Executive Employment Agreements” in Item 1.01 are incorporated herein by reference.

Certain transactions between the Company or its affiliates and certain of its directors and officers are described in the Prospectus in the section entitled “Certain Relationships and Related Person Transactions” beginning on page 300 of the Prospectus, which is incorporated herein by reference, and the Company’s Current Report on Form 8-K filed on October 31, 2019.

Item 5.03.

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On November 14, 2019, the Board and Company’s sole stockholder, Trinity, approved and adopted the Articles of Amendment and Restatement of the Company (the “Existing Charter”) and the Amended and Restated Bylaws of the Company (the “Existing Bylaws”), each effective as of the time immediately prior to the effective time of the Trinity Merger. Complete copies of the Existing Charter and Existing Bylaws are attached to this Report as Exhibits 3.1 and 3.2, respectively.

The information set forth in Item 3.03 of this Report is incorporated by reference in this Item 5.03.

Item 5.06.

Change in Shell Company Status.

As a result of the completion of the Business Combination, the Company ceased to be a shell company (as defined under Rule 405 of the Exchange Act) as of the Closing Date. Reference is made to the disclosure set forth in the Prospectus in the section entitled “Proposals to be Considered by Trinity’s Stockholders—Proposal No. 1—Approval of the Business Combination and Issuance of Shares of Broadmark Realty Common Stock,” which is incorporated herein by reference. The information set forth in the “Introductory Note” and in Item 2.01 of this Report are incorporated by reference into this Item 5.06.

Item 7.01.

Regulation FD Disclosure.

On November 14, 2019, the Company issued a press release announcing the consummation of the Business Combination, which is included in this Report as Exhibit 99.1.

Item 8.01.

Other Events.

As a result of the Mergers and by operation of Rule 12g-3(a) promulgated under the Exchange Act, the Company is a successor issuer to Trinity. The Company hereby reports this succession in accordance with Rule 12g‑3(f) under the Exchange Act.

Item 9.01.

Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

In accordance with Item 9.01(a), the audited financial statements for the year ended December 31, 2018, 2017 and 2016, for PBRELF I, LLC, BRELF II, LLC, BRELF III, LLC, BRELF IV, LLC, Pyatt Broadmark Management, LLC, Broadmark Real Estate Management II, LLC, Broadmark Real Estate Management III, LLC, and Broadmark Real Estate Management IV, LLC, included in the Prospectus beginning on page F-17 are incorporated herein by reference, and the Company’s unaudited financial statements for the nine months ended September 30, 2019 are attached to this Report as Exhibit 99.2 hereto.

(b) Pro Forma Financial Information.

In accordance with Item 9.01(b), unaudited pro forma condensed combined financial statements for the year ended December 31, 2018, included in the Prospectus beginning on page F-1 are incorporated herein by reference, and the Company’s unaudited pro forma condensed combined financial statements for the nine months ended September 30, 2019 are attached to this Report as Exhibit 99.3 hereto.

(d) List of Exhibits.

Exhibit Number	Description
2.1†	Agreement and Plan of Merger, dated August 9, 2019, by and among Trinity Merger Corp., Broadmark Realty Capital Inc., Trinity Merger Sub I, Inc., Trinity Merger Sub II, LLC, PBRELF I, LLC, BRELF II, LLC, BRELF III, LLC, BRELF IV, LLC, Pyatt Broadmark Management, LLC, Broadmark Real Estate Management II, LLC, Broadmark Real Estate Management III, LLC, and Broadmark Real Estate Management IV, LLC (incorporated by reference to Annex A to the joint proxy statement/prospectus contained in the Company’s Amendment No. 2 to the registration statement on Form S-4 (File No. 333-233214), filed with the Commission on October 15, 2019).
3.1	Articles of Amendment and Restatement of Broadmark Realty Capital Inc.
3.2	Amended and Restated Bylaws of Broadmark Realty Capital Inc.
4.1	Specimen Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-A12B (File No. 001-39134), filed with the Commission on November 14, 2019).
4.2	Specimen Warrant Certificate (incorporated by reference to Exhibit 4.2 to the Company’s Form 8-A12B (File No. 001-39134), filed with the Commission on November 14, 2019).
4.3	Warrant Agreement, dated as of May 14, 2018, between Trinity Merger Corp. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.3 to the Company’s Form 8-A12B (File No. 001-39134), filed with the Commission on November 14, 2019).
4.4	Amendment to Warrant Agreement, dated November 14, 2019, by and between Broadmark Realty Capital Inc. and Continental Stock Transfer & Trust Co.
4.5	Second Amendment to Warrant Agreement, dated November 14, 2019, by and among Broadmark Realty Capital Inc., Continental Stock Transfer & Trust Co., and American Stock Transfer & Trust Company, LLC.
10.1	Employment Agreement, dated August 9, 2019, by and between Broadmark Realty Capital Inc. and Jeffrey Pyatt.
10.2	Employment Agreement, dated November 14, 2019, by and between Broadmark Realty Capital Inc. and David Schneider.
10.3	Employment Agreement, dated August 9, 2019, by and between Broadmark Realty Capital Inc. and Joanne Van Sickle.
10.4	Employment Agreement, dated August 9, 2019, by and between Broadmark Realty Capital Inc. and Adam Fountain.
10.5	Form of Subscription Agreement, by and between Broadmark Realty Capital Inc., Trinity Merger Corp., Farallon Capital Partners, L.P., Farallon Capital Institutional Partners, L.P., Farallon Capital Institutional Partners II, L.P., Farallon Capital Institutional Partners III, L.P., Four Crossings Institutional Partners V, L.P., and Farallon Capital (AM) Investors, L.P.
10.6	Form of Amendment to Subscription Agreement, by and between Broadmark Realty Capital Inc., Trinity Merger Corp., Farallon Capital Partners, L.P., Farallon Capital Institutional Partners, L.P., Farallon Capital Institutional Partners II, L.P., Farallon Capital Institutional Partners III, L.P., Four Crossings Institutional Partners V, L.P., and Farallon Capital (AM) Investors, L.P.
10.7	Broadmark Realty Capital Inc. 2019 Stock Incentive Plan.
10.8	Form of Indemnification Agreement.
14.1	Code of Business Conduct and Ethics.
16.1	Letter from Ernst & Young LLP to the Securities and Exchange Commission.
16.2	Letter from CohnReznick LLP to the Securities and Exchange Commission.
99.1	Joint Press Release issued by Trinity Merger Corp. and the Broadmark real estate lending companies on November 14, 2019.
99.2	Financial Statements of Trinity Merger Corp., PBRELF I, LLC, BRELF II, LLC, BRELF III, LLC, BRELF IV, LLC, Pyatt Broadmark Management, LLC, Broadmark Real Estate Management II, LLC, Broadmark Real Estate Management III, LLC, and Broadmark Real Estate Management IV, LLC for the nine months ending September 30, 2019.
99.3	Unaudited Pro Forma Condensed Combined Financial Information of Broadmark Realty Capital Inc. for the nine months ending September 30, 2019.
99.4	Management’s Discussion and Analysis of Financial Condition and Results of Operations of PBRELF I, LLC, BRELF II, LLC, BRELF III, LLC, BRELF IV, LLC, Pyatt Broadmark Management, LLC, Broadmark Real Estate Management II, LLC, Broadmark Real Estate Management III, LLC, and Broadmark Real Estate Management IV, LLC for the nine months ending September 30, 2019.

__________

† The annexes, schedules, and certain exhibits to the Agreement and Plan of Merger have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BROADMARK REALTY CAPITAL INC.

	By:	/s/ Jeffrey Pyatt
		Name: Jeffrey Pyatt
		Title: Chief Executive Officer

Date: November 20, 2019

Exhibit 3.1

BROADMARK REALTY CAPITAL INC.

ARTICLES OF AMENDMENT AND RESTATEMENT

Broadmark Realty Capital Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland (the “SDAT”) that:

FIRST: The Corporation desires to amend and restate its charter as currently in effect and as hereinafter amended (the “Charter”).

SECOND: The provisions of the charter of the Corporation, which are now in effect and as amended hereby in accordance with the Maryland General Corporation Law, or any successor statute (the “MGCL”), are as follows:

ARTICLE I

INCORPORATOR

Jeffrey S. Barry, whose address is 55 Merchant Street, Suite 1500, Honolulu, Hawaii 96813, being at least 18 years of age, formed a corporation under the general laws of the State of Maryland on July 26, 2019.

ARTICLE II

NAME

The name of the Corporation is Broadmark Realty Capital Inc.

ARTICLE III

PURPOSE

The purposes for which the Corporation is formed are to engage in any lawful act or activity (including, without limitation or obligation, engaging in business as a REIT (as hereinafter defined) under the Internal Revenue Code of 1986, as amended, or any successor statute (the “Code”)) for which corporations may be organized under the general laws of the State of Maryland as now or hereafter in force. For purposes of the Charter, “REIT” means a real estate investment trust under Sections 856 through 860 of the Code or any successor provision.

ARTICLE IV

PRINCIPAL OFFICE IN MARYLAND AND RESIDENT AGENT

The address of the principal office of the Corporation in the State of Maryland is c/o CSC-Lawyers Incorporating Service Company, 7 St. Paul Street, Suite 820, Baltimore, Maryland 21202. The name and address of the resident agent of the Corporation in the State of Maryland are CSC-Lawyers Incorporating Service Company, 7 St. Paul Street, Suite 820, Baltimore, Maryland 21202. The resident agent is a Maryland corporation.

ARTICLE V

PROVISIONS FOR DEFINING, LIMITING AND REGULATING CERTAIN POWERS OF THE CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS

Section 5.1 Number of Directors. The business and affairs of the Corporation shall be managed under the direction of the board of directors of the Corporation (the “Board of Directors”). The number of directors of the Corporation shall be seven, which number may be increased or decreased only by the Board of Directors pursuant to the Bylaws of the Corporation as in effect from time to time (the “Bylaws”), but shall never be less than the minimum number required by the MGCL. The names of the directors who shall serve until the next annual meeting of stockholders and until their successors are duly elected and qualify are Joseph L. Schocken, Jeffrey B. Pyatt, Stephen G. Haggerty, Daniel J. Hirsch, Kevin M. Luebbers, Norma J. Lawrence, and David A. Karp.

Any vacancy on the Board of Directors may be filled in the manner provided in the Bylaws. The Corporation elects, at such time as it becomes eligible under Section 3-802 of the MGCL to make the election provided for under Section 3-804(c) of the MGCL, that, except as may be provided by the Board of Directors in setting the terms of any class or series of Preferred Stock (as defined in Section 6.1), any and all vacancies on the Board of Directors shall be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy shall serve for the remainder of the full term of the directorship in which such vacancy occurred and until his or her successor is duly elected and qualifies.

Section 5.2 Extraordinary Actions. Except as specifically provided in Section 5.8 (relating to removal of directors) and in the last sentence of Article VIII, notwithstanding any provision of law requiring any action to be taken or approved by the affirmative vote of the holders of shares entitled to cast a greater number of votes, any such action shall be effective and valid if declared advisable by the Board of Directors and taken or approved by the affirmative vote of holders of shares entitled to cast a majority of all the votes entitled to be cast on the matter.

Section 5.3 Authorization by Board of Stock Issuance. The Board of Directors may authorize the issuance from time to time of shares of stock of the Corporation of any class or series, whether now or hereafter authorized, or securities or rights convertible into shares of its stock of any class or series, whether now or hereafter authorized, for such consideration as the Board of Directors may deem advisable (or without consideration in the case of a stock split or stock dividend), subject to such restrictions or limitations, if any, as may be set forth in the Charter or the Bylaws.

Section 5.4 Preemptive Rights and Appraisal Rights. Except as may be provided by the Board of Directors in setting the terms of classified or reclassified shares of stock pursuant to Article VI or as may otherwise be provided by a contract approved by the Board of Directors, no holder of shares of stock of the Corporation shall, as such holder, have any preemptive right to purchase or subscribe for any additional shares of stock of the Corporation or any other security of the Corporation which it may issue or sell. Holders of shares of stock shall not be entitled to exercise any rights of an objecting stockholder provided for under Title 3, Subtitle 2 of the MGCL or any successor statute unless the Board of Directors, upon such terms and conditions as may be specified by the Board of Directors, determines that such rights apply, with respect to all or any shares of all or any classes or series of stock, to one or more transactions occurring after the date of such determination in connection with which holders of such shares would otherwise be entitled to exercise such rights.

Section 5.5 Indemnification. To the maximum extent permitted by Maryland law in effect from time to time, the Corporation shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, shall pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (a) any individual who is a present or former director or officer of the Corporation and who is made, or threatened to be made, a party to, or witness in, the proceeding by reason of his or her service in that capacity or (b) any individual who, while a director or officer of the Corporation and at the request of the Corporation, serves or has served as a director, officer, trustee, member, manager or partner of another corporation, real estate investment trust, limited liability company, partnership, joint venture, trust, employee benefit plan or any other enterprise and who is made, or threatened to be made, a party to, or witness in, the proceeding by reason of his or her service in that capacity. The rights to indemnification and advance of expenses provided by this Section 5.5 shall vest immediately upon election of a director or officer. The Corporation may, with the approval of the Board of Directors, provide such indemnification and advance of expenses to an individual who served a predecessor of the Corporation in any of the capacities described in (a) or (b) above and to any employee or agent of the Corporation or a predecessor of the Corporation. The indemnification and payment or reimbursement of expenses provided in this Section 5.5 shall not be deemed exclusive of or limit in any way other rights to which any person seeking indemnification or payment or reimbursement of expenses may be or may become entitled under any bylaw, resolution, insurance, agreement or otherwise.

Neither the amendment nor repeal of this Section 5.5, nor the adoption or amendment of any other provision of this Charter or the Bylaws inconsistent with this Section 5.5, shall apply to or affect in any respect the applicability of the preceding paragraph with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

Section 5.6 Determinations by Board. The determination as to any of the following matters, made by or pursuant to the direction of the Board of Directors, shall be final and conclusive and shall be binding upon the Corporation and every holder of shares of its stock: the amount of the net income of the Corporation for any period and the amount of assets at any time legally available for the payment of dividends, acquisition of its stock or the payment of other distributions on its stock; the amount of paid‑in surplus, net assets, other surplus, cash flow, funds from operations, adjusted funds from operations, net profit, net assets in excess of capital, undivided profits or excess of profits over losses on sales of assets; the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created shall have been set aside, paid or discharged); any interpretation or resolution of any ambiguity with respect to any provision of the Charter (including any of the terms, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of any shares of any class or series of stock of the Corporation) or of the Bylaws; the number of shares of stock of any class or series of the Corporation; the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Corporation or of any shares of stock of the Corporation; any matter relating to the acquisition, holding and disposition of any assets by the Corporation; any interpretation of the terms and conditions of one or more agreements with any person, corporation, association, company, trust, partnership (limited or general) or other entity; the compensation of directors, officers, employees or agents of the Corporation; or any other matter relating to the business and affairs of the Corporation or required or permitted by applicable law, the Charter or Bylaws or otherwise to be determined by the Board of Directors.

Section 5.7 REIT Qualification. The Board of Directors, without any action by the stockholders of the Corporation, shall have the authority to cause the Corporation to elect to qualify as a REIT for federal income tax purposes. Following any such election, if the Board of Directors determines that it is no longer in the best interests of the Corporation to attempt to, or continue to, qualify as a REIT for federal income tax purposes, the Board of Directors, without any action by the stockholders of the Corporation, may revoke or otherwise terminate the Corporation’s REIT election pursuant to Section 856(g) of the Code. In addition, the Board of Directors, without any action by the stockholders of the Corporation, shall have and may exercise, on behalf of the Corporation, without limitation, the power to determine that compliance with any restriction or limitation on stock ownership and transfers set forth in Article VII hereof is no longer required.

Section 5.8 Removal of Directors. Subject to the rights of holders of one or more classes or series of Preferred Stock to elect or remove one or more directors, any director, or the entire Board of Directors, may be removed from office at any time, but only for cause, and then only by the affirmative vote of holders of shares entitled to cast at least two-thirds of all the votes entitled to be cast generally in the election of directors. For the purpose of this paragraph, “cause” shall mean, with respect to any particular director, conviction of a felony or a final judgment of a court of competent jurisdiction holding that such director caused demonstrable, material harm to the Corporation through bad faith or active and deliberate dishonesty.

Section 5.9 Subtitle 8. In accordance with Section 3-802(c) of the MGCL, the Corporation is prohibited from electing to be subject to the provisions of Sections 3-803 of the MGCL, unless such election is approved by the affirmative vote of a majority of the votes cast on the matter by stockholders entitled to vote generally in the election of directors.

Section 5.10 Corporate Opportunities. The Corporation shall have the power, by resolution of the Board of Directors, to renounce any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, business opportunities or classes or categories of business opportunities that are presented to the Corporation or developed by or presented to one or more directors or officers of the Corporation.

ARTICLE VI

STOCK

Section 6.1 Authorized Shares. The Corporation has authority to issue 600,000,000 shares of stock, consisting of 500,000,000 shares of Common Stock, $0.001 par value per share (“Common Stock”), and 100,000,000 shares of Preferred Stock, $0.001 par value per share (“Preferred Stock”). The aggregate par value of all authorized shares of stock having par value is $600,000. If shares of one class or series of stock are classified or reclassified into shares of another class or series of stock pursuant to Section 6.2, Section 6.3 or Section 6.4 of this Article VI, the number of authorized shares of the former class or series shall be automatically decreased and the number of shares of the latter class or series shall be automatically increased, in each case by the number of shares so classified or reclassified, so that the aggregate number of shares of stock of all classes and series that the Corporation has authority to issue shall not be more than the total number of shares of stock set forth in the first sentence of this Section 6.1. The Board of Directors, with the approval of a majority of the entire Board of Directors, and without any action by the stockholders of the Corporation, may amend the Charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that the Corporation has authority to issue.

Section 6.2 Common Stock. Subject to the provisions of Article VII and except as may otherwise be specified in the Charter, each share of Common Stock shall entitle the holder thereof to one vote. The Board of Directors may reclassify any unissued shares of Common Stock from time to time into one or more classes or series of stock, including Preferred Stock.

Section 6.3 Preferred Stock. The Board of Directors may classify any unissued shares of Preferred Stock and reclassify any previously classified but unissued shares of Preferred Stock of any class or series from time to time, into one or more classes or series of stock.

Section 6.4 Classified or Reclassified Shares. Prior to the issuance of classified or reclassified shares of any class or series of stock, the Board of Directors by resolution shall: (a) designate that class or series to distinguish it from all other classes and series of stock of the Corporation; (b) specify the number of shares to be included in the class or series; (c) set or change, subject to the provisions of Article VII and subject to the express terms of any class or series of stock of the Corporation outstanding at the time, the preferences, conversion or other rights, voting powers (including voting rights exclusive to such class or series), restrictions (including, without limitation, restrictions on transferability), limitations as to dividends or other distributions, qualifications and terms and conditions of redemption for each class or series; and (d) cause the Corporation to file articles supplementary with the SDAT. Any of the terms of any class or series of stock set or changed pursuant to clause (c) of this Section 6.4 may be made dependent upon facts or events ascertainable outside the Charter (including determinations by the Board of Directors or other facts or events within the control of the Corporation) and may vary among holders thereof, provided that the manner in which such facts, events or variations shall operate upon the terms of such class or series of stock is clearly and expressly set forth in the articles supplementary or other Charter document.

Section 6.5 Action by Stockholders. Any action required or permitted to be taken at any meeting of the holders of Common Stock entitled to vote generally in the election of directors may be taken without a meeting by unanimous consent, in writing or by electronic transmission.

Section 6.6 Charter and Bylaws. The rights of all stockholders and the terms of all stock are subject to the provisions of the Charter and the Bylaws.

ARTICLE VII

RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES

Section 7.1 Definitions. For the purpose of this Article VII, the following terms shall have the following meanings:

Beneficial Ownership. The term “Beneficial Ownership” shall mean ownership of Capital Stock by a Person, whether the interest in the shares of Capital Stock is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms “Beneficial Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.

Business Day. The term “Business Day” shall mean any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close.

Capital Stock. The term “Capital Stock” shall mean all classes or series of stock of the Corporation, including, without limitation, Common Stock and Preferred Stock.

Charitable Beneficiary. The term “Charitable Beneficiary” shall mean one or more beneficiaries of the Trust as determined pursuant to Section 7.3.6, provided that each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.

Constructive Ownership. The term “Constructive Ownership” shall mean ownership of Capital Stock by a Person, whether the interest in the shares of Capital Stock is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. The terms “Constructive Owner,” “Constructively Owns” and “Constructively Owned” shall have the correlative meanings.

Excepted Holder. The term “Excepted Holder” shall mean a stockholder of the Corporation for whom an Excepted Holder Limit is created by the Charter or by the Board of Directors pursuant to Section 7.2.7.

Excepted Holder Limit. The term “Excepted Holder Limit” shall mean, provided that the affected Excepted Holder agrees to comply with the requirements established by the Board of Directors pursuant to Section 7.2.7 and subject to adjustment pursuant to Section 7.2.7, the percentage limit established by the Board of Directors pursuant to Section 7.2.7.

Initial Date. The term “Initial Date” shall mean the date upon which the Articles of Amendment and Restatement containing this Article VII are accepted for record by the SDAT.

Market Price. The term “Market Price” on any date shall mean, with respect to any class or series of outstanding shares of Capital Stock, the Closing Price for such Capital Stock on such date. The “Closing Price” on any date shall mean the last sale price for such Capital Stock, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, for such Capital Stock, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the Stock Exchange or, if such Capital Stock is not listed or admitted to trading on a Stock Exchange, as reported on the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such Capital Stock is listed or admitted to trading or, if such Capital Stock is not listed or admitted to trading on any national securities exchange, the last quoted price, or, if not so quoted on such day, the average of the high bid and low asked prices in the over-the-counter market, as reported by the principal automated quotation system that may then be in use or, if such Capital Stock is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such Capital Stock selected by the Board of Directors or, in the event that no trading price is available for such Capital Stock, the fair market value of the Capital Stock, as determined by the Board of Directors.

Ownership Limit. The term “Ownership Limit” shall mean 9.8 percent, in value or in number of shares, whichever is more restrictive, of the outstanding shares of any class or series of Capital Stock, or such other percentage determined by the Board of Directors in accordance with Section 7.2.8, excluding any outstanding shares of Capital Stock not treated as outstanding for federal income tax purposes.

Person. The term “Person” shall mean an individual, corporation, partnership, limited liability company, estate, trust (including a trust qualified under Sections 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity and also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, and a group to which an Excepted Holder Limit applies.

Prohibited Owner. The term “Prohibited Owner” shall mean, with respect to any purported Transfer, any Person who, but for the provisions of this Article VII, would Beneficially Own or Constructively Own shares of Capital Stock in violation of Section 7.2.1, and if appropriate in the context, shall also mean any Person who would have been the record owner of the shares of Capital Stock that the Prohibited Owner would have so owned.

Restriction Termination Date. The term “Restriction Termination Date” shall mean the first day after the Initial Date on which the Board of Directors determines pursuant to Section 5.7 of the Charter that it is no longer in the best interests of the Corporation to attempt to, or continue to, qualify as a REIT or, with respect to one or more restrictions and limitations on Beneficial Ownership, Constructive Ownership and Transfers of shares of Capital Stock set forth herein, that compliance with such restrictions and limitations on Beneficial Ownership, Constructive Ownership and Transfers of shares of Capital Stock set forth herein is no longer required in order for the Corporation to qualify as a REIT.

Stock Exchange. The term “Stock Exchange” shall mean the national securities exchange upon which the shares of Common Stock are listed for trading.

Transfer. The term “Transfer” shall mean any issuance, sale, transfer, gift, assignment, devise or other disposition, as well as any other event that causes any Person to acquire Beneficial Ownership or Constructive Ownership, or any agreement to take any such action or cause any such event, of Capital Stock or the right to vote or receive dividends on Capital Stock, including (a) the granting or exercise of any option (or any disposition of any option), (b) any disposition of any securities or rights convertible into or exchangeable for Capital Stock or any interest in Capital Stock or any exercise of any such conversion or exchange right and (c) Transfers of interests in or with respect to other Persons that result in changes in Beneficial Ownership or Constructive Ownership of Capital Stock; in each case, whether voluntary or involuntary, whether owned of record, Constructively Owned or Beneficially Owned and whether by operation of law or otherwise. The terms “Transferring” and “Transferred” shall have the correlative meanings.

Trust. The term “Trust” shall mean any trust provided for in Section 7.3.1.

Trustee. The term “Trustee” shall mean the Person unaffiliated with the Corporation and a Prohibited Owner that is appointed by the Corporation to serve as trustee of the Trust.

Section 7.2 Capital Stock.

Section 7.2.1 Ownership Limitations. During the period commencing on the Initial Date and prior to the Restriction Termination Date, but subject to Section 7.4:

(a) Basic Restrictions.

(i) (1) No Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own shares of any class or series of Capital Stock in excess of the Ownership Limit and (2) no Excepted Holder shall Beneficially Own or Constructively Own shares of Capital Stock in excess of the Excepted Holder Limit for such Excepted Holder.

(ii) No Person shall Beneficially Own or Constructively Own shares of Capital Stock to the extent that such Beneficial Ownership or Constructive Ownership of Capital Stock would result in the Corporation being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year), or otherwise failing to qualify as a REIT (including, without limitation, Beneficial Ownership or Constructive Ownership that would result in the Corporation owning (actually or constructively through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Corporation from such tenant would cause the Corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code).

(iii) Any Transfer of shares of Capital Stock that, if effective, would result in the Capital Stock being beneficially owned by less than 100 Persons (determined under the principles of Section 856(a)(5) of the Code) shall be void ab initio, and the intended transferee shall acquire no rights in such shares of Capital Stock.

(b) Transfer in Trust. If any Transfer of shares of Capital Stock or other event occurs which, if effective, would result in any Person Beneficially Owning or Constructively Owning shares of Capital Stock in violation of Section 7.2.1(a)(i) or (ii),

(i) then that number of shares of the Capital Stock the Beneficial Ownership or Constructive Ownership of which otherwise would cause such Person to violate Section 7.2.1(a)(i) or (ii) (rounded up to the nearest whole share) shall be automatically transferred to a Trust for the benefit of a Charitable Beneficiary, as described in Section 7.3, effective as of the close of business on the Business Day prior to the date of such Transfer or other event, and such Person shall acquire no rights in such shares; or

(ii) if the transfer to the Trust described in clause (i) of this sentence would not be effective for any reason to prevent the violation of Section 7.2.1(a)(i) or (ii), then the Transfer of that number of shares of Capital Stock that otherwise would cause any Person to violate Section 7.2.1(a)(i) or (ii) shall be void ab initio, and the intended transferee shall acquire no rights in such shares of Capital Stock.

(iii) To the extent that, upon a transfer of shares of Capital Stock pursuant to this Section 7.2.1(b), a violation of any provision of this Article VII would nonetheless be continuing (for example where the ownership of shares of Capital Stock by a single Trust would violate the 100 stockholder requirement applicable to REITs), then shares of Capital Stock shall be transferred to that number of Trusts, each having a distinct Trustee and a Charitable Beneficiary or Charitable Beneficiaries that are distinct from those of each other Trust, such that there is no violation of any provision of this Article VII.

Section 7.2.2 Remedies for Breach. If the Board of Directors shall at any time determine that a Transfer or other event has taken place that results in a violation of Section 7.2.1 or that a Person intends to acquire or has attempted to acquire Beneficial Ownership or Constructive Ownership of any shares of Capital Stock in violation of Section 7.2.1 (whether or not such violation is intended), the Board of Directors shall take such action as it deems advisable to refuse to give effect to or to prevent such Transfer or other event, including, without limitation, causing the Corporation to redeem shares, refusing to give effect to such Transfer on the books of the Corporation or instituting proceedings to enjoin such Transfer or other event; provided, however, that any Transfer or attempted Transfer or other event in violation of Section 7.2.1 shall automatically result in the transfer to the Trust described above, and, where applicable, such Transfer (or other event) shall be void ab initio as provided above irrespective of any action (or non-action) by the Board of Directors.

Section 7.2.3 Notice of Restricted Transfer. Any Person who acquires or attempts or intends to acquire Beneficial Ownership or Constructive Ownership of shares of Capital Stock that will or may violate Section 7.2.1(a) or any Person who would have owned shares of Capital Stock that resulted in a transfer to the Trust pursuant to the provisions of Section 7.2.1(b) shall immediately give written notice to the Corporation of such event or, in the case of such a proposed or attempted transaction, give at least 15 days prior written notice, and shall provide to the Corporation such other information as the Corporation may request, including in order to determine the effect, if any, of such Transfer on the Corporation’s status as a REIT.

Section 7.2.4 Owners Required To Provide Information. From the Initial Date and prior to the Restriction Termination Date:

(a) every owner of five percent or more (or such lower percentage as required by the Code or the Treasury Regulations promulgated thereunder) of the outstanding shares of Capital Stock, within 30 days after the end of each taxable year, shall give written notice to the Corporation stating the name and address of such owner, the number of shares of Capital Stock Beneficially Owned and a description of the manner in which such shares are held. Each such owner shall provide to the Corporation such additional information as the Corporation may request in order to determine the effect, if any, of such Beneficial Ownership on the Corporation’s status as a REIT and to ensure compliance with the Ownership Limit; and

(b) each Person who is a Beneficial Owner or Constructive Owner of Capital Stock and each Person (including the stockholder of record) who is holding Capital Stock for a Beneficial Owner or Constructive Owner shall provide to the Corporation such information as the Corporation may request, in order to determine the Corporation’s status as a REIT, to comply with the requirements of any taxing authority or governmental authority, or to determine such compliance.

Section 7.2.5 Remedies Not Limited. Subject to Section 5.7 of the Charter, nothing contained in this Section 7.2 shall limit the authority of the Board of Directors to take such other action as it deems necessary or advisable to protect the Corporation in preserving the Corporation’s status as a REIT.

Section 7.2.6 Ambiguity. In the case of an ambiguity in the application of any of the provisions of this Article VII, the Board of Directors may determine the application of the provisions of this Article VII with respect to any situation based on the facts known to it. In the event Section 7.2 or Section 7.3 requires an action by the Board of Directors and the Charter fails to provide specific guidance with respect to such action, the Board of Directors may determine the action to be taken so long as such action is not contrary to the provisions of Sections 7.1, 7.2 or 7.3. Absent a decision to the contrary by the Board of Directors, if a Person would have (but for the remedies set forth in Section 7.2.2) Beneficial Ownership or Constructive Ownership of Capital Stock in violation of Section 7.2.1, such remedies (as applicable) shall apply first to the shares of Capital Stock that, but for such remedies, would have been actually owned by such Person, and second to the shares of Capital Stock which, but for such remedies, would have been Beneficially Owned or Constructively Owned (but not actually owned) by such Person, pro rata among the Persons who actually own such shares of Capital Stock based upon the relative number of the shares of Capital Stock held by each such Person.

Section 7.2.7 Exceptions.

(a) Subject to Section 7.2.1(a)(ii), the Board of Directors may exempt (prospectively or retroactively) a Person from the Ownership Limit and may establish or increase an Excepted Holder Limit for such Person if:

(i) the Board of Directors obtains such representations and undertakings from such Person as the Board of Directors deems reasonably necessary, including to ascertain that no Person’s Beneficial Ownership or Constructive Ownership of such shares of Capital Stock in excess of the Ownership Limit will violate Section 7.2.1(a)(ii) or would otherwise cause the Corporation to fail to qualify as a REIT; and

(ii) such Person agrees that any violation or attempted violation of such representations or undertakings (or other action which is contrary to the restrictions contained in Sections 7.2.1 through 7.2.6) will result in such shares of Capital Stock being automatically transferred to a Trust in accordance with Sections 7.2.1(b) and 7.3.

(b) Prior to granting any exception pursuant to Section 7.2.7(a), the Board of Directors may require a ruling from the Internal Revenue Service, or an opinion of counsel, in either case in form and substance satisfactory to the Board of Directors, as it may deem necessary or advisable in order to protect, determine or ensure the Corporation’s status as a REIT. Notwithstanding the receipt of any ruling or opinion, the Board of Directors may impose such conditions or restrictions as it deems appropriate in connection with granting such exception.

(c) Subject to Section 7.2.1(a)(ii), an underwriter which participates in a public offering, forward sale or a private placement of Capital Stock (or securities convertible into or exchangeable for Capital Stock) may Beneficially Own or Constructively Own shares of Capital Stock (or securities convertible into or exchangeable for Capital Stock) in excess of the Ownership Limit, but only to the extent necessary to facilitate such public offering, forward sale or private placement.

(d) The Board of Directors may only reduce the Excepted Holder Limit for an Excepted Holder: (1) with the written consent of such Excepted Holder at any time, or (2) pursuant to the terms and conditions of the agreements and undertakings entered into with such Excepted Holder in connection with the establishment of the Excepted Holder Limit for that Excepted Holder. No Excepted Holder Limit shall be reduced to a percentage that is less than the Ownership Limit.

Section 7.2.8 Increase or Decrease in Ownership Limits. Subject to Section 7.2.1(a)(ii) and this Section 7.2.8, the Board of Directors may from time to time increase or decrease the Ownership Limit with regard to any class or series of Capital Stock for one or more Persons and increase or decrease the Ownership Limit with regard to any class or series of Capital Stock for all other Persons. No decreased Ownership Limit will be effective for any Person whose percentage of ownership of Capital Stock is in excess of such decreased Ownership Limit until such time as such Person’s percentage of ownership of Capital Stock equals or falls below the decreased Ownership Limit; provided, however, any further increase in ownership of Capital Stock by any such Person (other than a Person for whom an exemption has been granted pursuant to Section 7.2.7(a) or an Excepted Holder) in excess of the Capital Stock owned by such person on the date the decreased Ownership Limit became effective will be in violation of the Ownership Limit. No increase to the Ownership Limit may be approved if the new Ownership Limit would allow five or fewer individuals (as defined in Section 542(a)(2) of the Code and taking into account all Excepted Holders) to Beneficially Own in the aggregate more than 49.9% in value of the outstanding Capital Stock or would otherwise cause the Corporation to fail to qualify as a REIT.

Section 7.2.9 Legend. Each certificate for shares of Capital Stock, if certificated, shall bear substantially the following legend:

The shares represented by this certificate are subject to restrictions on Beneficial Ownership and Constructive Ownership and Transfer for the purpose, among others, of the Corporation’s maintenance of its status as a Real Estate Investment Trust under the Internal Revenue Code of 1986, as amended (the “Code”). Subject to certain further restrictions and except as expressly provided in the Corporation’s Charter, (i) no Person may Beneficially Own or Constructively Own shares of any class or series of Capital Stock of the Corporation in excess of the Ownership Limit, unless such Person is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (ii) no Person may Beneficially Own or Constructively Own Capital Stock that would result in the Corporation being “closely held” under Section 856(h) of the Code or otherwise cause the Corporation to fail to qualify as a REIT; and (iii) no Person may Transfer shares of Capital Stock if such Transfer would result in the Capital Stock of the Corporation being owned by fewer than 100 Persons. Any Person who Beneficially Owns or Constructively Owns or attempts or intends to Beneficially Own or Constructively Own shares of Capital Stock which cause or will cause a Person to Beneficially Own or Constructively Own shares of Capital Stock in excess or in violation of the above limitations must immediately notify the Corporation. If any of the restrictions on transfer or ownership provided in (i), (ii) or (iii) above are violated, the shares of Capital Stock in excess or in violation of such limitations will be automatically transferred to a Trustee of a Trust for the benefit of one or more Charitable Beneficiaries. In addition, the Corporation may redeem shares upon the terms and conditions specified by the Board of Directors in its sole and absolute discretion if the Board of Directors determines that ownership or a Transfer or other event may violate the restrictions described above. Furthermore, if the ownership restrictions provided in (iii) above would be violated or upon the occurrence of certain events, attempted Transfers in violation of the restrictions described above may be void ab initio. All capitalized terms in this legend have the meanings defined in the Charter of the Corporation, a copy of which, including the restrictions on transfer and ownership, will be furnished to each holder of shares of Capital Stock of the Corporation on request and without charge. Requests for such a copy may be directed to the Secretary of the Corporation at its Principal Office.

Instead of the foregoing legend, the certificate or any notice in lieu of a certificate may state that the Corporation will furnish a full statement about certain restrictions on ownership and transfer of the shares of Capital Stock to a stockholder on request and without charge.

Section 7.3 Transfer of Capital Stock in Trust.

Section 7.3.1 Ownership in Trust. Upon any purported Transfer or other event described in Section 7.2.1(b) that would result in a transfer of shares of Capital Stock to a Trust, such shares of Capital Stock shall be deemed to have been transferred to the Trustee as trustee of a Trust for the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to be effective as of the close of business on the Business Day prior to the purported Transfer or other event that results in the transfer to the Trust pursuant to Section 7.2.1(b). Each Charitable Beneficiary shall be designated by the Corporation as provided in Section 7.3.6.

Section 7.3.2 Status of Shares Held by the Trustee. Shares of Capital Stock held by the Trustee shall be issued and outstanding shares of Capital Stock of the Corporation. The Prohibited Owner shall have no rights in the shares held by the Trustee. The Prohibited Owner shall not benefit economically from ownership of any shares held in trust by the Trustee, shall have no rights to dividends or other distributions and shall not possess any rights to vote or other rights attributable to the shares held in the Trust.

Section 7.3.3 Dividend and Voting Rights. The Trustee shall have all voting rights and rights to dividends or other distributions with respect to shares of Capital Stock held in the Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend or other distribution paid prior to the discovery by the Corporation that the shares of Capital Stock have been transferred to the Trustee shall be paid by the recipient of such dividend or other distribution to the Trustee upon demand and any dividend or other distribution authorized but unpaid shall be paid when due to the Trustee. Any dividend or other distribution so paid to the Trustee shall be held in trust for the Charitable Beneficiary. The Prohibited Owner shall have no voting rights with respect to shares of Capital Stock held in the Trust and, subject to Maryland law, effective as of the date that the shares of Capital Stock have been transferred to the Trust, the Trustee shall have the authority (at the Trustee’s sole and absolute discretion) (i) to rescind as void any vote cast by a Prohibited Owner prior to the discovery by the Corporation that the shares of Capital Stock have been transferred to the Trust and (ii) to recast such vote; provided, however, that if the Corporation has already taken irreversible corporate action, then the Trustee shall not have the authority to rescind and recast such vote. Notwithstanding the provisions of this Article VII, until the Corporation has received notification that shares of Capital Stock have been transferred into a Trust, the Corporation shall be entitled to rely on its stock transfer and other stockholder records for purposes of preparing lists of stockholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes and determining the other rights of stockholders.

Section 7.3.4 Sale of Shares by Trustee. Within 20 days of receiving notice from the Corporation that shares of Capital Stock have been transferred to the Trust, the Trustee of the Trust shall sell the shares held in the Trust to a person, designated by the Trustee, whose ownership of the shares will not violate the ownership limitations set forth in Section 7.2.1(a). Upon such sale, the interest of the Charitable Beneficiary in the shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner and to the Charitable Beneficiary as provided in this Section 7.3.4. The Prohibited Owner shall receive the lesser of (1) the price paid by the Prohibited Owner for the shares or, if the Prohibited Owner did not give value for the shares in connection with the event causing the shares to be held in the Trust (e.g., in the case of a gift, devise or other such transaction), the Market Price of the shares on the day of the event causing the shares to be held in the Trust and (2) the price per share received by the Trustee (net of any commissions and other expenses of sale) from the sale or other disposition of the shares held in the Trust. The Trustee may reduce the amount payable to the Prohibited Owner by the amount of dividends and distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Trustee pursuant to Section 7.3.3 of this Article VII. Any net sales proceeds in excess of the amount payable to the Prohibited Owner shall be immediately paid to the Charitable Beneficiary. If, prior to the discovery by the Corporation that shares of Capital Stock have been transferred to the Trustee, such shares are sold by a Prohibited Owner, then (i) such shares shall be deemed to have been sold on behalf of the Trust and (ii) to the extent that the Prohibited Owner received an amount for such shares that exceeds the amount that such Prohibited Owner was entitled to receive pursuant to this Section 7.3.4, such excess shall be paid to the Trustee upon demand.

Section 7.3.5 Purchase Right in Stock Transferred to the Trustee. Shares of Capital Stock transferred to the Trustee shall be deemed to have been offered for sale to the Corporation, or its designee, at a price per share equal to the lesser of (i) the price per share in the transaction that resulted in such transfer to the Trust (or, in the case of a devise or gift, the Market Price at the time of such devise or gift) and (ii) the Market Price on the date the Corporation, or its designee, accepts such offer. The Corporation may reduce the amount payable to the Prohibited Owner by the amount of dividends and distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Trustee pursuant to Section 7.3.3 of this Article VII. The Corporation may pay the amount of such reduction to the Trustee for the benefit of the Charitable Beneficiary. The Corporation shall have the right to accept such offer until the Trustee has sold the shares held in the Trust pursuant to Section 7.3.4. Upon such a sale to the Corporation, the interest of the Charitable Beneficiary in the shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner.

Section 7.3.6 Designation of Charitable Beneficiaries. By written notice to the Trustee, the Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary or Charitable Beneficiaries of the interest in the Trust such that (i) the shares of Capital Stock held in the Trust would not violate the restrictions set forth in Section 7.2.1(a) in the hands of such Charitable Beneficiary or Charitable Beneficiaries and (ii) each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code. Neither the failure of the Corporation to make such designation nor the failure of the Corporation to appoint the Trustee before the automatic transfer provided in Section 7.2.1(b) shall make such transfer ineffective, provided that the Corporation thereafter makes such designation and appointment.

Section 7.4 National Securities Exchange Transactions. Nothing in this Article VII shall preclude the settlement of any transaction entered into through the facilities any national securities exchange or automated inter-dealer quotation system. The fact that the settlement of any transaction occurs shall not negate the effect of any other provision of this Article VII and any transferee in such a transaction shall be subject to all of the provisions and limitations set forth in this Article VII.

Section 7.5 Enforcement. The Corporation is authorized specifically to seek equitable relief, including injunctive relief, to enforce the provisions of this Article VII.

Section 7.6 Non-Waiver. No delay or failure on the part of the Corporation or the Board of Directors in exercising any right hereunder shall operate as a waiver of any right of the Corporation or the Board of Directors, as the case may be, except to the extent specifically waived in writing.

ARTICLE VIII

AMENDMENTS

The Corporation reserves the right from time to time to make any amendment to the Charter, now or hereafter authorized by law, including any amendment altering the terms or contract rights, as expressly set forth in the Charter, of any shares of outstanding stock. All rights and powers conferred by the Charter on stockholders, directors and officers are granted subject to this reservation. Except as otherwise provided in the Charter and except for those amendments permitted to be made without stockholder approval under Maryland law or by specific provision in the Charter, any amendment to the Charter shall be valid only if declared advisable by the Board of Directors and approved by the affirmative vote of holders of shares entitled to cast a majority of all the votes entitled to be cast on the matter. Notwithstanding the foregoing, any amendment to Section 5.8 or to this sentence of the Charter shall be valid only if declared advisable by the Board of Directors and approved by the affirmative vote of holders of shares entitled to cast at least two-thirds of all the votes entitled to be cast on the matter.

ARTICLE IX

LIMITATION OF LIABILITY

To the maximum extent that Maryland law in effect from time to time permits limitation of the liability of directors and officers of a corporation, no present or former director or officer of the Corporation shall be liable to the Corporation or its stockholders for money damages. Neither the amendment nor repeal of this Article IX, nor the adoption or amendment of any other provision of the Charter or the Bylaws inconsistent with this Article IX, shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

THIRD: The amendment to and restatement of the Charter as hereinabove set forth have been duly advised by the Board of Directors and approved by the stockholders of the Corporation as required by law.

FOURTH: The current address of the principal office of the Corporation is as set forth in Article IV of the foregoing amendment and restatement of the Charter.

FIFTH: The name and address of the Corporation’s current resident agent are as set forth in Article IV of the foregoing amendment and restatement of the Charter.

SIXTH: The number of directors of the Corporation and the names of those currently in office are as set forth in Article V of the foregoing amendment and restatement of the Charter.

SEVENTH: The total number of shares of stock which the Corporation had authority to issue immediately prior to this amendment and restatement was 600,000,000 shares of Common Stock, $0.001 par value per share. The aggregate par value of all shares of stock having par value was $600,000.

EIGHTH: The total number of shares of stock which the Corporation has authority to issue pursuant to the foregoing amendment and restatement of the Charter is 600,000,000 shares of stock, consisting of 500,000,000 shares of Common Stock, $0.001 par value per share, and 100,000,000 shares of Preferred Stock, $0.001 par value per share. The aggregate par value of all authorized shares of stock having par value is $600,000.

NINTH: These Articles of Amendment and Restatement shall become effective at 11:10 AM Eastern Time on November 14, 2019.

TENTH: The undersigned officer acknowledges these Articles of Amendment and Restatement to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned officer acknowledges that, to the best of such officer’s knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment and Restatement to be signed in its name and on its behalf by its President and attested to by its Secretary on this 14^th day of November, 2019.

ATTEST:	BROADMARK REALTY CAPITAL INC.

/s/ Jeffrey S. Barry	By	/s/ Sean A. Hehir	(SEAL)
Name: Jeffrey S. Barry		Name: Sean A. Hehir
Title: Secretary		Title: President

Exhibit 3.2

BROADMARK REALTY CAPITAL INC.

AMENDED AND RESTATED BYLAWS

ARTICLE I

OFFICES

Section 1. Principal Office.

The principal office of Broadmark Realty Capital Inc. (the “Corporation”) in the State of Maryland shall be located at such place as the Board of Directors of the Corporation (the “Board of Directors”) may designate from time to time.

Section 2. Additional Offices.

The Corporation may have additional offices, including a principal executive office, at such places as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. Place.

All meetings of stockholders shall be held at the principal executive office of the Corporation or at such other place as shall be set in accordance with these Bylaws and stated in the notice of the meeting.

Section 2. Annual Meeting.

An annual meeting of stockholders for the election of directors and the transaction of any business as may properly be brought before the meeting shall be held on the date and at the time and place set by the Board of Directors.

Section 3. Special Meetings.

(a) General. Each of the Chairman of the Board of Directors, the Chief Executive Officer, the President and the Board of Directors may call a special meeting of stockholders. Except as provided in Section 3(b)(4) of this Article II, a special meeting of stockholders shall be held on the date and at the time and place set by whoever has called the meeting. Subject to Section 3(b) of this Article II, a special meeting of stockholders shall also be called by the Secretary of the Corporation to act on any matter that may properly be considered at a special meeting of stockholders upon the written request of stockholders entitled to cast a majority of all the votes entitled to be cast on such matter at such meeting.

(b) Stockholder-Requested Special Meetings. (1) Any stockholder of record seeking to have stockholders request a special meeting shall, by sending written notice in proper form to the Secretary of the Corporation (the “Record Date Request Notice”) at the principal executive office of the Corporation by registered mail, return receipt requested, request the Board of Directors to fix a record date to determine the stockholders entitled to request a special meeting (the “Request Record Date”). To be in proper form, the Record Date Request Notice shall (i) set forth the purpose of the meeting and the matters proposed to be acted on at it, (ii) be signed by one or more stockholders of record as of the date of signature (or their agents duly authorized in a writing accompanying the Record Date Request Notice), (iii) bear the date of signature of each such stockholder (or such agent) and (iv) set forth all information relating to each such stockholder and each matter proposed to be acted on at the special meeting that would be required to be disclosed in connection with the solicitation of proxies for the election of directors in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such a solicitation, in each case pursuant to Regulation l4A (or any successor provision) under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”). Upon receiving the Record Date Request Notice, the Board of Directors may fix a Request Record Date. The Request Record Date shall not precede and shall not be more than 10 days after the close of business on the date on which the resolution fixing the Request Record Date is adopted by the Board of Directors. If the Board of Directors, within 10 days after the date on which a valid Record Date Request Notice is received, fails to adopt a resolution fixing the Request Record Date, the Request Record Date shall be the close of business on the 10^th day after the first date on which such Record Date Request Notice is received by the Secretary.

(2) In order for any stockholder to request a special meeting to act on any matter that may properly be considered at a special meeting of stockholders, one or more written requests for a special meeting (collectively, the “Special Meeting Request”) in proper form and signed by stockholders of record (or their agents duly authorized in a writing accompanying the request) as of the Request Record Date entitled to cast not less than a majority of all of the votes entitled to be cast on such matter at such meeting (the “Special Meeting Percentage”) shall be delivered to the Secretary at the principal executive office of the Corporation. To be in proper form, the Special Meeting Request shall (a) set forth the purpose of the meeting and the matters proposed to be acted on at it (which shall be limited to those lawful matters set forth in the Record Date Request Notice received by the Secretary), including the text of the proposal or business (including the text of any resolutions proposed for consideration), (b) bear the date of signature of each such stockholder (or such agent) signing the Special Meeting Request, (c) set forth (i) the name and address, as they appear in the Corporation’s books, of each stockholder signing such request (or on whose behalf the Special Meeting Request is signed), (ii) the class, series and number of all shares of stock of the Corporation which are owned (beneficially or of record) by each such stockholder and (iii) the nominee holder for, and number of, shares of stock of the Corporation owned beneficially but not of record by such stockholder, (d) be sent to the Secretary by registered mail, return receipt requested, and (e) be received by the Secretary within 60 days after the Request Record Date. Any requesting stockholder (or agent duly authorized in a writing accompanying the revocation of the Special Meeting Request) may revoke his, her or its request for a special meeting at any time by written revocation delivered to the Secretary.

(3) The Secretary shall inform the requesting stockholders of the reasonably estimated cost of preparing and mailing or delivering the notice of the special meeting (including the Corporation’s proxy materials). The Secretary shall not be required to call a special meeting upon stockholder request and such meeting shall not be held unless, in addition to the documents required by Section 3(b)(2) of this Article II, the Secretary receives payment of such reasonably estimated cost prior to the preparation and mailing or delivery of such notice of the meeting.

(4) In the case of any special meeting called by the Secretary upon the request of stockholders (a “Stockholder-Requested Meeting”), such meeting shall be held at such place, date and time as may be designated by the Board of Directors; provided, however, that the date of any Stockholder-Requested Meeting shall be not more than 90 days after the record date for such meeting (the “Meeting Record Date”); and provided further that if the Board of Directors fails to designate, within 10 days after the date that a valid Special Meeting Request is actually received by the Secretary (the “Delivery Date”), a date and time for a Stockholder-Requested Meeting, then such meeting shall be held at 2:00 p.m., local time, on the 90^th day after the Meeting Record Date or, if such 90^th day is not a Business Day (as defined below), on the first preceding Business Day; and provided further that in the event that the Board of Directors fails to designate a place for a Stockholder-Requested Meeting within 10 days after the Delivery Date, then such meeting shall be held at the principal executive office of the Corporation. In fixing a date for a Stockholder-Requested Meeting, the Board of Directors may consider such factors as it deems relevant, including, without limitation, the nature of the matters to be considered, the facts and circumstances surrounding any request for the meeting and any plan of the Board of Directors to call an annual meeting or a special meeting. In the case of any Stockholder-Requested Meeting, if the Board of Directors fails to fix a Meeting Record Date that is a date within 30 days after the Delivery Date, then the close of business on the thirtieth day after the Delivery Date shall be the Meeting Record Date. The Board of Directors may revoke the notice for any Stockholder-Requested Meeting in the event that the requesting stockholders fail to comply with the provisions of Section 3(b)(3) of this Article II. Notwithstanding anything to the contrary in these Bylaws, the Board of Directors may submit its own proposal or proposals for consideration at any such special meeting.

(5) If written revocations of the Special Meeting Request have been delivered to the Secretary and the result is that stockholders of record (or their agents duly authorized in writing), as of the Request Record Date, entitled to cast less than the Special Meeting Percentage have delivered, and not revoked, requests for a special meeting on the matter to the Secretary: (i) if the notice of meeting has not already been sent to the stockholders of the Corporation, the Secretary shall refrain from sending the notice of the meeting and send to all requesting stockholders who have not revoked such requests written notice of any revocation of a request for a special meeting on the matter, or (ii) if the notice of meeting has been sent to the stockholders of the Corporation and if the Secretary first sends to all requesting stockholders who have not revoked requests for a special meeting on the matter written notice of any revocation of a request for the special meeting and written notice of the Corporation’s intention to revoke the notice of and to cancel the meeting or for the chairman of the meeting to adjourn the meeting without action on the matter, (A) the Secretary may revoke the notice of and cancel the meeting at any time before 10 days before the commencement of the meeting or (B) the chairman of the meeting may call the meeting to order and adjourn the meeting from time to time without acting on the matter. Any request for a special meeting received after a revocation by the Secretary of a notice of a meeting shall be considered a request for a new special meeting.

(6) The Chairman of the Board of Directors, the Chief Executive Officer, the President or the Board of Directors may appoint independent inspectors of elections to act as the agent of the Corporation for the purpose of promptly performing a ministerial review of the validity of any purported Special Meeting Request received by the Secretary. For the purpose of permitting the inspectors to perform such review, no such purported Special Meeting Request shall be deemed to have been received by the Secretary until the earlier of (i) five Business Days after actual receipt by the Secretary of such purported request and (ii) such date as the independent inspectors certify to the Corporation that the valid requests received by the Secretary represent, as of the Request Record Date, stockholders of record entitled to cast not less than the Special Meeting Percentage. Nothing contained in this paragraph (6) shall in any way be construed to suggest or imply that the Corporation or any stockholder shall not be entitled to contest the validity of any request, whether during or after such five Business Day period, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).

(7) The Secretary shall not accept, and the Secretary and the Corporation shall consider ineffective, any request from any stockholder to hold a special meeting or to establish a Request Record Date or Meeting Record Date that (a) does not comply with this Section 3 or (b) proposes or includes an item of business to be transacted at such special meeting that is not a proper subject for stockholder action under the charter of the Corporation (the “Charter”), these Bylaws or applicable law.

(8) For purposes of these Bylaws, “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of Maryland are authorized or obligated by law or executive order to close.

Section 4. Notice.

Not less than 10 nor more than 90 days before each meeting of stockholders, the Secretary shall give to each stockholder entitled to vote at such meeting and to each stockholder not entitled to vote who is entitled to notice of the meeting notice in writing or by electronic transmission stating the date, time and place of the meeting and, in the case of a special meeting or as otherwise may be required by any statute, the purpose for which the meeting is called, by mail, by presenting it to such stockholder personally, by leaving it at the stockholder’s residence or usual place of business, by electronic transmission or by any other means permitted by applicable law. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the stockholder at the stockholder’s address as it appears on the records of the Corporation, with postage thereon prepaid. If transmitted electronically, such notice shall be deemed to be given when transmitted to the stockholder by an electronic transmission to any address or number of the stockholder at which the stockholder receives electronic transmissions. The Corporation may give a single notice to all stockholders who share an address, which single notice shall be effective as to any stockholder at such address, unless a stockholder at such address objects to receiving such single notice or revokes a prior consent to receiving such single notice. Failure to give notice of any meeting to one or more stockholders, or any irregularity in such notice, shall not affect the validity of any meeting fixed in accordance with this Article II or the validity of any proceedings at any such meeting.

Subject to Section 11(a) of this Article II, any business of the Corporation may be transacted at an annual meeting of stockholders without being specifically designated in the notice, except such business as is required by any statute to be stated in such notice. No business shall be transacted at a special meeting of stockholders except as specifically designated in the notice of such special meeting. The Corporation may postpone or cancel a meeting of stockholders by making a public announcement (as defined in Section 11(c)(3) of this Article II) of such postponement or cancellation prior to the meeting. Notice of the date, time and place to which the meeting is postponed shall be given not less than 10 days prior to such date and otherwise in the manner set forth in this section.

Section 5. Organization and Conduct.

Every meeting of stockholders shall be conducted by an individual appointed by the Board of Directors to be chairman of the meeting or, in the absence of such appointment or appointed individual, by the Chairman of the Board of Directors or, in the case of a vacancy in the office or absence of the Chairman of the Board of Directors, by one of the following officers present at the meeting in the following order: the Chief Executive Officer, the President, the Vice Presidents in their order of rank and, within each rank, in their order of seniority, the Secretary, or, in the absence of all such officers, a chairman chosen by the stockholders by the vote of a majority of the votes cast by stockholders present in person or by proxy at such meeting. The Secretary, or, in the case of a vacancy in the office or the Secretary’s absence, an Assistant Secretary, or, in the absence of both the Secretary and all Assistant Secretaries, an individual appointed by the Board of Directors or, in the absence of such appointment, an individual appointed by the chairman of the meeting shall act as secretary of the meeting. In the event that the Secretary presides at a meeting of stockholders, an Assistant Secretary, or, in the absence of all Assistant Secretaries, an individual appointed by the Board of Directors or the chairman of the meeting, shall record the minutes of the meeting.

The Board of Directors may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of stockholders as the Board of Directors deems appropriate. Except to the extent not prohibited by any such rules, regulations and procedures adopted by the Board of Directors, the chairman of the meeting shall determine the order of business and all other matters of procedure at any meeting of stockholders and shall have the authority to adopt rules, regulations and procedures and take such other actions as, in the discretion of the chairman and without any action by the stockholders, are appropriate for the proper conduct of the meeting, including, without limitation, (a) restricting admission to the time set for the commencement of the meeting; (b) limiting attendance at the meeting to stockholders of record of the Corporation, their duly authorized proxies and such other individuals as the chairman of the meeting may determine; (c) limiting participation at the meeting on any matter to stockholders of record of the Corporation entitled to vote on such matter, their duly authorized proxies and such other individuals as the chairman of the meeting may determine; (d) limiting the time allotted to questions or comments by participants; (e) determining when and for how long the polls should be opened and when the polls should be closed and when and if a preliminary announcement of results should be made; (f) maintaining order and security at the meeting; (g) removing any stockholder or any other individual who refuses to comply with meeting procedures, rules or guidelines as set forth by the chairman of the meeting; (h) concluding the meeting or recessing or adjourning the meeting, whether or not a quorum is present, to a later date and time and at a place announced at the meeting; and (i) complying with any state and local laws and regulations concerning safety and security. Unless otherwise determined by the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

Section 6. Quorum.

At any meeting of stockholders, the presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting on any matter shall constitute a quorum; but this section shall not affect any requirement under any statute or the Charter for the vote necessary for the approval of any matter. If, however, such quorum is not established at any meeting of the stockholders, the chairman of the meeting may adjourn the meeting sine die or from time to time to a date not more than 120 days after the original record date without notice other than announcement at the meeting. At such adjourned meeting, if a quorum shall be established, any business may be transacted which might have been transacted at the meeting as originally convened. The stockholders present either in person or by proxy, at a meeting which has been duly called and at which a quorum has been established, may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough stockholders to leave fewer than would be required to establish a quorum.

Section 7. Voting.

A nominee for director shall be elected as a director only if such nominee receives the affirmative vote of a majority of the total votes cast for and against such nominee at a meeting of stockholders duly called and at which a quorum is present. However, directors shall be elected by a plurality of votes cast at a meeting of stockholders duly called and at which a quorum is present for which the number of nominees is greater than the number of directors to be elected at the meeting.. Each share entitles the holder thereof to vote for as many individuals as there are directors to be elected and for whose election the holder is entitled to be vote. A majority of the votes cast in favor of a matter (other than the election of directors) at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to approve any such matter which may properly come before the meeting, unless more than a majority of the votes cast is required by statute or by the Charter. Unless otherwise provided by statute or by the Charter, each outstanding share of stock, regardless of class, entitles the holder thereof to cast one vote on each matter submitted to a vote at a meeting of stockholders. Unless otherwise determined by the chairman of the meeting, voting on any question or in any election may be viva voce rather than by ballot.

Section 8. Proxies.

A holder of record of shares of stock of the Corporation may cast votes in person or by proxy executed or authorized by the stockholder or by the stockholder’s duly authorized agent in any manner permitted by law. Such proxy or evidence of authorization of such proxy shall be filed with the Secretary of the Corporation before or at the meeting. No proxy shall be valid more than 11 months after its date, unless otherwise provided in the proxy.

Section 9. Voting of Stock by Certain Holders.

Stock of the Corporation registered in the name of a corporation, partnership, limited liability company, joint venture, trust or other entity, if entitled to be voted, may be voted by the president or a vice president, general partner, trustee, manager or managing member thereof, as the case may be, or a proxy appointed by any of the foregoing individuals, unless some other person who has been appointed to vote such stock pursuant to a bylaw or a resolution of the governing body of such corporation or other entity or agreement of the partners of a partnership presents a certified copy of such bylaw, resolution or agreement, in which case such person may vote such stock. Any trustee or fiduciary may vote stock registered in the name of such person in the capacity of such trustee or fiduciary, either in person or by proxy.

Shares of stock of the Corporation directly or indirectly owned by it shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares entitled to be voted at any given time, unless they are held by it in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding shares at any given time.

The Board of Directors may adopt by resolution a procedure by which a stockholder may certify in writing to the Corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder. The resolution shall set forth the class of stockholders who may make the certification, the purpose for which the certification may be made, the form of certification and the information to be contained in it; if the certification is with respect to a record date, the time after the record date within which the certification must be received by the Corporation; and any other provisions with respect to the procedure which the Board of Directors considers necessary or desirable. On receipt by the Secretary of the Corporation of such certification, the person specified in the certification shall be regarded as, for the purposes set forth in the certification, the holder of record of the specified stock in place of the stockholder who makes the certification.

Section 10. Inspectors.

The Board of Directors or the chairman of the meeting may appoint, before or at the meeting, one or more inspectors for the meeting and any successor to the inspector. Except as otherwise provided by the chairman of the meeting, the inspectors, if any, shall (i) determine the number of shares of stock represented at the meeting, in person or by proxy, and the validity and effect of proxies, (ii) receive and tabulate all votes, ballots or consents, (iii) report such tabulation to the chairman of the meeting, (iv) hear and determine all challenges and questions arising in connection with the validity of any proxies or ballots, (v) perform such tasks as may be required by applicable law and (vi) do such acts as are proper to fairly conduct the election or vote. Each such report shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof.

Section 11. Advance Notice of Nominees for Director and Other Stockholder Proposals.

(a) Annual Meetings of Stockholders.

(1) Nominations of individuals for election to the Board of Directors and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders (i) pursuant to the Corporation’s notice of meeting, (ii) by or at the direction of the Board of Directors or (iii) by any stockholder of the Corporation who was a stockholder of record at the record date set by the Board of Directors for the purpose of determining stockholders entitled to vote at the annual meeting, at the time of giving of notice by the stockholder as provided for in this Section 11(a) and at the time of the annual meeting (and any postponement or adjournment thereof), who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who has complied with this Section 11(a).

(2) For any nomination or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of paragraph (a)(1) of this Section 11, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and any such other business must otherwise be a proper matter for action by the stockholders. To be timely, a stockholder’s notice shall set forth all information required under this Section 11 and shall be delivered to the Secretary at the principal executive office of the Corporation not earlier than the 150^th day nor later than 5:00 p.m., Eastern Time, on the 120^th day prior to the first anniversary of the date of the proxy statement (as defined in Section 11(c)(3) of this Article II) for the preceding year’s annual meeting; provided, however, that in connection with the Corporation’s first annual meeting or in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year’s annual meeting, in order for notice by the stockholder to be timely, such notice must be so delivered not earlier than the 150^th day prior to the date of such annual meeting and not later than 5:00 p.m., Eastern Time, on the later of the 120^th day prior to the date of such annual meeting, as originally convened, or the tenth day following the day on which public announcement of the date of such meeting is first made. The public announcement of a postponement or adjournment of an annual meeting shall not commence a new time period for the giving of a stockholder’s notice as described above.

(3) Such stockholder’s notice shall set forth:

(i) as to each individual whom the stockholder proposes to nominate for election or reelection as a director (each, a “Proposed Nominee”), all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a director in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act;

(ii) as to any other business that the stockholder proposes to bring before the meeting, a description of such business, the stockholder’s reasons for proposing such business at the meeting and any material interest in such business of such stockholder or any Stockholder Associated Person (as defined below), individually or in the aggregate, including any anticipated benefit to the stockholder or the Stockholder Associated Person therefrom;

(iii) as to the stockholder giving the notice, any Proposed Nominee and any Stockholder Associated Person:

(A) the class, series and number of all shares of stock or other securities of the Corporation or any affiliate thereof (collectively, the “Company Securities”), if any, which are owned (beneficially or of record) by such stockholder, Proposed Nominee or Stockholder Associated Person, the date on which each such Company Security was acquired and the investment intent of such acquisition, and any short interest (including any opportunity to profit or share in any benefit from any decrease in the price of such stock or other security) in any Company Securities of any such person,

(B) the nominee holder for, and number of, any Company Securities owned beneficially but not of record by such stockholder, Proposed Nominee or Stockholder Associated Person,

(C) whether and the extent to which such stockholder, Proposed Nominee or Stockholder Associated Person, directly or indirectly (through brokers, nominees or otherwise), is subject to or during the last six months has engaged in any hedging, derivative or other transaction or series of transactions or entered into any other agreement, arrangement or understanding (including any short interest, any borrowing or lending of securities or any proxy or voting agreement), the effect or intent of which is to (I) manage risk or benefit of changes in the price of Company Securities for such stockholder, Proposed Nominee or Stockholder Associated Person or (II) increase or decrease the voting power of such stockholder, Proposed Nominee or Stockholder Associated Person in the Corporation or any affiliate thereof disproportionately to such person’s economic interest in the Company Securities, and

(D) any substantial interest, direct or indirect (including, without limitation, any existing or prospective commercial, business or contractual relationship with the Corporation), by security holdings or otherwise, of such stockholder, Proposed Nominee or Stockholder Associated Person, in the Corporation or any affiliate thereof, other than an interest arising from the ownership of Company Securities where such stockholder, Proposed Nominee or Stockholder Associated Person receives no extra or special benefit not shared on a pro rata basis by all other holders of the same class or series;

(iv) as to the stockholder giving the notice, any Stockholder Associated Person with an interest or ownership referred to in clauses (ii) or (iii) of this paragraph (3) of this Section 11(a) and any Proposed Nominee,

(A) the name and address of such stockholder, as they appear on the Corporation’s stock ledger, and the current name and business address, if different, of each such Stockholder Associated Person and any Proposed Nominee and

(B) the investment strategy or objective, if any, of such stockholder and each such Stockholder Associated Person who is not an individual and a copy of the prospectus, offering memorandum or similar document, if any, provided to investors or potential investors in such stockholder and each such Stockholder Associated Person;

(v) the name and address of any person who contacted or was contacted by the stockholder giving the notice or any Stockholder Associated Person about the Proposed Nominee or other business proposal; and

(vi) to the extent known by the stockholder giving the notice, the name and address of any other stockholder supporting the nominee for election or reelection as a director or the proposal of other business.

(4) A stockholder’s notice described in Section 11(a)(2) of this Article II or Section 11(b) of this Article II, as the case may be, shall, with respect to any Proposed Nominee, be accompanied by a written undertaking executed by the Proposed Nominee (i) certifying that such Proposed Nominee (a) is not, and will not become a party to, any agreement, arrangement or understanding with any person or entity other than the Corporation in connection with service or action as a director of the Corporation that has not been disclosed to the Corporation and (b) will serve as a director of the Corporation if elected; and (ii) attaching a completed Proposed Nominee questionnaire (which questionnaire shall be provided by the Corporation, upon request, to the stockholder providing the notice and shall include all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a director in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act, or would be required pursuant to the rules of any national securities exchange on which any securities of the Corporation are listed or over-the-counter market on which any securities of the Corporation are traded).

(5) Notwithstanding anything in this Section 11(a) to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased, and there is no public announcement of such action at least 130 days prior to the first anniversary of the date of the proxy statement (as defined in Section 11(c)(3) of this Article II) for the preceding year’s annual meeting, a stockholder’s notice required by this Section 11(a) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive office of the Corporation not later than 5:00 p.m., Eastern Time, on the 10^th day following the day on which such public announcement is first made by the Corporation.

(6) For purposes of these Bylaws, “Stockholder Associated Person” of any stockholder shall mean (i) any person acting in concert with such stockholder, (ii) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder (other than a stockholder that is a depositary) and (iii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such stockholder or such Stockholder Associated Person.

(b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of individuals for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected only (i) by or at the direction of the Board of Directors or (ii) provided that the special meeting has been called by the Board of Directors or a duly authorized officer in accordance with Section 3 of this Article II for the purpose of electing directors, by any stockholder of the Corporation who is a stockholder of record at the record date set by the Board of Directors for the purpose of determining stockholders entitled to vote at the special meeting, at the time of giving of notice provided for in this Section 11 and at the time of the special meeting (or any postponement or adjournment thereof), who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the notice procedures set forth in this Section 11. Section 11(a)(1)(iii) of this Article II above shall be the exclusive means for a stockholder to propose business to be brought before a special meeting of the stockholders. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more individuals to the Board of Directors, any stockholder may nominate an individual or individuals (as the case may be) for election as a director as specified in the Corporation’s notice of meeting, if the stockholder’s notice, containing the information required by Section 11(a)(3) and (4) of this Article II, is delivered to the Secretary at the principal executive office of the Corporation not earlier than the 120^th day prior to such special meeting and not later than 5:00 p.m., Eastern Time, on the later of the 90^th day prior to such special meeting or the 10^th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. The public announcement of a postponement or adjournment of a special meeting shall not commence a new time period for the giving of a stockholder’s notice as described above.

(c) General. (1) If information submitted pursuant to this Section 11 by any stockholder proposing a nominee for election as a director or any proposal for other business at a meeting of stockholders shall be inaccurate in any material respect, such information may be deemed not to have been provided in accordance with this Section 11. Any such stockholder shall (A) notify the Corporation of any inaccuracy or change in any such information within two Business Days of becoming aware of such inaccuracy or change and (B) promptly update and supplement the information previously provided to the Corporation pursuant to this Section 11, if necessary, so that the information provided or required to be provided shall be true and correct as of the record date for the meeting and as of the date that is 10 Business Days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to the Secretary at the principal executive office of the Corporation. Without limiting the foregoing, upon written request by the Secretary or the Board of Directors, any such stockholder shall provide, within five Business Days of delivery of such request (or such other period as may be specified in such request), (A) written verification, satisfactory, in the discretion of the Board of Directors or any authorized officer of the Corporation, to demonstrate the accuracy of any information submitted by the stockholder pursuant to this Section 11, (B) a written update of any information (including, if requested by the Corporation, written confirmation by such stockholder that it continues to intend to bring such nomination or other business proposal before the meeting) submitted by the stockholder pursuant to this Section 11 as of an earlier date and (C) any other information requested by the Corporation as may reasonably be required to determined the eligibility of any Proposed Nominee to serve as an independent director of the Corporation or that would be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such Proposed Nominee. If a stockholder fails to provide such written verification or written update within such period, the information as to which written verification or a written update was requested may be deemed not to have been provided in accordance with this Section 11.

(2) Only such individuals who are nominated in accordance with this Section 11 shall be eligible for election by stockholders as directors, and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with this Section 11 except as required pursuant to Rule 14a-8 under the Exchange Act or such similar rule promulgated by the United States Securities and Exchange Commission (the “SEC”) that governs the inclusion of stockholder proposals in proxy materials or consideration at a stockholders meeting. The chairman of the meeting shall have the power to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with these Bylaws and, if any proposed nomination or other business is not in compliance with these Bylaws, to declare that no action shall be taken on such nomination or other proposal, and such nomination or other proposal shall be disregarded.

(3) For purposes of this Section 11: (i) “the date of the proxy statement” shall have the same meaning as “the date of the company’s proxy statement released to shareholders” as used in Rule 14a-8(e) promulgated under the Exchange Act, as interpreted by the SEC from time to time; and (ii) “public announcement” shall mean disclosure (A) in a press release reported by the Dow Jones News Service, Associated Press, Business Wire, PR Newswire or other widely circulated news or wire service or (B) in a document publicly filed by the Corporation with the SEC pursuant to the Exchange Act.

(4) Notwithstanding the foregoing provisions of this Section 11, a stockholder shall also comply with all applicable requirements of state law and of the Exchange Act with respect to the matters set forth in this Section 11. Nothing in this Section 11 shall be deemed to affect any right of a stockholder to request inclusion of a proposal in, or the right of the Corporation to omit a proposal from, the Corporation’s proxy statement pursuant to Rule 14a-8 (or any successor provision) under the Exchange Act. Nothing in this Section 11 shall require disclosure of revocable proxies received by the stockholder or Stockholder Associated Person pursuant to a solicitation of proxies after the filing of an effective Schedule 14A by such stockholder or Stockholder Associated Person under Section 14(a) of the Exchange Act.

(5) Notwithstanding anything in these Bylaws to the contrary, except as otherwise determined by the chairman of the meeting, if the stockholder giving notice as provided for in this Section 11 does not appear in person or by proxy at such annual or special meeting to present each nominee for election as a director or the proposed business, as applicable, such matter shall not be considered at the meeting.

Section 12. Control Share Acquisition Act.

Notwithstanding any other provision of the Charter or these Bylaws, Title 3, Subtitle 7 of the Maryland General Corporation Law (or any successor statute) (the “MGCL”) shall not apply to any acquisition by any person of shares of stock of the Corporation. This section may be repealed, in whole or in part, at any time, whether before or after an acquisition of control shares and, upon such repeal, may, to the extent provided by any successor bylaw, apply to any prior or subsequent control share acquisition.

Section 13. Telephone Meetings.

The Board of Directors or chairman of the meeting may permit one or more stockholders to participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means constitutes presence in person at the meeting.

ARTICLE III

DIRECTORS

Section 1. General Powers.

The business and affairs of the Corporation shall be managed under the direction of its Board of Directors.

Section 2. Number, Tenure and Resignation.

A majority of the entire Board of Directors may establish, increase or decrease the number of directors, provided that the number thereof shall never be less than the minimum number required by the MGCL nor more than 15, and provided further that the tenure of office of a director shall not be affected by any decrease in the number of directors. Directors shall be elected at the annual meeting of stockholders, and each director shall be elected to serve until the next annual meeting of stockholders and until his or her successor is duly elected and qualifies. Any director of the Corporation may resign at any time by delivering his or her resignation to the Board of Directors, the Chairman of the Board of Directors or the Secretary of the Corporation. Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation.

Section 3. Annual and Regular Meetings.

An annual meeting of the Board of Directors shall be held immediately after and at the same place as the annual meeting of stockholders, with no notice other than this Bylaw being necessary, or at such other date, time and place as may be determined by the Board of Directors and specified in a notice given as hereinafter provided for special meetings of the Board of Directors. The Board of Directors may provide, by resolution, the date, time and place for the holding of regular meetings of the Board of Directors without other notice than such resolution.

Section 4. Special Meetings.

Special meetings of the Board of Directors may be called by or at the request of the Chairman of the Board of Directors, the Chief Executive Officer, the President or a majority of the directors then in office. The person or persons authorized to call special meetings of the Board of Directors may fix the date, time and place for holding any special meeting of the Board of Directors called by them. The Board of Directors may provide, by resolution, the time and place for the holding of special meetings of the Board of Directors without other notice than such resolution.

Section 5. Notice.

Notice of any special meeting of the Board of Directors shall be delivered personally or by telephone, electronic transmission, courier or United States mail to each director at his or her business or residence address. Notice by personal delivery, telephone, electronic transmission shall be given at least 24 hours prior to the meeting. Notice by United States mail shall be given at least three days prior to the meeting. Notice by courier shall be given at least two days prior to the meeting. Telephone notice shall be deemed to be given when the director or his or her agent is personally given such notice in a telephone call to which the director or his or her agent is a party. If transmitted electronically, such notice shall be deemed to be given when transmitted to the director by an electronic transmission to any address or number of the director at which the director receives electronic transmissions. Notice by United States mail shall be deemed to be given when deposited in the United States mail properly addressed, with postage thereon prepaid. Notice by courier shall be deemed to be given when deposited with or delivered to a courier properly addressed. Neither the business to be transacted at, nor the purpose of, any annual, regular or special meeting of the Board of Directors need be stated in the notice, unless specifically required by statute or these Bylaws.

Section 6. Quorum.

A majority of the directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, provided that, if less than a majority of directors is present at any meeting, a majority of the directors present may adjourn the meeting from time to time without further notice, and provided further that if, pursuant to applicable law, the Charter or these Bylaws, the vote of a majority or other percentage of a particular group of directors is required for action, a quorum must also include a majority or such other percentage of such group.

The directors present at a meeting which has been duly called and at which a quorum has been established may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough directors to leave fewer than required to establish a quorum.

Section 7. Voting.

The action of a majority of the directors present at a meeting at which a quorum is present shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by applicable law, the Charter or these Bylaws. If enough directors have withdrawn from a meeting to leave fewer than required to establish a quorum, but the meeting is not adjourned, the action of the majority of that number of directors necessary to constitute a quorum at such meeting shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by applicable law, the Charter or these Bylaws.

Section 8. Organization.

At each meeting of the Board of Directors, the Chairman of the Board of Directors or, in the absence of the Chairman of the Board of Directors, the Vice Chairman of the Board of Directors, if any, shall act as chairman of the meeting. In the absence of both the Chairman of the Board of Directors and the Vice Chairman of the Board of Directors, the Chief Executive Officer or, in the absence of the Chief Executive Officer, the President or, in the absence of the President, a director chosen by a majority of the directors present, shall act as chairman of the meeting. The Secretary or, in his or her absence, an Assistant Secretary of the Corporation, or, in the absence of the Secretary and all Assistant Secretaries, an individual appointed by the chairman of the meeting, shall act as secretary of the meeting.

Section 9. Telephone Meetings.

Directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.

Section 10. Consent by Directors Without a Meeting.

Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if a consent in writing or by electronic transmission to such action is given by each director and is filed with the minutes of proceedings of the Board of Directors.

Section 11. Vacancies.

If for any reason any or all of the directors cease to be directors, such event shall not terminate the existence of the Corporation or affect these Bylaws or the powers of the remaining directors hereunder. Except as may be provided by the Board of Directors in setting the terms of any class or series of preferred stock, any vacancy on the Board of Directors may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum. Any director elected to fill a vacancy shall serve for the remainder of the full term of the directorship in which the vacancy occurred and until a successor is elected and qualifies.

Section 12. Chairman of the Board of Directors

The Board of Directors may designate a Chairman of the Board of Directors who may be an executive or non-executive chairman. The Chairman of the Board of Directors shall preside over the meetings of the Board of Directors. The Chairman of the Board of Directors shall perform such other duties as may be assigned to him by these Bylaws or the Board of Directors.

Section 13. Compensation.

Directors shall not receive any stated salary for their services as directors but, by resolution of the Board of Directors, may receive compensation per year and/or per meeting and/or per visit to real property or other facilities owned or leased by the Corporation and for any service or activity they performed or engaged in as directors. Directors may be reimbursed for expenses of attendance, if any, at each annual, regular or special meeting of the Board of Directors or of any committee thereof and for their expenses, if any, in connection with each property visit and any other service or activity they perform or engage in as directors; but nothing herein contained shall be construed to preclude any directors from serving the Corporation in any other capacity and receiving compensation therefor.

Section 14. Reliance.

Each director and officer of the Corporation shall, in the performance of his or her duties with respect to the Corporation, be entitled to rely on any information, opinion, report or statement, including any financial statement or other financial data, prepared or presented by an officer or employee of the Corporation whom the director or officer reasonably believes to be reliable and competent in the matters presented, by a lawyer, certified public accountant or other person, as to a matter which the director or officer reasonably believes to be within the person’s professional or expert competence, or, with respect to a director, by a committee of the Board of Directors on which the director does not serve, as to a matter within its designated authority, if the director reasonably believes the committee to merit confidence.

Section 15. Certain Rights of Directors and Officers.

A director who is not also an officer of the Corporation shall have no responsibility to devote his or her full time to the affairs of the Corporation. Any director or officer, in his or her personal capacity or in a capacity as an affiliate, employee, or agent of any other person, or otherwise, may have business interests and engage in business activities similar to, in addition to or in competition with those of or relating to the Corporation.

Section 16. Ratification.

The Board of Directors or the stockholders may ratify and make binding on the Corporation any action or inaction by the Corporation or its officers to the extent that the Board of Directors or the stockholders could have originally authorized the matter. Moreover, any action or inaction questioned in any stockholders’ derivative proceeding or any other proceeding on the ground of lack of authority, defective or irregular execution, adverse interest of a director, officer or stockholder, non-disclosure, miscomputation, the application of improper principles or practices of accounting or otherwise, may be ratified, before or after judgment, by the Board of Directors or by the stockholders, and if so ratified, shall have the same force and effect as if the questioned action or inaction had been originally duly authorized, and such ratification shall be binding upon the Corporation and its stockholders and shall constitute a bar to any claim or execution of any judgment in respect of such questioned action or inaction.

Section 17. Emergency Provisions.

Notwithstanding any other provision in the Charter or these Bylaws, this Section 17 shall apply during the existence of any catastrophe, or other similar emergency condition, as a result of which a quorum of the Board of Directors under Article III of these Bylaws cannot readily be obtained (an “Emergency”). During any Emergency, unless otherwise provided by the Board of Directors, (i) a meeting of the Board of Directors or a committee thereof may be called by any director or officer by any means feasible under the circumstances; (ii) notice of any meeting of the Board of Directors during such an Emergency may be given less than 24 hours prior to the meeting to as many directors and by such means as may be feasible at the time, including publication, television or radio; and (iii) the number of directors necessary to constitute a quorum shall be one-third of the entire Board of Directors.

ARTICLE IV

COMMITTEES

Section 1. Number, Tenure and Qualifications.

The Board of Directors may appoint from among its members an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and other committees, composed of one or more directors, to serve at the pleasure of the Board of Directors.

Section 2. Powers.

The Board of Directors may delegate to committees appointed under Section 1 of this Article IV any of the powers of the Board of Directors, except as prohibited by law. Except as may be otherwise provided by the Board of Directors, any committee may delegate some or all of its power and authority to one or more subcommittees, composed of one or more directors, as the committee deems appropriate in its sole discretion.

Section 3. Meetings.

Notice of committee meetings shall be given in the same manner as notice for special meetings of the Board of Directors. A majority of the members of the committee shall constitute a quorum for the transaction of business at any meeting of the committee. The act of a majority of the committee members present at a meeting shall be the act of such committee. The Board of Directors may designate a chairman of any committee, and such chairman or, in the absence of a chairman, any two members of any committee (if there are at least two members of the committee) may fix the time and place of its meeting unless the Board of Directors shall otherwise provide. In the absence of any member of any such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint another director to act in the place of such absent member.

Section 4. Telephone Meetings.

Members of a committee of the Board of Directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.

Section 5. Consent by Committees Without a Meeting.

Any action required or permitted to be taken at any meeting of a committee of the Board of Directors may be taken without a meeting, if a consent in writing or by electronic transmission to such action is given by each member of the committee and is filed with the minutes of proceedings of such committee.

Section 6. Removal and Vacancies.

Subject to the provisions hereof, the Board of Directors shall have the power at any time to change the membership or size of any committee (including the removal of any member of such committee), to fill any vacancy, to designate an alternate member to replace any absent or disqualified member or to dissolve any such committee.

ARTICLE V

OFFICERS

Section 1. General Provisions.

The officers of the Corporation shall include a President, a Secretary and a Treasurer and may include a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a Chief Executive Officer, a Chief Operating Officer, a Chief Financial Officer, one or more Vice Presidents, one or more Assistant Secretaries and one or more Assistant Treasurers. In addition, the Board of Directors may from time to time elect such other officers with such powers and duties as it shall deem necessary or desirable. The officers of the Corporation shall be elected annually by the Board of Directors, except that the Chief Executive Officer or President may from time to time appoint one or more Vice Presidents, Assistant Secretaries, and Assistant Treasurers or other officers. Each officer shall serve until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal in the manner hereinafter provided. Any two or more offices except President and Vice President may be held by the same person. Election of an officer or agent shall not of itself create contract rights between the Corporation and such officer or agent.

Section 2. Removal and Resignation.

Any officer or agent of the Corporation may be removed, with or without cause, by the Board of Directors if in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any officer of the Corporation may resign at any time by delivering his or her resignation to the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer, the President or the Secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation. Such resignation shall be without prejudice to the contract rights, if any, of the Corporation.

Section 3. Vacancies.

A vacancy in any office may be filled by the Board of Directors for the balance of the term.

Section 4. Chief Executive Officer.

The Board of Directors may designate a Chief Executive Officer. In the absence of such designation, the Chairman of the Board of Directors shall be the Chief Executive Officer of the Corporation. The Chief Executive Officer shall have general responsibility for implementation of the policies of the Corporation, as determined by the Board of Directors, and for the management of the business and affairs of the Corporation. The Chief Executive Officer may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed, and in general shall perform all duties incident to the office of Chief Executive Officer and such other duties as may be prescribed the Board of Directors from time to time.

Section 5. Chief Operating Officer.

The Board of Directors may designate a Chief Operating Officer. The Chief Operating Officer shall have the responsibilities and duties as prescribed by the Board of Directors or the Chief Executive Officer.

Section 6. Chief Financial Officer.

The Board of Directors may designate a Chief Financial Officer. The Chief Financial Officer shall have the responsibilities and duties prescribed by the Board of Directors or the Chief Executive Officer.

Section 7. President.

In the absence of a Chief Executive Officer, the President shall in general supervise and control all of the business and affairs of the Corporation. In the absence of a Chief Operating Officer, the President shall be the Chief Operating Officer. The President may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed, and in general shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time.

Section 8. Vice Presidents.

The Board of Directors, the Chief Executive Officer or the President may designate one or more Vice Presidents. The Board of Directors, the Chief Executive Officer or the President may designate one or more Vice Presidents as Executive Vice President, Senior Vice President or Vice President for particular areas of responsibility. In the absence of the President or in the event of a vacancy in such office, the Vice President (or in the event there be more than one Vice President, Vice Presidents in the order designated at the time of their election or, in the absence of any designation, then in the order of their election) shall perform the duties of the President and when so acting shall have all the powers of and be subject to all the restrictions upon the President, and shall perform such other duties as from time to time may be assigned to such Vice President by the Board of Directors, President or Chief Executive Officer.

Section 9. Secretary.

The Secretary shall (a) keep the minutes of the proceedings of the stockholders, the Board of Directors and committees of the Board of Directors in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the Corporation; (d) keep a register of the post office address of each stockholder which shall be furnished to the Secretary by such stockholder; (e) have general charge of the stock transfer books of the Corporation; and (f) in general perform such other duties as from time to time may be assigned to him or her by the Chief Executive Officer, the President or the Board of Directors.

Section 10. Treasurer.

The Treasurer shall (a) have the custody of the funds and securities of the Corporation; (b) keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation; (c) deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors; and (d) in general perform such other duties as from time to time may be assigned to him or her by the Chief Executive Officer, the President or the Board of Directors. In the absence of a designation of a Chief Financial Officer by the Board of Directors, the Treasurer shall be the Chief Financial Officer of the Corporation.

The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and Board of Directors, at the regular meetings of the Board of Directors or whenever it may so require, an account of all his or her transactions as Treasurer and of the financial condition of the Corporation.

Section 11. Assistant Secretaries; Assistant Treasurers.

The Board of Directors, the Chief Executive Officer or the President may appoint one or more Assistant Secretaries and Assistant Treasurers, who, in general, shall perform such duties as shall be assigned to them by the Secretary or Treasurer, respectively, or by the Chief Executive Officer, the President or the Board of Directors.

Section 12. Compensation.

The compensation of the officers shall be fixed from time to time by or under the authority of the Board of Directors. No officer shall be prevented from receiving such compensation by reason of the fact that he or she is also a director.

ARTICLE VI

CONTRACTS, CHECKS AND DEPOSITS

Section 1. Contracts.

The Board of Directors, or a committee thereof, or any manager of the Corporation approved by the Board of Directors and acting within the scope of its authority pursuant to a management agreement with the Corporation may authorize any officer or agent to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation and such authority may be general or confined to specific instances. Any agreement, deed, mortgage, lease or other document shall be valid and binding upon the Corporation when executed by an authorized person and duly authorized or ratified by action of the Board of Directors or such committee and executed by an authorized person thereof or a manager acting within the scope of its authority pursuant to a management agreement.

Section 2. Checks and Drafts.

All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or agent of the Corporation in such manner as shall from time to time be determined by the Board of Directors.

Section 3. Deposits.

All funds of the Corporation not otherwise employed shall be deposited or invested from time to time to the credit of the Corporation as the Board of Directors, the Chief Executive Officer, the President, the Chief Financial Officer, or any other officer designated by the Board of Directors may determine.

ARTICLE VII

STOCK

Section 1. Certificates.

Except as may be otherwise provided by the Board of Directors, stockholders of the Corporation are not entitled to certificates representing the shares of stock held by them. In the event that the Corporation issues shares of stock represented by certificates, such certificates shall be in such form as prescribed by the Board of Directors or a duly authorized officer, shall contain the statements and information required by the MGCL and the Charter and shall be signed by the officers of the Corporation in the manner required by the MGCL. In the event that the Corporation issues shares of stock without certificates, to the extent then required by the MGCL, the Corporation shall provide to the record holders of such shares a written statement of the information required by the MGCL to be included on stock certificates. There shall be no differences in the rights and obligations of stockholders based on whether or not their shares are represented by certificates.

Section 2. Transfers.

All transfers of shares of stock shall be made on the books of the Corporation and the books of the transfer agent of the Corporation, if applicable, by the holder of the shares, in person or by his or her attorney, in such manner as the Board of Directors or any officer of the Corporation may prescribe and, if such shares are certificated, upon surrender to the Corporation or, if authorized by the Corporation, the transfer agent of the Corporation of certificates duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation, or, if authorized by the Corporation, the transfer agent of the Corporation, shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction on its books. The issuance of a new certificate upon the transfer of certificated shares is subject to the determination of the Board of Directors that such shares shall no longer be represented by certificates. Upon the transfer of any uncertificated shares, to the extent then required by the MGCL, the Corporation shall provide to the record holders of such shares a written statement of the information required by the MGCL to be included on stock certificates.

The Corporation shall be entitled to treat the holder of record of any share of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the laws of the State of Maryland. Notwithstanding the foregoing, transfers of shares of any class or series of stock will be subject in all respects to the Charter and all of the terms and conditions contained therein.

Section 3. Replacement Certificate.

Any officer of the Corporation may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, destroyed, stolen or mutilated upon the making of an affidavit of that fact by the person claiming the certificate to be lost, destroyed, stolen or mutilated; provided, however, if such shares have ceased to be certificated, no new certificate shall be issued unless requested in writing by such stockholder and the Board of Directors has determined that such certificates may be issued. Unless otherwise determined by an officer of the Corporation, the owner of such lost, destroyed, stolen or mutilated certificate or certificates, or his or her legal representative, shall be required, as a condition precedent to the issuance of a new certificate or certificates, to give the Corporation a bond in such sums as it may direct as indemnity against any claim that may be made against the Corporation.

Section 4. Fixing of Record Date.

Subject to the provisions of Section 3 of Article II, the Board of Directors may set, in advance, a record date for the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or determining stockholders entitled to receive payment of any dividend or the allotment of any other rights, or in order to make a determination of stockholders for any other proper purpose. Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than 90 days and, in the case of a meeting of stockholders, not less than 10 days, before the date on which the meeting or particular action requiring such determination of stockholders of record is to be held or taken.

When a record date for the determination of stockholders entitled to notice of and to vote at any meeting of stockholders has been set as provided in this section, such record date shall continue to apply to the meeting if adjourned or postponed, except if the meeting is adjourned or postponed to a date more than 120 days after the record date originally fixed for the meeting, in which case a new record date for such meeting may be determined as set forth herein.

Section 5. Stock Ledger.

The Corporation shall maintain at its principal office or at the office of its counsel, accountants or transfer agent, an original or duplicate stock ledger containing the name and address of each stockholder of record and the number of shares of each class held by such stockholder.

Section 6. Fractional Stock; Issuance of Units.

The Board of Directors may authorize the Corporation to issue fractional stock or authorize the issuance of scrip, all on such terms and under such conditions as it may determine. Notwithstanding any other provision of the Charter or these Bylaws, the Board of Directors may authorize the issuance of units consisting of different securities of the Corporation.

ARTICLE VIII

ACCOUNTING YEAR

Section 1. Accounting Year.

The Board of Directors shall have the power, from time to time, to fix the fiscal year of the Corporation by a duly adopted resolution.

ARTICLE IX

DISTRIBUTIONS

Section 1. Authorization.

Dividends and other distributions upon the stock of the Corporation may be authorized by the Board of Directors, subject to the provisions of law and the Charter. Dividends and other distributions may be paid in cash, property or stock of the Corporation, subject to the provisions of law and the Charter.

Section 2. Contingencies.

Before payment of any dividend or other distribution, there may be set aside out of any assets of the Corporation available for dividends or other distributions such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper as a reserve fund for contingencies, for equalizing dividends, for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall determine, and the Board of Directors may modify or abolish any such reserve.

ARTICLE X

INVESTMENT POLICIES

Subject to the provisions of the Charter, the Board of Directors may from time to time adopt, amend, revise or terminate any policy or policies with respect to investments by the Corporation as it shall deem appropriate in its sole discretion.

ARTICLE XI

SEAL

Section 1. Seal.

The Board of Directors may authorize the adoption of a seal by the Corporation. The seal shall contain the name of the Corporation and the year of its incorporation, and the words “Incorporated Maryland.” The Board of Directors may authorize one or more duplicate seals and provide for the custody thereof.

Section 2. Affixing Seal.

Whenever the Corporation is permitted or required to affix its seal to a document, it shall be sufficient to meet the requirements of any law, rule or regulation relating to a seal to place the word “(SEAL)” adjacent to the signature of the person authorized to execute the document on behalf of the Corporation.

ARTICLE XII

WAIVER OF NOTICE

Whenever any notice of a meeting is required to be given pursuant to the Charter or these Bylaws or pursuant to applicable law, a waiver thereof in writing or by electronic transmission, given by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice of such meeting, unless specifically required by statute. The attendance of any person at any meeting shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened.

ARTICLE XIII

EXCLUSIVE FORUM FOR CERTAIN LITIGATION

Unless the Corporation consents in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Northern Division, shall be the sole and exclusive forum for (a) any Internal Corporate Claim, as such term is defined in Section 1-101(p) of the MGCL, or any successor provision thereof, (b) any derivative action or proceeding brought on behalf of the Corporation, other than actions arising under federal securities laws, (c) any action asserting a claim of breach of any duty owed by any director or officer or other employee of the Corporation to the Corporation or to the stockholders of the Corporation, (d) any action asserting a claim against the Corporation or any director or officer or other employee of the Corporation arising pursuant to any provision of the MGCL or the Charter or these Bylaws, or (e) any other action asserting a claim against the Corporation or any director or officer or other employee of the Corporation that is governed by the internal affairs doctrine. None of the foregoing actions, claims or proceedings may be brought in any court sitting outside the State of Maryland unless the Corporation consents in writing to such court.

ARTICLE XIV

AMENDMENT OF BYLAWS

The Board of Directors shall have the exclusive power to adopt, amend or repeal any provision of these Bylaws and to make new Bylaws.

Exhibit 4.4

AMENDMENT OF

WARRANT AGREEMENT

THIS AMENDMENT OF WARRANT AGREEMENT (this “Agreement”), made as of November 14, 2019, is made by and between Trinity Merger Corp, a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”).

WHEREAS, the Company and the Warrant Agent are parties to that certain Warrant Agreement, dated as of May 14, 2018 and filed with the United States Securities and Exchange Commission on May 17, 2018 (the “Existing Warrant Agreement”), pursuant to which the Company has issued 34,500,000 warrants (the “Public Warrants”) in its initial public offering and 12,350,000 private placement warrants (“Private Placement Warrants”, together with the Public Warrants, the “Warrants”), each representing the right to purchase one share of Class A common stock, par value $0.0001, of the Company (“Common Stock”);

WHEREAS, capitalized terms used herein, but not otherwise defined, shall have the meanings given to such terms in the Existing Warrant Agreement;

WHEREAS, effective as of August 9, 2019, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Trinity Sub Inc., a Maryland corporation and wholly owned subsidiary of the Company (“PubCo”), Trinity Merger Sub I Inc., a Delaware corporation and wholly owned subsidiary of PubCo (“Merger Sub I”), Trinity Merger Sub II LLC, a Delaware limited liability company and wholly owned subsidiary of PubCo, PBRELF I, LLC, a Washington limited liability company, BRELF II, LLC, a Washington limited liability company, BRELF III, LLC, a Washington limited liability company, BRELF IV, LLC, a Washington limited liability company, Pyatt Broadmark Management, LLC, a Washington limited liability company, Broadmark Real Estate Management II, LLC, a Washington limited liability company, Broadmark Real Estate Management III, LLC, a Washington limited liability company, and Broadmark Real Estate Management IV, LLC, a Washington limited liability company;

WHEREAS, the Merger Agreement provides, among other things, (i) each share of Common Stock issued and outstanding immediately prior to the the effective time of merger of the Merger Sub I with and into the Company, with the Company being the surviving entity of such merger (such merger, the “Trinity Merger”, and such effective time of the Trinity Merger, the “Trinity Effective Time”) shall automatically be converted into one validly issued, fully paid and non-assessable share of common stock of PubCo, par value $0.001 (“PubCo Common Stock”) and (ii) each Warrant that is outstanding immediately prior to the Trinity Effective Time, shall represent the right to acquire shares of PubCo Common Stock, on the same contractual terms and conditions as were in effect immediately prior to the Trinity Effective Time, under the terms of the Existing Warrant Agreement as amended by this Agreement;

WHEREAS, at the Trinity Effective Time, as provided in Section 4.4 of the Existing Warrant Agreement, the Warrants will no longer be exercisable for shares of Common Stock but instead will be exercisable (subject to the terms and conditions of the Existing Warrant Agreement as amended hereby) for a number of shares of PubCo Common Stock equal to the number of shares of Common Stock for which the Warrants were exercisable immediately prior to the Trinity Effective Time (subject to the terms and conditions of the Existing Warrant Agreement as amended hereby);

WHEREAS, the Board of Directors of the Company has determined that the consummation of the Trinity Merger and the other transactions contemplated by the Merger Agreement (the “Transactions”) will constitute a Business Combination (as defined in Section 3.2 of the Existing Warrant Agreement);

WHEREAS, it is a condition to the closing of the Transactions, among other things, that the Warrant Holder Approval (as defined in the Merger Agreement) has been obtained;

WHEREAS, Section 9.8 of the Existing Warrant Agreement provides that the Existing Warrant Agreement may be amended with the vote or written consent of the registered holders of 65% of the then outstanding Public Warrants; and

WHEREAS, at a meeting of the holders of the Warrants, holders of at least 65% of the Public Warrants approved that, effective as of the Trinity Effective Time, and pursuant to this Agreement, (i) the anti-dilution provisions and certain provisions relating to the payment of cash dividends contained in Section 4.1.2 of the Warrant Agreement relating to the payment of cash dividends and applicable to the Warrants shall be amended, (ii) each Public Warrant shall become exercisable for one-quarter of one share of Company Common Stock with an exercise price of $2.875 per one-quarter share ($11.50 per whole share), and (iii) each holder of a Public Warrant shall be entitled to receive a special distribution of $1.60 per Public Warrant as soon as reasonably practicable following the Trinity Effective Time.

NOW, THEREFORE, in consideration of the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

1 Amendment of Existing Warrant Agreement. The Company and the Warrant Agent hereby amend the Existing Warrant Agreement as provided in this Section 1, effective as of the Trinity Effective Time.

1.1 Private Placement Warrant Amendments.

1.1.1 The following clause of Section 2.5 of the Existing Warrant Agreement, “The Private Placement Warrants shall be identical to the Public Warrants, except that so long as they are held by the Sponsor or any of its Permitted Transferees (as defined below) the Private Placement Warrants:”, is hereby deleted in its entirety and replaced as follows:

“The Private Placement Warrants shall be identical to the Public Warrants, except (x) that Private Placement Warrants shall be exercisable for one fully paid and non-assessable share of Common Stock at an exercise price per share of Common Stock of $11.50, as set forth in Exhibit A hereto and (y) that so long as they are held by the Sponsor or any of its Permitted Transferees (as defined below) the Private Placement Warrants:”

1.1.2 The last sentence of Section 6.4 of the Existing Warrant Agreement is hereby deleted in its entirety and replaced as follows:

“Private Placement Warrants that are transferred to persons other than Permitted Transferees shall upon such transfer be treated as Public Warrants under this Agreement, except (i) that Private Placement Warrants shall continue to be exercisable for one fully paid and non-assessable share of Common Stock at an exercise price per share of Common Stock of $11.50, as set forth in Exhibit A hereto, and (ii) Private Placement Warrants shall not be treated as Public Warrants for purposes of Section 2.3.1 of this Agreement.”

1.2 The Anti-Dilution Amendment. Section 4.1.2 of the Existing Warrant Agreement is hereby deleted in its entirety and replaced as follows:

“4.1.2 Extraordinary Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a distribution in cash, securities or other assets to the holders of the Common Stock on account of such shares of Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible), other than (a) as described in subsection 4.1.1 above, (b) regular monthly, quarterly or other periodic cash dividends or cash distributions, (c) any other cash dividend or distribution required to be paid in order for the Company to qualify or maintain its status as a real estate investment trust within the meaning of the Internal Revenue Code of 1986, as amended, or otherwise avoid the imposition of U.S. federal and state income and excise taxes, so long as the Company qualifies or is seeking to maintain its status as a real estate investment trust at the time of such cash dividend or distribution, (d) to satisfy the redemption rights of the holders of the Common Stock in connection with a proposed initial Business Combination, (e) as a result of the repurchase of shares of Common Stock by the Company if a proposed Business Combination is presented to the stockholders of the Company for approval, (f) to satisfy the redemption rights of the holders of Common Stock in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of the public shares of Common Stock if the Company does not complete the Business Combination within the period set forth in the Company’s amended and restated certificate of incorporation or (g) in connection with the redemption of public shares of Common Stock upon the failure of the Company to complete its initial Business Combination and any subsequent distribution of its assets upon its liquidation (any such non-excluded event being referred to herein as an “Extraordinary Dividend”), then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and/or the fair market value (as determined by the Board, in good faith) of any securities or other assets paid on each share of Common Stock in respect of such Extraordinary Dividend.”

1.3 Warrant Price. Section 3.1 of the Existing Warrant Agreement is hereby deleted in its entirety and replaced as follows:

“3.1 Warrant Price. Each Warrant shall, when countersigned by the Warrant Agent, entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of shares of Common Stock, at such price equal to the Exercise Price described in Exhibit A for such Public Warrants and Private Placement Warrants, as applicable (each subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1); provided, however, that a Public Warrant may not be exercised for a fractional share, so that only a multiple of four Public Warrants may be exercised at a given time. The term “Warrant Price” as used in this Agreement shall mean the Exercise Price (as specified in Exhibit A hereto) at which shares of Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of not less than twenty (20) Business Days, provided, that the Company shall provide at least twenty (20) days prior written notice of such reduction to Registered Holders of the Warrants and, provided further that any such reduction shall be identical among all of the Warrants.”

1.4 The Warrant Cash Payment. A new Section 7.4.3 is hereby inserted in to the Existing Warrant Agreement and shall read as follows:

“7.4.3 Mandatory Cash Distribution. Notwithstanding anything contained in this Agreement to the contrary, at the Effective Time (as defined in the Merger Agreement), each Public Warrant issued and outstanding immediately prior to the Effective Time shall, automatically and without any action by the Registered Holder thereof, be entitled to receive a cash distribution payable by or at the direction of the Company as soon as reasonably practicable following the Effective Time, upon receipt of any documents as may reasonably be required by the Warrant Agent, in the amount of $1.60.”

1.5 Form of Warrant Certificate. The second and third paragraphs of Exhibit A to the Existing Warrant Agreement are hereby deleted and replaced as follows:

“Each Public Warrant is exercisable for one-quarter of one fully paid and non-assessable share of Common Stock. The Exercise Price per share of Common Stock for any Public Warrant is equal to $2.875 per one-quarter share ($11.50 per whole share); provided, however, that a Public Warrant may not be exercised for a fractional share, so that only a multiple of four Public Warrants may be exercised at a given time.

Each Private Placement Warrant is exercisable for one fully paid and non-assessable share of Common Stock. The Exercise Price per share of Common Stock for any Private Placement Warrant is equal to $11.50 per share.

No fractional shares will be issued upon exercise of any Warrant. If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in a share of Common Stock, the Company will, upon exercise, round down to the nearest whole number. The number of shares of Common Stock issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.”

2 Miscellaneous Provisions.

2.1 Effectiveness of Warrant. Each of the parties hereto acknowledges and agrees that the effectiveness of this Agreement shall be expressly subject to the closing of the Merger Agreement and shall automatically be terminated and shall be null and void if the Merger Agreement shall be terminated or fail to close for any reason.

2.2 Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.

2.3 Applicable Law. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

2.4 Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

2.5 Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.

2.6 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

2.7 Entire Agreement. The Existing Warrant Agreement, as modified by this Agreement, constitutes the entire understanding of the parties and supersedes all prior agreements, understandings, arrangements, promises and commitments, whether written or oral, express or implied, relating to the subject matter hereof, and all such prior agreements, understandings, arrangements, promises and commitments are hereby canceled and terminated.

[Signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

	TRINITY MERGER CORP.

	By:	/s/ Sean A. Hehir
		Name: Sean A. Hehir
		Title: President and Chief Executive Officer

	CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent

	By:	/s/ Ana Gois
		Name: Ana Gois
		Title: Vice President

[Signature Page to Amendment of Warrant Agreement]

Exhibit 4.5

SECOND AMENDMENT OF

WARRANT AGREEMENT

THIS SECOND AMENDMENT OF WARRANT AGREEMENT (this “Agreement”), made as of November 14, 2019, is made by and among Broadmark Realty Capital Inc., a Maryland corporation (“Broadmark Realty”), and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (“Continental”), and American Stock Transfer & Trust Company, LLC, a New York limited liability trust company (“AST”).

WHEREAS, Trinity Merger Corp., a Delaware corporation (“Trinity”) and Continental are parties to that certain Warrant Agreement, dated as of May 14, 2018 and filed with the United States Securities and Exchange Commission (“SEC”) on May 17, 2018, and amended (the “First Amendment”) on November 14, 2019 (as modified, the “Existing Warrant Agreement”), pursuant to which Trinity issued 34,500,000 warrants (the “Public Warrants”) in its initial public offering and 12,350,000 private placement warrants (“Private Placement Warrants”, together with the Public Warrants, the “Warrants”), each representing the right to purchase one share of Class A common stock, par value $0.0001, of Trinity (“Common Stock”);

WHEREAS, capitalized terms used herein, but not otherwise defined, shall have the meanings given to such terms in the Existing Warrant Agreement;

WHEREAS, effective as of August 9, 2019, Trinity entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Broadmark Realty Capital Inc. (formerly known as Trinity Sub Inc.), a Maryland corporation and wholly owned subsidiary of Trinity, Trinity Merger Sub I Inc., a Delaware corporation and wholly owned subsidiary of Broadmark Realty (“Merger Sub I”), Trinity Merger Sub II LLC, a Delaware limited liability company and wholly owned subsidiary of Broadmark Realty, PBRELF I, LLC, a Washington limited liability company, BRELF II, LLC, a Washington limited liability company, BRELF III, LLC, a Washington limited liability company, BRELF IV, LLC, a Washington limited liability company, Pyatt Broadmark Management, LLC, a Washington limited liability company, Broadmark Real Estate Management II, LLC, a Washington limited liability company, Broadmark Real Estate Management III, LLC, a Washington limited liability company, and Broadmark Real Estate Management IV, LLC, a Washington limited liability company;

WHEREAS, the Merger Agreement provides, among other things, that each share of Common Stock issued and outstanding immediately prior to the the effective time of merger of Merger Sub I with and into the Trinity, with Trinity being the surviving entity of such merger (such merger, the “Trinity Merger”, and such effective time of the Trinity Merger, the “Trinity Effective Time”) shall automatically be converted into one validly issued, fully paid and non-assessable share of common stock of Broadmark Realty, par value $0.001 (“Broadmark Realty Common Stock”) and (ii) each Warrant that is outstanding immediately prior to the Trinity Effective Time, shall represent the right to acquire shares of Broadmark Realty Common Stock, on the same contractual terms and conditions as were in effect immediately prior to the Trinity Effective Time, under the terms of the Existing Warrant Agreement as amended by this Agreement;

WHEREAS, the transactions contemplated by the Merger Agreement closed on the date of this Agreement;

WHEREAS, pursuant to Section 4.4 of the Existing Warrant Agreement, Broadmark Realty, as successor-in-interest to Trinity, desires to execute this Agreement with the Warrant Agent providing for delivery of Broadmark Realty Common Stock to holders of Warrants in lieu of Common Stock, when exercising their right to acquire shares of Common Stock, on the same contractual terms and conditions as were in effect immediately prior to the closing of the Trinity Effective Time, subject only to the modified terms resulting from the First Amendment;

WHEREAS, Continental has agreed to resign its duties as the Warrant Agent as of the date hereof, and AST has agreed to serve as successor Warrant Agent from and after the date hereof; and

WHEREAS, pursuant to Section 9.8 of the Existing Warrant Agreement, the parties may amend the Existing Warrant Agreement without the consent of the Registered Holders.

1 Amendment of Existing Warrant Agreement. The parties hereby amend, effective as of the date of this Agreement, the Existing Warrant Agreement as provided in this Section 1.

1.1 Farallon Warrants Amendment. A new Section 2.6 is hereby inserted in to the Existing Warrant Agreement and shall read as follows:

“2.6 PIPE Warrants. The Company has issued an aggregate of 7,174,613 warrants to certain entities affiliated with Farallon Capital Management, L.L.C. (the “PIPE Warrants”). PIPE Warrants shall be deemed to be Public Warrants for purposes of this Agreement in all respects, including Exhibit A hereto; provided, however, that the PIPE Warrants shall bear the following legend:

THIS SECURITY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER OF THIS SECURITY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) PURSUANT TO ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (II) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (III) TO THE ISSUER OF THIS SECURITY, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL NOTIFY ANY SUBSEQUENT PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. THE ISSUER OF THIS SECURITY MAY REQUIRE THE DELIVERY OF A WRITTEN OPINION OF COUNSEL, CERTIFICATIONS AND/OR ANY OTHER INFORMATION IT REASONABLY REQUIRES TO CONFIRM THE SECURITIES ACT EXEMPTION FOR SUCH TRANSACTION.”

1.2 Alternative Issuance Amendment. A new Section 4.9 is hereby inserted in to the Existing Warrant Agreement and shall read as follows:

“4.9 Alternative Issuance; Right to acquire Broadmark Realty Common Stock. In connection with the Company consummating its initial Business Combination as of November [15], 2019, the Warrants now represent the right to acquire shares of common stock, par value $0.001, of Broadmark Realty Capital Inc., a Maryland corporation and successor-in-interest to the Company as a result of the Business Combination (“Broadmark Realty Common Stock”), in lieu of the right to acquire shares of Common Stock. For the avoidance of doubt the right to acquire shares of Broadmark Realty Common Stock shall be on the same terms and conditions as and replace the right to acquire shares of Common Stock, as set forth in this Agreement.”

1.3 Change in Warrant Agent Amendment. References to “Continental Stock Transfer & Trust Company” in the Existing Warrant Agreement shall be replaced with “American Stock Transfer & Trust Company”.

1.4 Change of Address of Warrant Agent. Section 9.2 of the Existing Warrant Agreement is hereby amended to direct that any notice, statement or demand authorized by the Existing Warrant Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company pursuant to Section 9.2 shall be delivered to:

American Stock Transfer & Trust Company

48 Wall Street, 22^nd Floor

New York, NY 10005

Email: Reorgwarrants@astfinancial.com

1.5 Change of Address of Company. Section 9.2 of the Existing Warrant Agreement is hereby amended to direct that any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company pursuant to Section 9.2 shall be delivered to

Broadmark Realty Capital Inc.

1420 Fifth Avenue, Suite 2000

Seattle, WA 98101

Attention: Adam Fountain

2 Warrant Agent Succession and Resignation of Current Warrant Agent and Appointment of Successor. Continental hereby resigns as Warrant Agent, and Broadmark Realty hereby appoints AST to act as the Warrant Agent for Broadmark Realty for the Warrants, and AST hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in the Existing Agreement as modified by this Agreement.

3 Miscellaneous Provisions.

3.1 Successors. All the covenants and provisions of this Agreement by or for the benefit of the parties shall bind and inure to the benefit of their respective successors and assigns.

3.2 Applicable Law. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. Broadmark Realty hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. Broadmark Realty hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

3.3 Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

3.4 Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.

3.5 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

3.6 Entire Agreement. The Existing Warrant Agreement, as modified by this Agreement, constitutes the entire understanding of the parties and supersedes all prior agreements, understandings, arrangements, promises and commitments, whether written or oral, express or implied, relating to the subject matter hereof, and all such prior agreements, understandings, arrangements, promises and commitments are hereby canceled and terminated.

[Signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

	BROADMARK REALTY CAPITAL INC.

	By:	/s/ Jeffrey B. Pyatt
		Name: Jeffrey B. Pyatt
		Title: Chief Executive Officer

	CONTINENTAL STOCK TRANSFER & TRUST COMPANY

	By:	/s/ Ana Gois
		Name: Ana Gois
		Title: Vice President

	AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

	By:	/s/ Michael Legregin
		Name: Michael Legregin
		Title: SVP, Attorney Advisory Group

[Signature Page to Second Amendment of Warrant Agreement]

Exhibit 10.1

Execution Version

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”), dated as of August 9, 2019, is entered into by and between Trinity Sub, Inc., a Maryland corporation (the “Company”), and Jeffrey B. Pyatt, an individual (“Employee”).

RECITALS

A. Pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of August 9, 2019, by and among the Company, Trinity Merger Corp., a Delaware corporation, Trinity Merger Sub I, Inc., a Delaware corporation, Trinity Merger Sub II, LLC, a Delaware limited liability company, PBRELF I, LLC, a Washington limited liability company, BRELF II, LLC, a Washington limited liability company, BRELF III, LLC, a Washington limited liability company, BRELF IV, LLC, a Washington limited liability company, Pyatt Broadmark Management, LLC, a Washington limited liability company, Broadmark Real Estate Management II, LLC, a Washington limited liability company, Broadmark Real Estate Management III, LLC, a Washington limited liability company, and Broadmark Real Estate Management IV, LLC, a Washington limited liability company, the Company will become the direct or indirect owner of various entities engaged in real estate activities; and

B. Effective as of the Effective Time (as defined in the Merger Agreement) (the “Effective Time”), Employee wishes to accept employment with the Company upon the terms and conditions set forth in this Agreement.

AGREEMENT

In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Employment. The Company shall employ Employee, and Employee accepts employment with the Company, upon the terms and conditions set forth in this Agreement. Employee’s term of employment hereunder shall commence at the Effective Time and continue until the third anniversary of the Effective Time (the “Employment Period”); provided that, unless earlier terminated, the Employment Period shall automatically renew on the third anniversary of the Effective Time and on each anniversary thereafter for a period of one (1) year unless either party shall give written notice of nonextension to the other party not later than sixty (60) days prior to the end of then-current Employment Period. The Company or Employee may terminate this Agreement and Employee’s employment at any time during the Employment Period as provided in Section 4 hereof. For the avoidance of doubt, if the Merger Agreement is terminated or the Effective Time does not occur for any reason, this Agreement shall be null and void.

2. Position and Duties.

(a) During the Employment Period, Employee shall serve as the Chief Executive Officer of the Company, and shall have the usual and customary duties, responsibilities and authority of a Chief Executive Officer. Employee acknowledges and agrees that he shall perform his duties and responsibilities faithfully and to the best of his abilities in a businesslike manner.

(b) Employee shall report to the Board of Directors of the Company (the “Board”), shall work on a full-time basis for the Company and shall devote substantially all of his business time, attention, skills and energies to the business and affairs of the Company. During the Employment Period, Employee shall not engage in any business activity which, in the reasonable judgment of the Board, conflicts with the duties of Employee hereunder, whether or not such activity is pursued for gain, profit or other pecuniary advantage. Employee agrees that he shall promptly report any potential conflict in writing to the Board, affirmatively disclosing any outside business opportunity that presents even the appearance of a conflict.

3. Base Salary and Benefits.

(a) Base Salary. During the Employment Period, Employee’s base salary shall be $400,000.00 per annum (the “Base Salary”), which shall be payable in regular installments in accordance with the Company’s general payroll practices. This annual Base Salary shall be prorated for 2019 based upon the Effective Time through the end of the calendar year. Annual compensation review and increases, if any, will be subject to approval by the Board. However, the Base Salary may not be decreased during the Employment Period other than as part of an across-the-board salary reduction for senior executives of the Company.

(b) Bonus. At the conclusion of each fiscal year during the Employment Period, in addition to the Base Salary, Employee may be eligible to receive an annual bonus (the “Annual Bonus”) in an amount to be established by the Board. The amount of the Annual Bonus will be based on achievement of certain annual operating profit targets and other objectives established by the Board, and the target Annual Bonus, assuming that all performance goals are satisfied at the target level of performance, shall be sixty-two and one half percent (62.5%) of the Base Salary. The Annual Bonus shall be prorated for 2019 based upon the Effective Time through the end of the calendar year. Any Annual Bonus shall be paid promptly following the completion of the annual audit for the calendar year to which it relates, and in all events no later than March 15th of the calendar year following the calendar year to which it relates.

(c) Vacation. During the Employment Period, Employee shall be entitled to paid vacation in accordance with Company policy.

(d) Expenses. The Company shall reimburse Employee for all reasonable expenses incurred by him in the course of performing his duties under this Agreement which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses (“Business Expenses”), subject to the Company’s requirements with respect to reporting and documentation of such expenses.

(e) Benefits. Employee will be eligible to participate in such health care, insurance, retirement, and other employee benefit plans as are generally made available by the Company to their employees, subject to the terms of said plan or plans. The terms of such plans are subject to change or termination at any time, with or without notice, at the discretion of the Company.

4. Termination. The Employment Period shall terminate as follows.

(a) Termination by Employee without Good Reason. In the event that Employee terminates his employment for any reason other than for Good Reason, Employee must provide the Company with written notice of such resignation. Employee will use his best efforts to provide the Company with such written notice at least sixty (60) days in advance of the effective date of the termination. In the event that at least sixty (60) days’ advance written notice is not provided, Employee agrees to be available as a resource to the Company for the transition of his responsibilities for a number of days equal to sixty (60) minus the number of days’ written notice provided.

(b) Termination by Employee for Good Reason. Employee may terminate his employment hereunder for Good Reason. “Good Reason” means (i) a material and sustained diminution in Employee’s duties under this Agreement or a reduction of Employee’s title, (ii) a material breach by the Company of this Agreement, (iii) relocation of Employee’s principal place of employment to a location that is more than fifty (50) miles from Employee’s place of employment as of the Effective Time, without Employee’s consent, (D) a reduction in the Base Salary, unless such reduction is part of an across the board reduction for senior executives of the Company, or (E) a material reduction in the Employee’s target Annual Bonus; provided that any such action shall not constitute Good Reason unless (A) Employee provides written notice to the Company of any such action within thirty (30) days of the date on which such action first occurs and provides the Company with thirty (30) days to remedy such action (the “Cure Period”), (B) the Company fails to remedy such action within the Cure Period, and (C) Employee resigns within thirty (30) days of the expiration of the Cure Period.

(i) Termination by the Company for Cause. The Company may terminate Employee’s employment for Cause (“Termination for Cause”). “Cause” shall mean any of the following:

(1)

Any act of fraud, embezzlement, theft, intentional dishonesty, misrepresentation or breach of fiduciary duty with respect to the Company or its subsidiaries;

(2)

Employee’s gross negligence or willful misconduct in the performance of his duties to the Company;

(3)

Failure or refusal to follow any reasonable directive of the officer to whom Employee reports, and if such failure and refusal is curable, if such failure or refusal is not cured within fifteen (15) days after the Company’s written notice to Employee of such failure or refusal;

(4)

Employee’s (1) breach of Sections 6, 7 or 8 of this Agreement; (2) breach of any material written policy of the Company which if curable, is not cured within fifteen (15) days after the Company’s written notice of such breach; or (3) material breach of this Agreement, which if curable, is not cured within fifteen (15) days after the Company’s written notice of such breach; or

(5)

Employee’s conviction of, indictment for or entering of a guilty plea or plea of no contest or nolo contendere with respect to any felony or any crime involving an act of moral turpitude.

The Company may terminate this Agreement pursuant to a Termination for Cause at any time immediately upon notice to Employee.

(ii) Termination by the Company without Cause. The Company may terminate Employee’s employment without Cause (i.e. for any reason other than those described in Subsections 4(b)(i), and 4(c)) (“Termination without Cause”) at any time upon written notice to Employee.

(d) Death and Disability. Employee’s employment shall terminate immediately upon Employee’s death and the Company may terminate this Agreement upon thirty (30) days’ prior written notice to Employee if, by virtue of a physical or mental condition, Employee is unable to perform the essential functions of his work under this Agreement, with or without reasonable accommodation, for a period of one hundred eighty (180) days in any three hundred and sixty-five (365) day period (“Disability”). Any question as to the existence of the Employee’s Disability as to which the Employee and the Company cannot agree shall be determined in writing by a qualified independent physician selected by the Company and reasonable acceptable to the Employee. If the Employee and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and the Employee shall be final and conclusive for all purposes of this Agreement.

(e) Obligations upon Termination.

(i) In the event of a resignation by Employee without Good Reason, as described in Subsection 4(a), all of the parties’ respective rights and obligations hereunder shall immediately terminate upon the expiration of the notice period required under Section 4(a) or upon notice by the Company waiving such notice, except that (A) Employee’s obligations and the Company’s rights under Sections 5 through 12 of this Agreement shall survive such termination and (B) the Company shall pay to Employee only the Base Salary and, in accordance with Company policy, accrued vacation, together with any unreimbursed Business Expenses as of the date of termination (collectively, the “Accrued Benefits”).

(ii) In the event of a Termination for Cause, as described in Subsection 4(c)(i), all of the parties’ respective rights and obligations hereunder shall terminate upon the effective date of such termination, except that (A) Employee’s obligations and the Company’s rights under Sections 5 through 12 of this Agreement shall survive such termination and (B) the Company shall pay to Employee only the Accrued Benefits.

(iii) In the event of a Termination without Cause, as described in Subsection 4(c)(ii), or Employee’s resignation for Good Reason pursuant to Section 4(b), all of the parties’ respective rights and obligations hereunder shall terminate upon the effective date of such termination pursuant to Subsection 4(c)(ii) or Subsection 4(b) as the case may be, except that (A) Employee’s obligations and the Company’s rights under Sections 5 through 12 of this Agreement shall survive such termination; (B) the Company shall pay Employee the Accrued Benefits; (C) the Company shall pay Employee, as severance, an amount equal to twenty-four (24) months of Employee’s then-current Base Salary payable in regular installments in accordance with the Company’s general payroll practices; and (D) the Company shall provide a payment in the amount equal to the premium for COBRA benefits under the Company’s group health plan for twenty-four (24) months, which the Employee may at Employee’s option, use to procure continuing benefits, payable in monthly installments on the first pay date for each month (the payments under Sections (C) and (D) are collectively referred to as the “Severance Payment”). The payment of the Severance Payment under this Subsection 4(e)(iii) shall be conditioned upon Employee’s effective execution of a full release of claims against the Company in a form reasonably satisfactory to the Company. The Company shall specify a period, not to exceed forty-five (45) days following termination, during which Employee may review and consider such release, provided that if such period spans two (2) calendar years, then the Severance Payment shall not be made until the second calendar year, regardless of the year in which the release is signed and returned.

(iv) In the event of Employee’s death or Disability, as described in Subsection 4(d), all of the parties’ respective rights and obligations hereunder shall immediately terminate upon the effective date of such termination pursuant to Subsection 4(d), except that (A) Employee’s obligations and the Company’s rights under Sections 5 through 12 of this Agreement shall survive such termination; (B) the Company shall pay to Employee the Accrued Benefits, and (C) the Company shall provide a payment in the amount equal to the premium for COBRA benefits under the Company’s group health plan for twelve (12) months, which the Employee or his estate, if applicable, may use to procure continuing benefits, payable in monthly installments on the first pay date for each month.

(v) Except as otherwise required by law (e.g., COBRA) or as specifically provided herein, all of Employee’s rights to salary, severance, fringe benefits and bonuses hereunder (if any) shall cease upon termination for any reason.

(vi) Upon termination of Employee’s employment hereunder for any reason, Employee shall promptly resign from all other positions with the Company and its affiliates.

5. Acknowledgments.

(a) Employee acknowledges and agrees that as a result and as part of Employee’s employment with the Company, he has received and will receive knowledge and expertise in the Business of the Company that is special and unique. As used in this Agreement, the term “Business” shall mean the business of (i) originating mortgages, lending money or other financing, in each case, for the purpose of acquiring, developing or otherwise financing real estate and related assets or the operation of a real estate investment fund or such other fund, real estate investment trust or other entity that participates in the foregoing described real estate-related activities within the United States, whether through origination activities or in the secondary market (including, without limitation, through the acquisition of real estate related loans or interests therein) or (ii) Fundraising for, on behalf of, or with respect to persons engaged in the activities referenced in clause (i).

(b) For purposes of this Agreement, the term “Fundraising” means any action of a person to secure third-party equity investments in a commercial business venture or investment fund, including but not limited to direct and indirect solicitation, marketing and distribution of investment material related to such commercial business venture or investment fund.

(c) For purposes of this Agreement, the term “Confidential Information” means any confidential or proprietary information of the Company, which is not already or does not become generally available to the public (but not through any breach of confidentiality by Employee), whether contained in documents, electronic media or other forms, including, but not limited to, information about materials, procedures, inventions, processes, manufacturing, expertise, customer lists, potential customer lists, customer data, financial data, vendors, marketing plans, and trade secrets. Confidential Information shall also include personal information of the Company’s customers, clients, employees, and vendors (“Personal Information”).

(d) Employee acknowledges and agrees that the restrictive covenants and other continuing obligations in this Agreement are reasonable and necessary and that consideration and compensation provided to Employee pursuant to this Agreement constitute good and sufficient consideration for Employee’s agreements and covenants in Sections 6, 7 and 8.

(e) For purposes of Sections 5 through 9, the term “Company” includes both the Company and its direct and indirect subsidiaries.

6. Nondisclosure and Nonuse of Confidential Information; Nondisparagement.

(a) Employee acknowledges and agrees that he will be afforded access to Confidential Information which could have an adverse effect on the Company and its Business if it is used in an unauthorized manner and/or disclosed. Employee will not, at any time, either during the Employment Period or thereafter, disclose or use any Confidential Information, or permit any person to use, examine or make copies of any Confidential Information, except as may be required in his duties on behalf of the Company or any of its subsidiaries. Employee agrees to take reasonable measures to protect the secrecy of, and avoid the disclosure and the unauthorized use of, any Confidential Information.

(b) Employee shall deliver to the Company at the termination of the Employment Period, or at any time the Company may request, all memoranda, notes, plans, records, reports, files, electronic data, computer tapes, software and other documents and data (and copies thereof) that is Confidential Information or Personal Information or Work Product (each as defined herein) or other information relating to the Business of the Company which Employee may then possess or have under his control. Notwithstanding the foregoing, Employee will have the right to retain and remove all personal property and effects which are owned by Employee.

(c) Employee agrees that he will not view or access any Personal Information except as needed in the course of his job duties and responsibilities for the Company or any of its subsidiaries.

(d) Employee agrees not to make, or cause any other person to make, any public statement that criticizes or disparages the Company or any of its subsidiaries, executive officers, employees, directors or products. Nothing set forth herein shall be interpreted to prohibit Employee from responding publicly to incorrect public statements, making truthful statements when required by law, subpoena, court order, or the like and/or from responding to any inquiry about this Agreement or its underlying facts and circumstances by any regulatory or investigatory organization and/or from making any truthful statements in the course of any litigation.

(e) Pursuant to 18 U.S.C. § 1833(b), Employee will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret of the Company or any of its subsidiaries that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to Employee’s attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If Employee files a lawsuit for retaliation by the Company or any of its subsidiaries for reporting a suspected violation of law, Employee may disclose the trade secret to Employee’s attorney and use the trade secret information in the court proceeding, if Employee files any document containing the trade secret under seal and does not disclose the trade secret except under court order. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section.

7. Inventions and Patents. Employee agrees that all inventions, innovations, improvements, technical information, certifications, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable) which relates to the Company’s (or any predecessor’s) Business, research and development or existing or future products or services and which are conceived, developed or made by Employee (whether or not during usual business hours and whether or not alone or in-conjunction with any other person) in the course of his employment with the Company or relationship with the Company or any predecessor, together with all patent applications, letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing (collectively referred to herein as “Work Product”) belong to the Company. Employee hereby assigns and agrees to assign to the Company any rights he may have or acquire in such Work Product, whether created before, on, after or prior to the Effective Time. Employee agrees that his copyrightable works prepared for the Company are “supplementary works” or “works for hire,” as defined in Title 17 of the United States Code, and if any such works are deemed not to be a supplementary work or work for hire, then Employee hereby assigns and agrees to assign his entire right, title and interest in the copyright to such works to the Company. Employee will take reasonable steps to promptly disclose such Work Product to the Company and perform all actions reasonably requested by the Company (whether during or after the Employment Period) to establish and confirm such ownership (including the execution and delivery of assignments, consents, powers of attorney and other instruments) and to provide reasonable assistance to the Company in connection with the prosecution of any applications for patents, trademarks, trade names, service marks or reissues thereof or in the prosecution or defense of interferences relating to any Work Product, to the extent the assistance of Employee is reasonably required to prosecute such applications or reissues thereof or to prosecute or defend such interferences.

8. Non-Competition and Non-Solicitation.

(a) Employee acknowledges that, in the course of his employment with the Company he will become familiar with the Company’s and its respective predecessors’ trade secrets and with other Confidential Information concerning the Company and its respective predecessors and that his services have been and will be of special, unique and extraordinary value to the Company. Employee agrees that, in consideration of his employment as contemplated under this Agreement and all compensation and benefits being provided herein, it is both reasonable and fair as well as necessary for the protection of the Company’s confidential information, good will in the marketplace, and other protectable business interests, that he be subject to certain limitations in his activities in the event of this Agreement’s termination by either party for any reason.

(b) Therefore, in consideration of the foregoing, Employee agrees that, for a period of twenty-four (24) months following termination of employment for any reason, he will not (i) engage in, sell or provide any products or services which are the same as or similar to or otherwise competitive with the products and services sold or provided by the Company; (ii) own, acquire, or control any interest, financial or otherwise, in any entity or business engaged in selling or providing the same, similar or otherwise competitive services or products which the Company is selling or providing in connection with the Business; (iii) call on or solicit which may interfere with or impair the relationship between the Company and any current or prospective customer, supplier, distributor, developer, service provider or other material business relation of the Company in connection with the Business; and (iv) act or provide services as a consultant or advisor or loan or otherwise provide financing or financial assistance of any kind, to any third party who is or is attempting, directly or indirectly, to engage in any of the activities listed in subsections (i) through (iii) above; provided that nothing in this Subsection (b) shall prohibit Employee from owning less than five percent (5%) of the outstanding shares of any public company as long as Employee has no other role with such company.

(c) In addition, in consideration of the foregoing, Employee agrees that, for a period of twelve (12) months following any termination of employment, Employee shall not, directly or indirectly, through another person or entity (i) induce, attempt to induce, or solicit any employee of the Company to terminate his employment with the Company, or in any way interfere with the relationship between the Company, on the one hand, and any employee thereof, on the other hand, (ii) employ, hire, induce, attempt to induce, or solicit the employment of any former employee of the Company until one (1) year after such employee’s employment relationship with the Company has been terminated, (iii) call on, solicit, service, divert or take away or attempt to call on, solicit, service, divert or take away any customer, supplier, contractor, designer, licensee or other business relation of the Company with respect to products or services related to the Company’s Business as of the date of this Agreement’s termination or induce any of such parties to cease doing business with the Company, or in any way interfere with the relationship between any such customer, supplier, contractor, designer, licensee or business relation, on the one hand, and the Company, on the other hand, or (iv) make any statement or do any act to impair, prejudice or destroy the goodwill of the Company, to prejudice or impair the relationship or dealing between the Company and any of its customers, suppliers, contractors, designers, licensees, employees or other business relations, or to cause existing or potential customers of the Company to make use of the services or purchase the services or products of any competitive business.

9. Enforcement.

(a) If Employee breaches or threatens to commit a breach of any of the covenants set forth in Sections 6, 7, and 8 above, then the Company shall have the right to seek to have the covenants in Sections 6, 7, and 8 specifically enforced against Employee, including temporary restraining orders and injunctions by any court of competent jurisdiction, in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security), it being agreed by Employee that any breach or threatened breach by Employee of Sections 6, 7, and 8 would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company. The prevailing party is entitled to its attorneys’ fees and costs incurred in relation to any action addressing Sections 6, 7, and 8 of this Agreement. In addition, the Company shall not be required to post any bond or other surety as a condition to the issuance of any temporary restraining order or injunction, and Employee irrevocably waives any such requirement of any statute or applicable law.

(b) If, during the enforcement of any or all of the covenants and provisions set forth in Sections 6, 7, and 8 above, any court of competent jurisdiction enters a final judgment that declares that the duration, scope, or area restrictions stated therein are unreasonable under circumstances then existing, are invalid, or are otherwise unenforceable, then the parties hereto agree that the maximum enforceable duration, scope, or area reasonable under such circumstances shall be substituted for the stated duration, scope, or area, and that the court making the determination of invalidity or unenforceability shall have the power to revise the scope, duration, or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes the closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified to cover the maximum duration, scope, or area permitted by law.

(c) If any of the provisions of Sections 6, 7, and 8 are violated, then the time limitations set forth in those sections shall be extended for a period of time equal to the period of time during which such breach occurs, and, in the event the Company is required to seek relief from such breach before any court, board or other tribunal, then the time limitation shall be extended for a period of time equal to the pendency of such proceedings, including all appeals.

10. Insurance. The Company may, for its own benefit, maintain “key man” life and disability insurance policies covering Employee. Employee will reasonably cooperate with the Company and provide such information or other assistance as the Company or insurance company may reasonably request in connection with the Company obtaining and maintaining such policies.

11. Representations and Warranties. Employee hereby represents and warrants to the Company that (a) the execution, delivery and performance of this Agreement by Employee does not and will not conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Employee is a party or any judgment, order or decree to which Employee is subject, (b) Employee is not and will not be a party to or bound by any employment agreement, consulting agreement, non-compete agreement, confidentiality agreement or similar agreement with any other person or entity that is inconsistent with the provisions of this Agreement and (c) this Agreement is a valid and binding obligation of Employee.

12. Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or e-mail (b) on the first business day following the date of dispatch if delivered utilizing an overnight delivery service or (c) three (3) days after mailing (or one (1) business day in the case of overnight delivery service). All notices hereunder shall be delivered to the addresses set forth below as follows:

If to Employee:

Jeffrey B. Pyatt

1420 5th Avenue, Suite 2000

Seattle, Washington 98101

Email: jeff@pyattlending.com

If to the Company:

Broadmark Realty Capital Corp.

1420 Fifth Avenue, Suite 2000

Seattle, WA 98101

Facsimile: 206-623-2213

Attention: President

Email: TMCXnotices@trinityinvestments.com

with a copy to:

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, New York 10166

Attention: Glenn Pollner

E-mail: GPollner@gibsondunn.com

or to such other address as the parties hereto may designate in writing to the other in accordance with this Section 12. Any party may change the address to which notices are to be sent by giving written notice of such change of address to the other parties in the manner above provided for giving notice.

13. General Provisions.

(a) Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

(b) Complete Agreement. Except as set forth above with respect to the Profits Units, this Agreement represents the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes and cancels all other contracts, agreements, representations and understandings between the parties or their affiliates, whether written or oral, expressed or implied. This Agreement shall bind and inure to the benefit of each party, their parent companies, subsidiaries and affiliates, and each of their respective officers, directors, shareholders, investors, business associates, owners, partners, employees, representatives, agents, contractors and assigns. The terms of this Agreement are the result of negotiations in which each party had the opportunity to review and revise any term herein. Consequently, this Agreement shall not be construed for or against either party as a result of the manner in which it was drafted.

(c) Successors and Assigns. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of Employee and the Company and its respective successors, permitted assigns, personal representatives, heirs and estates, as the case may be; provided, however, that the rights and obligations of Employee under this Agreement shall not be assigned without the prior written consent of the Company and the Company may assign the rights and obligations of this Agreement to any affiliate of the Company or any successor or permitted assign of the Company’s business or assets, and such assignment by the Company will not constitute a termination under Section 4.

(d) Governing Law. THIS AGREEMENT, AND ALL CLAIMS, DISPUTES AND CONTROVERSIES RELATED HERETO OR ARISING HEREFROM, SHALL BE GOVERNED BY, AND CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. NO DEFENSE, COUNTERCLAIM OR RIGHT OF SET-OFF GIVEN OR ALLOWED BY THE LAWS OF ANY OTHER STATE OR JURISDICTION, OR ARISING OUT OF THE ENACTMENT, MODIFICATION OR REPEAL OF ANY LAW, REGULATION, ORDINANCE OR DECREE OF ANY FOREIGN JURISDICTION, BE INTERPOSED IN ANY ACTION HEREON. THE PROVISIONS OF THIS AGREEMENT SHALL BE ENFORCEABLE NOTWITHSTANDING THE EXISTENCE OF ANY CLAIM OR CAUSE OF ACTION OF EMPLOYEE AGAINST COMPANY, WHETHER PREDICATED ON THIS AGREEMENT OR OTHERWISE.

(e) Jurisdiction; Waiver of Jury Trial. EMPLOYEE HEREBY VOLUNTARILY, UNCONDITIONALLY AND IRREVOCABLY AGREES AND SUBMITS TO THE JURISDICTION OF THE FEDERAL AND STATE COURTS OF THE STATE OF MARYLAND AND APPELLATE COURTS FROM ANY THEREOF FOR ANY CLAIM, ACTION OR DISPUTE ARISING OUT OF OR RELATED TO THIS AGREEMENT, AND WAIVES AND AGREES NOT TO ASSERT ANY DEFENSE THAT ANY SUCH COURT LACKS JURISDICTION, VENUE IS IMPROPER, OR THE FORUM IS INCONVENIENT. EMPLOYEE AND COMPANY HEREBY IRREVOCABLY AND KNOWINGLY WAIVE (TO THE FULLEST EXTENT PERMITTED BY LAW) ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING, WITHOUT LIMITATION, ANY COUNTERCLAIM) ARISING OUT OF THIS AGREEMENT OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO, INCLUDING, WITHOUT LIMITATION, ANY ACTION OR PROCEEDING: (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR (II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS AGREEMENT. COMPANY AND EMPLOYEE AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.

(f) Withholdings. All payments hereunder are subject to withholding for applicable federal, state and local income and employment taxes and any other deductions authorized by Employee or required by law.

(g) Amendment and Waiver. The provisions of this Agreement may be amended and waived only with the prior written consent of the Board and Employee, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement or any provision hereof.

(h) Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

(i) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

(j) Business Days. If any time period for giving notice or taking action hereunder expires on a day which is not a business day in the State of New York, the time period for giving notice or taking action shall be automatically extended to the immediately following business day.

(k) Survival of Representations, Warranties and Agreements. All representations, warranties and agreements contained herein shall survive the termination of this Agreement. For the avoidance of doubt, Employee’s obligations under Sections 6 through 8 hereof shall survive termination of this Agreement for any reason (including, without limitation, upon nonrenewal of the agreement by either party).

(l) Section 409A. To the extent applicable, this Agreement shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A of the Internal Revenue Code of 1986, as amended, and the Department of Treasury regulations and other interpretive guidelines issued thereunder (collectively, “Section 409A”). Notwithstanding any provision to the contrary in this Agreement: (i) no amount that constitutes deferred compensation as defined in Section 409A shall be payable in connection with Employee’s termination of employment shall be paid to you unless the termination of your employment constitutes a “separation from service” within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations, and if Employee incurs a termination of employment that does not constitute a separation from service, as so defined, Employee’s right to such payments shall vest but payment shall be deferred until the date on which you incur a separation from service, or die; (ii) if, on the date on which Employee incurs a separation from service, Employee is a “specified employee” as defined in Section 409A, any amount that constitutes deferred compensation and that becomes payable by reason of such separation from service (including any amount described in clause (i)) shall be deferred until the earlier of the first day of the seventh month following the month that includes the separation from service or Employee’s death; (iii) for purposes of Section 409A, Employee’s right to receive installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments; and (iv) to the extent that any reimbursement of expenses or in-kind benefits constitutes “deferred compensation” under Section 409A, such reimbursement or benefit shall be provided no later than December 31 of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year.

(m) Nouns and Pronouns. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice-versa.

(n) Construction. Where specific language (such as the word “including”) is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party hereto.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first written above.

	TRINITY SUB INC.

	By:	/s/ Sean A. Hehir
	Name:	Sean A. Hehir
	Title:	President, Chief Executive Officer, Treasurer
		& Chief Financial Officer

[Signature continues on the following page]

SIGNATURE PAGE TO EMPLOYMENT AGREEMENT

	/s/ Jeffrey B. Pyatt
	Jeffrey B. Pyatt

SIGNATURE PAGE TO EMPLOYMENT AGREEMENT

Exhibit 10.2

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”), dated as of November 14, 2019, is entered into by and between Trinity Sub Inc., a Maryland corporation (the “Company”), and David Schneider, an individual (“Employee”).

RECITALS

AGREEMENT

In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Employment. The Company shall employ Employee, and Employee accepts employment with the Company, upon the terms and conditions set forth in this Agreement. Employee’s term of employment hereunder shall commence at December 9, 2019 (the “Start Date”) and continue until the third anniversary of the Start Date (the “Employment Period”); provided that, unless earlier terminated, the Employment Period shall automatically renew on the third anniversary of the Start Date and on each anniversary thereafter for a period of one (1) year unless either party shall give written notice of nonextension to the other party not later than sixty (60) days prior to the end of then-current Employment Period. The Company or Employee may terminate this Agreement and Employee’s employment at any time during the Employment Period as provided in Section 4 hereof. For the avoidance of doubt, if the Merger Agreement is terminated or the Effective Time does not occur for any reason, this Agreement shall be null and void (and, in the event this Agreement becomes void for such reason, the Company shall use its reasonable best efforts to help identify alternative employment for Employee).

2. Position and Duties.

(a) During the Employment Period, Employee shall serve as the Executive Vice President and Chief Financial Officer of the Company, and shall have the usual and customary duties, responsibilities and authority of an Executive Vice President and Chief Financial Officer. Employee acknowledges and agrees that he shall perform his duties and responsibilities faithfully and to the best of his abilities in a businesslike manner.

3. Base Salary and Benefits.

(a) Base Salary. During the Employment Period, Employee’s base salary shall be $350,000 per annum (the “Base Salary”), which shall be payable in regular installments in accordance with the Company’s general payroll practices. This annual Base Salary shall be prorated for the year in which the Start Date occurs based upon the Start Date through the end of the calendar year. Annual compensation review and increases, if any, will be subject to approval by the Board. However, the Base Salary may not be decreased during the Employment Period other than as part of an across-the-board salary reduction for senior executives of the Company.

(b) Bonus. At the conclusion of each fiscal year (commencing with the 2020 fiscal year) during the Employment Period, in addition to the Base Salary, Employee may be eligible to receive an annual bonus (the “Annual Bonus”) in an amount to be established by the Board. The amount of the Annual Bonus will be based on achievement of certain annual operating profit targets and other objectives established by the Board, and the target Annual Bonus, assuming that all performance goals are satisfied at the target level of performance, shall be $250,000 (which target amount shall be subject to the annual compensation review and increase (but not decrease) by the Board). If the Start Date occurs in fiscal 2020, the Annual Bonus shall be prorated for fiscal 2020 based upon the Start Date through the end of the calendar year. Any Annual Bonus shall be paid promptly following the completion of the annual audit for the calendar year to which it relates, and in all events no later than March 15th of the calendar year following the calendar year to which it relates.

(c) Vacation. During the Employment Period, Employee shall be entitled to paid vacation in accordance with Company policy.

(e) Signing Bonus. Employee shall be paid a one-time cash signing bonus of $150,000 in January 2020 (or, if the Start Date has not occurred, promptly following the Start Date), subject to Employee’s continued employment hereunder through the payment date. If Employee resigns his employment other than for Good Reason or his employment is terminated for Cause, in either case within one year following the Start Date, Employee shall promptly repay an amount equal to the product of $150,000 and a fraction, (i) the numerator of which is 12 minus the number of full months Employee is employed hereunder following the Start Date, and (ii) the denominator of which is 12.

(f) Relocation Expenses. The Company will provide Employee with (i) temporary housing for up to six months following the Start Date, (ii) travel to and from New York City until Employee’s family is able to relocate, and (iii) reimbursement for the reasonable costs of moving Employee’s household goods, subject to the Company’s requirements with respect to reporting and documentation of expenses. The total amount payable pursuant to this Section 3(f) will not exceed $50,000 (of which up to $5,000 may be paid in calendar 2019 and up to $45,000 may be paid in calendar 2020) and, if Employee resigns his employment other than for Good Reason or his employment is terminated for Cause, in either case within one year following the Start Date, Employee shall promptly repay an amount equal to the product of the amounts paid pursuant to this Section 3(f) and a fraction, (i) the numerator of which is 12 minus the number of full months Employee is employed hereunder following the Start Date, and (ii) the denominator of which is 12.

(g) Benefits. Employee will be eligible to participate in such health care, insurance, retirement, and other employee benefit plans as are generally made available by the Company to their employees, subject to the terms of said plan or plans. The terms of such plans are subject to change or termination at any time, with or without notice, at the discretion of the Company.

(h) Equity Grant. Promptly following the Start Date (or such later date on which a Form S-8 registration statement permits the grant of equity incentives to employees), the Company shall grant Employee restricted stock units (“RSUs”) with respect to Company common stock with a value of $600,000 as of the grant date. The RSUs shall vest in one-third increments on each of the first three anniversaries of the Start Date, subject to Employee’s continued employment through the applicable vesting date. The grant of the RSUs shall be subject to the Company’s equity incentive plan and a grant agreement between the Company and Employee.

4. Termination. The Employment Period shall terminate as follows.

(b) Termination by Employee for Good Reason. Employee may terminate his employment hereunder for Good Reason. “Good Reason” means (i) a material and sustained diminution in Employee’s duties under this Agreement or a reduction of Employee’s title, (ii) a material breach by the Company of this Agreement, (iii) relocation of Employee’s principal place of employment to a location that is more than fifty (50) miles from Employee’s place of employment as of the Start Date, without Employee’s consent, (D) a reduction in the Base Salary, unless such reduction is part of an across the board reduction for senior executives of the Company, or (E) a material reduction in the Employee’s target Annual Bonus; provided that any such action shall not constitute Good Reason unless (A) Employee provides written notice to the Company of any such action within thirty (30) days of the date on which such action first occurs and provides the Company with thirty (30) days to remedy such action (the “Cure Period”), (B) the Company fails to remedy such action within the Cure Period, and (C) Employee resigns within thirty (30) days of the expiration of the Cure Period.

(i) Termination by the Company for Cause. The Company may terminate Employee’s employment for Cause (“Termination for Cause”). “Cause” shall mean any of the following:

(1)

Any act of fraud, embezzlement, theft, intentional dishonesty, misrepresentation or breach of fiduciary duty with respect to the Company or its subsidiaries;

(2)

Employee’s gross negligence or willful misconduct in the performance of his duties to the Company;

(3)

Failure or refusal to follow any reasonable directive of the Board or the officer to whom Employee reports, and if such failure and refusal is curable, if such failure or refusal is not cured within fifteen (15) days after the Company’s written notice to Employee of such failure or refusal;

(4)

Employee’s (1) breach of Sections 6, 7 or 8 of this Agree-ment; (2) breach of any material written policy of the Company which if curable, is not cured within fifteen (15) days after the Company’s written notice of such breach; or (3) material breach of this Agreement, which if curable, is not cured within fifteen (15) days after the Company’s written notice of such breach; or

(5)

Employee’s conviction of, indictment for or entering of a guilty plea or plea of no contest or nolo contendere with respect to any felony or any crime involving an act of moral turpitude.

The Company may terminate this Agreement pursuant to a Termination for Cause at any time immediately upon notice to Employee.

(d) Death and Disability. Employee’s employment shall terminate immedi-ately upon Employee’s death and the Company may terminate this Agreement upon thirty (30) days’ prior written notice to Employee if, by virtue of a physical or mental condition, Employee is unable to perform the essential functions of his work under this Agreement, with or without reasonable accommodation, for a period of one hundred eighty (180) days in any three hundred and sixty-five (365) day period (“Disability”). Any question as to the existence of the Employee’s Disability as to which the Employee and the Company cannot agree shall be determined in writing by a qualified independent physician selected by the Company and reasonable acceptable to the Employee. If the Employee and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and the Employee shall be final and conclusive for all purposes of this Agreement.

(e) Obligations upon Termination.

(iii) In the event of a Termination without Cause, as described in Subsection 4(c)(ii), or Employee’s resignation for Good Reason pursuant to Section 4(b), all of the parties’ respective rights and obligations hereunder shall terminate upon the effective date of such termination pursuant to Subsection 4(c)(ii) or Subsection 4(b) as the case may be, except that (A) Employee’s obligations and the Company’s rights under Sections 5 through 12 of this Agreement shall survive such termination; (B) the Company shall pay Employee the Accrued Benefits; (C) the Company shall pay Employee, as severance, an amount equal to twelve (12) months of Employee’s then-current Base Salary payable in regular installments in accordance with the Company’s general payroll practices; and (D) the Company shall provide a payment in the amount equal to the premium for COBRA benefits under the Company’s group health plan for twelve (12) months, which the Employee may at Employee’s option, use to procure continuing benefits, payable in monthly installments on the first pay date for each month (the payments under Sections (C) and (D) are collectively referred to as the “Severance Payment”). The payment of the Severance Payment under this Subsection 4(e)(iii) shall be conditioned upon Employee’s effective execution of a full release of claims against the Company in a form reasonably satisfactory to the Company. The Company shall specify a period, not to exceed forty-five (45) days following termination, during which Employee may review and consider such release, provided that if such period spans two (2) calendar years, then the Severance Payment shall not be made until the second calendar year, regardless of the year in which the release is signed and returned.

(vi) Upon termination of Employee’s employment hereunder for any reason, Employee shall promptly resign from all other positions with the Company and its affiliates.

5. Acknowledgments.

(e) For purposes of Sections 5 through 9, the term “Company” includes both the Company and its direct and indirect subsidiaries.

6. Nondisclosure and Nonuse of Confidential Information; Nondisparagement.

(c) Employee agrees that he will not view or access any Personal Information except as needed in the course of his job duties and responsibilities for the Company or any of its subsidiaries.

8. Non-Competition and Non-Solicitation.

(b) Therefore, in consideration of the foregoing, Employee agrees that, for a period of twelve (12) months following termination of employment for any reason, he will not (i) engage in, sell or provide any products or services which are the same as or similar to or otherwise competitive with the products and services sold or provided by the Company; (ii) own, acquire, or control any interest, financial or otherwise, in any entity or business engaged in selling or providing the same, similar or otherwise competitive services or products which the Company is selling or providing in connection with the Business; (iii) call on or solicit which may interfere with or impair the relationship between the Company and any current or prospective customer, supplier, distributor, developer, service provider or other material business relation of the Company in connection with the Business; and (iv) act or provide services as a consultant or advisor or loan or otherwise provide financing or financial assistance of any kind, to any third party who is or is attempting, directly or indirectly, to engage in any of the activities listed in subsections (i) through (iii) above; provided that nothing in this Subsection (b) shall prohibit Employee from owning less than five percent (5%) of the outstanding shares of any public company as long as Employee has no other role with such company.

9. Enforcement.

If to Employee:

If to the Company:

Trinity Sub Inc.

1420 Fifth Ave, Suite 2000

Seattle, WA 98101

Facsimile: 206-623-2213

Email: TMCXnotices@trinityinvestments.com

Attention: President

with a copy to:

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, New York 10166

Attention: Glenn Pollner

E-mail: GPollner@gibsondunn.com

13. General Provisions.

(c) Successors and Assigns. Except as otherwise provided herein, this Agree-ment shall be binding upon and inure to the benefit of Employee and the Company and its respective successors, permitted assigns, personal representatives, heirs and estates, as the case may be; provided, however, that the rights and obligations of Employee under this Agreement shall not be assigned without the prior written consent of the Company and the Company may assign the rights and obligations of this Agreement to any affiliate of the Company or any successor or permitted assign of the Company’s business or assets, and such assignment by the Company will not constitute a termination under Section 4.

(e) Jurisdiction; Waiver of Jury Trial. EMPLOYEE HEREBY VOLUNTAR-ILY, UNCONDITIONALLY AND IRREVOCABLY AGREES AND SUBMITS TO THE JURISDICTION OF THE FEDERAL AND STATE COURTS OF THE STATE OF MARYLAND AND APPELLATE COURTS FROM ANY THEREOF FOR ANY CLAIM, ACTION OR DISPUTE ARISING OUT OF OR RELATED TO THIS AGREEMENT, AND WAIVES AND AGREES NOT TO ASSERT ANY DEFENSE THAT ANY SUCH COURT LACKS JURISDICTION, VENUE IS IMPROPER, OR THE FORUM IS INCONVENIENT. EMPLOYEE AND COMPANY HEREBY IRREVOCABLY AND KNOWINGLY WAIVE (TO THE FULLEST EXTENT PERMITTED BY LAW) ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING, WITHOUT LIMITATION, ANY COUNTERCLAIM) ARISING OUT OF THIS AGREEMENT OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO, INCLUDING, WITHOUT LIMITATION, ANY ACTION OR PROCEEDING: (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR (II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS AGREEMENT. COMPANY AND EMPLOYEE AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.

(h) Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

(i) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

(k) Survival of Representations, Warranties and Agreements. All representa-tions, warranties and agreements contained herein shall survive the termination of this Agreement. For the avoidance of doubt, Employee’s obligations under Sections 6 through 8 hereof shall survive termination of this Agreement for any reason (including, without limitation, upon nonrenewal of the agreement by either party).

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first written above.

	TRINITY SUB INC.

	By:	/s/ Sean A. Hehir
	Name:	Sean A. Hehir
	Title:	President, Chief Executive Officer, Treasurer & Chief Financial Officer

[Signature continues on the following page]

SIGNATURE PAGE TO EMPLOYMENT AGREEMENT

	David Schneider

	/s/ David Schneider

SIGNATURE PAGE TO EMPLOYMENT AGREEMENT

Exhibit 10.3

Execution Version

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”), dated as of August 9, 2019, is entered into by and between Trinity Sub, Inc., a Maryland corporation (the “Company”), and Joanne Van Sickle, an individual (“Employee”).

RECITALS

AGREEMENT

In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

2. Position and Duties.

(a) During the Employment Period, Employee shall serve as the Controller of the Company, and shall have the usual and customary duties, responsibilities and authority of a Controller. Employee acknowledges and agrees that she shall perform her duties and responsibilities faithfully and to the best of her abilities in a businesslike manner.

(b) Employee shall report to the Chief Executive Officer, shall work on a full-time basis for the Company and shall devote substantially all of her business time, attention, skills and energies to the business and affairs of the Company. During the Employment Period, Employee shall not engage in any business activity which, in the reasonable judgment of the Board of Directors of the Company (the “Board”), conflicts with the duties of Employee hereunder, whether or not such activity is pursued for gain, profit or other pecuniary advantage. Employee agrees that she shall promptly report any potential conflict in writing to the Board, affirmatively disclosing any outside business opportunity that presents even the appearance of a conflict.

3. Base Salary and Benefits.

(a) Base Salary. During the Employment Period, Employee’s base salary shall be $150,000.00 per annum (the “Base Salary”), which shall be payable in regular installments in accordance with the Company’s general payroll practices. This annual Base Salary shall be prorated for 2019 based upon the Effective Time through the end of the calendar year. Annual compensation review and increases, if any, will be subject to approval by the Board. However, the Base Salary may not be decreased during the Employment Period other than as part of an across-the-board salary reduction for senior executives of the Company.

(b) Bonus. At the conclusion of each fiscal year during the Employment Period, in addition to the Base Salary, Employee may be eligible to receive an annual bonus (the “Annual Bonus”) in an amount to be established by the Board. The amount of the Annual Bonus will be based on achievement of certain annual operating profit targets and other objectives established by the Board, and the target Annual Bonus, assuming that all performance goals are satisfied at the target level of performance, shall be one-hundred sixty-six and two-thirds percent (166 2/3%) of the Base Salary. The Annual Bonus shall be prorated for 2019 based upon the Effective Time through the end of the calendar year. Any Annual Bonus shall be paid promptly following the completion of the annual audit for the calendar year to which it relates, and in all events no later than March 15th of the calendar year following the calendar year to which it relates.

(c) Vacation. During the Employment Period, Employee shall be entitled to paid vacation in accordance with Company policy.

(d) Expenses. The Company shall reimburse Employee for all reasonable expenses incurred by her in the course of performing her duties under this Agreement which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses (“Business Expenses”), subject to the Company’s requirements with respect to reporting and documentation of such expenses.

4. Termination. The Employment Period shall terminate as follows.

(a) Termination by Employee without Good Reason. In the event that Employee terminates her employment for any reason other than for Good Reason, Employee must provide the Company with written notice of such resignation. Employee will use her best efforts to provide the Company with such written notice at least sixty (60) days in advance of the effective date of the termination. In the event that at least sixty (60) days’ advance written notice is not provided, Employee agrees to be available as a resource to the Company for the transition of her responsibilities for a number of days equal to sixty (60) minus the number of days’ written notice provided.

(b) Termination by Employee for Good Reason. Employee may terminate her employment hereunder for Good Reason. “Good Reason” means (i) a material and sustained diminution in Employee’s duties under this Agreement or a reduction of Employee’s title, (ii) a material breach by the Company of this Agreement, (iii) relocation of Employee’s principal place of employment to a location that is more than fifty (50) miles from Employee’s place of employment as of the Effective Time, without Employee’s consent, (D) a reduction in the Base Salary, unless such reduction is part of an across the board reduction for senior executives of the Company, or (E) a material reduction in the Employee’s target Annual Bonus; provided that any such action shall not constitute Good Reason unless (A) Employee provides written notice to the Company of any such action within thirty (30) days of the date on which such action first occurs and provides the Company with thirty (30) days to remedy such action (the “Cure Period”), (B) the Company fails to remedy such action within the Cure Period, and (C) Employee resigns within thirty (30) days of the expiration of the Cure Period.

(i) Termination by the Company for Cause. The Company may terminate Employee’s employment for Cause (“Termination for Cause”). “Cause” shall mean any of the following:

(1)

Any act of fraud, embezzlement, theft, intentional dishonesty, misrepresentation or breach of fiduciary duty with respect to the Company or its subsidiaries;

(2)

Employee’s gross negligence or willful misconduct in the performance of her duties to the Company;

(3)

(4)

(5)

Employee’s conviction of, indictment for or entering of a guilty plea or plea of no contest or nolo contendere with respect to any felony or any crime involving an act of moral turpitude.

The Company may terminate this Agreement pursuant to a Termination for Cause at any time immediately upon notice to Employee.

(d) Death and Disability. Employee’s employment shall terminate immediately upon Employee’s death and the Company may terminate this Agreement upon thirty (30) days’ prior written notice to Employee if, by virtue of a physical or mental condition, Employee is unable to perform the essential functions of her work under this Agreement, with or without reasonable accommodation, for a period of one hundred eighty (180) days in any three hundred and sixty-five (365) day period (“Disability”). Any question as to the existence of the Employee’s Disability as to which the Employee and the Company cannot agree shall be determined in writing by a qualified independent physician selected by the Company and reasonable acceptable to the Employee. If the Employee and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and the Employee shall be final and conclusive for all purposes of this Agreement.

(e) Obligations upon Termination.

(iv) In the event of Employee’s death or Disability, as described in Subsection 4(d), all of the parties’ respective rights and obligations hereunder shall immediately terminate upon the effective date of such termination pursuant to Subsection 4(d), except that (A) Employee’s obligations and the Company’s rights under Sections 5 through 12 of this Agreement shall survive such termination; (B) the Company shall pay to Employee the Accrued Benefits, and (C) the Company shall provide a payment in the amount equal to the premium for COBRA benefits under the Company’s group health plan for twelve (12) months, which the Employee or her estate, if applicable, may use to procure continuing benefits, payable in monthly installments on the first pay date for each month.

(vi) Upon termination of Employee’s employment hereunder for any reason, Employee shall promptly resign from all other positions with the Company and its affiliates.

5. Acknowledgments.

(a) Employee acknowledges and agrees that as a result and as part of Employee’s employment with the Company, she has received and will receive knowledge and expertise in the Business of the Company that is special and unique. As used in this Agreement, the term “Business” shall mean the business of (i) originating mortgages, lending money or other financing, in each case, for the purpose of acquiring, developing or otherwise financing real estate and related assets or the operation of a real estate investment fund or such other fund, real estate investment trust or other entity that participates in the foregoing described real estate-related activities within the United States, whether through origination activities or in the secondary market (including, without limitation, through the acquisition of real estate related loans or interests therein) or (ii) Fundraising for, on behalf of, or with respect to persons engaged in the activities referenced in clause (i).

(e) For purposes of Sections 5 through 9, the term “Company” includes both the Company and its direct and indirect subsidiaries.

6. Nondisclosure and Nonuse of Confidential Information; Nondisparagement.

(a) Employee acknowledges and agrees that she will be afforded access to Confidential Information which could have an adverse effect on the Company and its Business if it is used in an unauthorized manner and/or disclosed. Employee will not, at any time, either during the Employment Period or thereafter, disclose or use any Confidential Information, or permit any person to use, examine or make copies of any Confidential Information, except as may be required in her duties on behalf of the Company or any of its subsidiaries. Employee agrees to take reasonable measures to protect the secrecy of, and avoid the disclosure and the unauthorized use of, any Confidential Information.

(b) Employee shall deliver to the Company at the termination of the Employment Period, or at any time the Company may request, all memoranda, notes, plans, records, reports, files, electronic data, computer tapes, software and other documents and data (and copies thereof) that is Confidential Information or Personal Information or Work Product (each as defined herein) or other information relating to the Business of the Company which Employee may then possess or have under her control. Notwithstanding the foregoing, Employee will have the right to retain and remove all personal property and effects which are owned by Employee.

(c) Employee agrees that she will not view or access any Personal Information except as needed in the course of her job duties and responsibilities for the Company or any of its subsidiaries.

7. Inventions and Patents. Employee agrees that all inventions, innovations, improvements, technical information, certifications, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable) which relates to the Company’s (or any predecessor’s) Business, research and development or existing or future products or services and which are conceived, developed or made by Employee (whether or not during usual business hours and whether or not alone or in-conjunction with any other person) in the course of her employment with the Company or relationship with the Company or any predecessor, together with all patent applications, letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing (collectively referred to herein as “Work Product”) belong to the Company. Employee hereby assigns and agrees to assign to the Company any rights she may have or acquire in such Work Product, whether created before, on, after or prior to the Effective Time. Employee agrees that her copyrightable works prepared for the Company are “supplementary works” or “works for hire,” as defined in Title 17 of the United States Code, and if any such works are deemed not to be a supplementary work or work for hire, then Employee hereby assigns and agrees to assign her entire right, title and interest in the copyright to such works to the Company. Employee will take reasonable steps to promptly disclose such Work Product to the Company and perform all actions reasonably requested by the Company (whether during or after the Employment Period) to establish and confirm such ownership (including the execution and delivery of assignments, consents, powers of attorney and other instruments) and to provide reasonable assistance to the Company in connection with the prosecution of any applications for patents, trademarks, trade names, service marks or reissues thereof or in the prosecution or defense of interferences relating to any Work Product, to the extent the assistance of Employee is reasonably required to prosecute such applications or reissues thereof or to prosecute or defend such interferences.

8. Non-Competition and Non-Solicitation.

(a) Employee acknowledges that, in the course of her employment with the Company she will become familiar with the Company’s and its respective predecessors’ trade secrets and with other Confidential Information concerning the Company and its respective predecessors and that her services have been and will be of special, unique and extraordinary value to the Company. Employee agrees that, in consideration of her employment as contemplated under this Agreement and all compensation and benefits being provided herein, it is both reasonable and fair as well as necessary for the protection of the Company’s confidential information, good will in the marketplace, and other protectable business interests, that she be subject to certain limitations in her activities in the event of this Agreement’s termination by either party for any reason.

(b) Therefore, in consideration of the foregoing, Employee agrees that, for a period of twenty-four (24) months following termination of employment for any reason, she will not (i) engage in, sell or provide any products or services which are the same as or similar to or otherwise competitive with the products and services sold or provided by the Company; (ii) own, acquire, or control any interest, financial or otherwise, in any entity or business engaged in selling or providing the same, similar or otherwise competitive services or products which the Company is selling or providing in connection with the Business; (iii) call on or solicit which may interfere with or impair the relationship between the Company and any current or prospective customer, supplier, distributor, developer, service provider or other material business relation of the Company in connection with the Business; and (iv) act or provide services as a consultant or advisor or loan or otherwise provide financing or financial assistance of any kind, to any third party who is or is attempting, directly or indirectly, to engage in any of the activities listed in subsections (i) through (iii) above; provided that nothing in this Subsection (b) shall prohibit Employee from owning less than five percent (5%) of the outstanding shares of any public company as long as Employee has no other role with such company.

(c) In addition, in consideration of the foregoing, Employee agrees that, for a period of twelve (12) months following any termination of employment, Employee shall not, directly or indirectly, through another person or entity (i) induce, attempt to induce, or solicit any employee of the Company to terminate her employment with the Company, or in any way interfere with the relationship between the Company, on the one hand, and any employee thereof, on the other hand, (ii) employ, hire, induce, attempt to induce, or solicit the employment of any former employee of the Company until one (1) year after such employee’s employment relationship with the Company has been terminated, (iii) call on, solicit, service, divert or take away or attempt to call on, solicit, service, divert or take away any customer, supplier, contractor, designer, licensee or other business relation of the Company with respect to products or services related to the Company’s Business as of the date of this Agreement’s termination or induce any of such parties to cease doing business with the Company, or in any way interfere with the relationship between any such customer, supplier, contractor, designer, licensee or business relation, on the one hand, and the Company, on the other hand, or (iv) make any statement or do any act to impair, prejudice or destroy the goodwill of the Company, to prejudice or impair the relationship or dealing between the Company and any of its customers, suppliers, contractors, designers, licensees, employees or other business relations, or to cause existing or potential customers of the Company to make use of the services or purchase the services or products of any competitive business.

9. Enforcement.

If to the Company:

Broadmark Realty Capital Corp.

1420 Fifth Avenue, Suite 2000

Seattle, WA 98101

Facsimile: 206-623-2213

Attention: President

Email: TMCXnotices@trinityinvestments.com

with a copy to:

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, New York 10166

Attention: Glenn Pollner

E-mail: GPollner@gibsondunn.com

13. General Provisions.

(h) Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

(i) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first written above.

	TRINITY SUB INC.

	By:	/s/ Sean A. Hehir
	Name:	Sean A. Hehir
	Title:	President, Chief Executive Officer, Treasurer
		& Chief Financial Officer

[Signature continues on the following page]

SIGNATURE PAGE TO EMPLOYMENT AGREEMENT

	/s/ Joanne Van Sickle
	Joanne Van Sickle

SIGNATURE PAGE TO EMPLOYMENT AGREEMENT

Exhibit 10.4

Execution Version

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”), dated as of August 9, 2019, is entered into by and between Trinity Sub Inc., a Maryland corporation (the “Company”), and Adam Fountain, an individual (“Employee”).

RECITALS

AGREEMENT

In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

2. Position and Duties.

(a) During the Employment Period, Employee shall serve as the Executive Vice President of the Company, and shall have the usual and customary duties, responsibilities and authority of an Executive Vice President. Employee acknowledges and agrees that he shall perform his duties and responsibilities faithfully and to the best of his abilities in a businesslike manner.

(b) Employee shall report to the Chief Executive Officer, shall work on a full-time basis for the Company and shall devote substantially all of his business time, attention, skills and energies to the business and affairs of the Company. During the Employment Period, Employee shall not engage in any business activity which, in the reasonable judgment of the Board of Directors of the Company (the “Board”), conflicts with the duties of Employee hereunder, whether or not such activity is pursued for gain, profit or other pecuniary advantage. Employee agrees that he shall promptly report any potential conflict in writing to the Board, affirmatively disclosing any outside business opportunity that presents even the appearance of a conflict. Notwithstanding the foregoing, during the Employment Period the Employee may be engaged as an independent contractor of Broadmark Capital LLC for regulatory purposes, but in no event shall Employee provide any services to Broadmark Capital LLC or any of its affiliates that are material, restrict the performance of Employee’s duties to the Company, or compete with the Business.

3. Base Salary and Benefits.

(b) Bonus. At the conclusion of each fiscal year during the Employment Period, in addition to the Base Salary, Employee may be eligible to receive an annual bonus (the “Annual Bonus”) in an amount to be established by the Board. The amount of the Annual Bonus will be based on achievement of certain annual operating profit targets and other objectives established by the Board, and the target Annual Bonus, assuming that all performance goals are satisfied at the target level of performance, shall be sixty-two and a half percent (62.5%) of the Base Salary. The Annual Bonus shall be prorated for 2019 based upon the Effective Time through the end of the calendar year. Any Annual Bonus shall be paid promptly following the completion of the annual audit for the calendar year to which it relates, and in all events no later than March 15th of the calendar year following the calendar year to which it relates.

(c) Vacation. During the Employment Period, Employee shall be entitled to paid vacation in accordance with Company policy.

4. Termination. The Employment Period shall terminate as follows.

(i) Termination by the Company for Cause. The Company may terminate Employee’s employment for Cause (“Termination for Cause”). “Cause” shall mean any of the following:

(1)

Any act of fraud, embezzlement, theft, intentional dishonesty, misrepresentation or breach of fiduciary duty with respect to the Company or its subsidiaries;

(2)

Employee’s gross negligence or willful misconduct in the performance of his duties to the Company;

(3)

(4)

(5)

Employee’s conviction of, indictment for or entering of a guilty plea or plea of no contest or nolo contendere with respect to any felony or any crime involving an act of moral turpitude.

The Company may terminate this Agreement pursuant to a Termination for Cause at any time immediately upon notice to Employee.

(e) Obligations upon Termination.

(vi) Upon termination of Employee’s employment hereunder for any reason, Employee shall promptly resign from all other positions with the Company and its affiliates.

5. Acknowledgments.

(e) For purposes of Sections 5 through 9, the term “Company” includes both the Company and its direct and indirect subsidiaries.

6. Nondisclosure and Nonuse of Confidential Information; Nondisparagement.

(c) Employee agrees that he will not view or access any Personal Information except as needed in the course of his job duties and responsibilities for the Company or any of its subsidiaries.

8. Non-Competition and Non-Solicitation.

9. Enforcement.

If to Employee:

Adam Fountain

602 12th Avenue N
Edmonds, Washington 98020
Email: Adam.Fountain@gmail.com

If to the Company:

Broadmark Realty Capital Corp.

1420 Fifth Avenue, Suite 2000

Seattle, WA 98101

Facsimile: 206-623-2213

Attention: President

Email: TMCXnotices@trinityinvestments.com

with a copy to:

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, New York 10166

Attention: Glenn Pollner

E-mail: GPollner@gibsondunn.com

13. General Provisions.

(h) Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

(i) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first written above.

	TRINITY SUB INC.

	By:	/s/ Sean A. Hehir
	Name:	Sean A. Hehir
	Title:	President, Chief Executive Officer, Treasurer
		& Chief Financial Officer

[Signature continues on the following page]

SIGNATURE PAGE TO EMPLOYMENT AGREEMENT

	/s/ Adam Fountain
	Adam Fountain

SIGNATURE PAGE TO EMPLOYMENT AGREEMENT

☐

We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act).

Exhibit 10.6

FORM OF EXECUTION VERSION

FIRST AMENDMENT TO THE SUBSCRIPTION AGREEMENT

[___________], 2019

THIS FIRST AMENDMENT TO THE SUBSCRIPTION AGREEMENT (this “Agreement”), made as of [___________], 2019, is by and among Trinity Sub Inc., a Maryland corporation (the “Company”), and [___________], a [___________] (the “Subscriber”).

The Subscription Agreement, dated as of August 9, 2019 (the “Subscription Agreement”), shall be amended as set forth below. All capitalized terms used but not defined herein shall have the meanings set forth in the Subscription Agreement.

WHEREAS, pursuant to the Subscription Agreement, the Company has, among other things, agreed to issue to the Subscriber concurrently with the Closing a number of warrants equal to the number of Initial Shares, on the terms and subject to the conditions contained therein;

WHEREAS, as a condition to the closing of the Transaction, holders of at least 65% of those certain 34,500,000 outstanding public warrants of the SPAC (the “Public Warrants”), issued pursuant to that certain Warrant Agreement (as defined in the Merger Agreement), must approve and consent to the Warrant Amendment Proposal (as defined in the Merger Agreement), whereby the Warrant Agreement will be amended to remove the anti-dilution provisions contained in Section 4.1.2 of the Warrant Agreement relating to the payment of cash dividends, as set forth in Exhibit A;

WHEREAS, to induce holders of the Public Warrants to approve and consent to the Warrant Amendment Proposal, the SPAC intends to seek to also amend the Warrant Agreement to provide for a cash payment of $1.60, payable in respect of each Public Warrant (the “Warrant Cash Payment”), and to reduce the number of shares of Common Stock for which each Public Warrant will be exercisable, in each case contingent upon the consummation of the Transaction; and

WHEREAS, the parties desire to amend the terms of the Subscription Agreement to clarify (i) the exercise mechanics of the warrants to be issued to the Subscriber by the Company and (ii) that the Warrant Cash Payment will be paid to Subscriber in respect of the warrants to be issued to the Subscriber by the Company.

1. Amendment of Subscription Agreement. The Company and the Subscriber hereby amend the Subscription Agreement as provided in this Section 1, effective as of the date first set forth above.

1.1 Section 3.c.iii of the Subscription Agreement is hereby deleted and replaced in its entirety with the following:

“iii. the Company shall have issued to the undersigned, concurrently with the Closing, a number of warrants equal to the number of the Initial Shares subscribed by the undersigned (and not including any number of Optional Shares for which the undersigned has the right to subscribe) (the “Warrants”), with each Warrant entitling the holder thereof to purchase the number of shares of Common Stock at the same exercise price as provided in, and otherwise on substantially the same terms as, those certain 34,500,000 outstanding public warrants (“Public Warrants”) issued by the SPAC pursuant to that certain Warrant Agreement (as defined in the Merger Agreement), as amended and in effect as of the consummation of the Transaction (other than such differences as may be attributable to the fact that the Warrants are being issued by the Company to the undersigned in one or more transactions exempt from registration under the Securities Act of 1933, as amended);”

FORM OF EXECUTION VERSION

1.2 Section 3.c.vi of the Subscription Agreement is hereby deleted and replaced in its entirety with the following:

“vi. the undersigned shall have received payment from the Company of a fee (the “Warrant Equalization Fee”), payable in cash concurrently with the Closing, in an amount equal to (A) the number of the Warrants acquired by the undersigned pursuant to this Agreement multiplied by (B) the amount of the cash distribution payable per each Public Warrant pursuant to Section 7.4.3 of the Warrant Agreement, as amended and in effect as of the consummation of the Transaction (provided, however, that the Warrant Equalization Fee shall in no event be less than $0.30 per Warrant acquired by the undersigned pursuant to this Agreement);”

2. Miscellaneous Provisions.

2.1 Effectiveness of Subscription Agreement. All provisions of the Subscription Agreement, except as expressly amended and modified by this Agreement, shall remain in full force and effect.

2.2 Applicable Law; Submission to Jurisdiction; Waiver of Jury Trial.

2.2.1. THIS AGREEMENT AND ANY CLAIMS OR CAUSES OF ACTION HEREUNDER BASED UPON, ARISING OUT OF OR RELATED TO THIS AGREEMENT (WHETHER BASED ON LAW, IN EQUITY, IN CONTRACT, IN TORT OR ANY OTHER THEORY) OR THE NEGOTIATION, EXECUTION, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER STATE.

2.2.2. EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, THE SUPREME COURT OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF NEW YORK SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND THE DOCUMENTS REFERRED TO IN THIS AGREEMENT AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY, AND HEREBY WAIVES, AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR INTERPRETATION OR ENFORCEMENT HEREOF OR ANY SUCH DOCUMENT THAT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION, SUIT OR PROCEEDING SHALL BE HEARD AND DETERMINED BY SUCH A NEW YORK STATE OR FEDERAL COURT. THE PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH SUCH ACTION, SUIT OR PROCEEDING TO THE ADDRESS AT THE SIGNATURE PAGE HEREIN OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.

2.2.3. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THE FOREGOING WAIVER; (III) SUCH PARTY MAKES THE FOREGOING WAIVER VOLUNTARILY AND (IV) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 2.2.

FORM OF EXECUTION VERSION

2.3 Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

2.4 Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.

2.5 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.

2.6 Entire Agreement. The Subscription Agreement, as modified by this Agreement, constitutes the entire understanding of the parties and supersedes all prior agreements, understandings, arrangements, promises and commitments, whether written or oral, express or implied, relating to the subject matter hereof.

[Signature page follows]

FORM OF EXECUTION VERSION

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

	TRINITY SUB INC.

	By:
		Name:
		Title:

[Signature Page to Amendment of Subscription Agreement]

FORM OF EXECUTION VERSION

	[___________]

	By:
		Name:
		Title:

[Signature Page to Amendment of Subscription Agreement]

Exhibit A

Warrant Amendment Proposal

The substantive text of the proposed Warrant Amendment is as follows:

3.1 Warrant Price. Each Warrant shall, when countersigned by the Warrant Agent, entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of shares of Common Stock ~~stated therein, at the price of $11.50 per share,~~, at such price equal to the Exercise Price described in Exhibit A for such Public Warrants and Private Warrants, as applicable (each subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1. 3.1); provided, however, that a Public Warrant may not be exercised for a fractional share, so that only a multiple of four Public Warrants may be exercised at a given time. The term “Warrant Price” as used in this Agreement shall mean the ~~price per share~~Exercise Price (as specified in Exhibit A hereto) at which shares of Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of not less than twenty (20) Business Days, provided, that the Company shall provide at least twenty (20) days prior written notice of such reduction to Registered Holders of the Warrants and, provided further that any such reduction shall be identical among all of the Warrants.

****

4.1.2 Extraordinary Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a distribution in cash, securities or other assets to the holders of the Common Stock on account of such shares of Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible), other than (a) as described in subsection 4.1.1 above, (b) ~~Ordinary Cash Dividends (as defined below), (c~~regular monthly, quarterly or other periodic cash dividends or cash distributions, (c) any other cash dividend or distribution required to be paid in order for the Company to qualify or maintain its status as a real estate investment trust within the meaning of the Internal Revenue Code of 1986, as amended, or otherwise avoid the imposition of U.S. federal and state income and excise taxes, so long as the Company qualifies or is seeking to maintain its status as a real estate investment trust at the time of such cash dividend or distribution, (d) to satisfy the redemption rights of the holders of the Common Stock in connection with a proposed initial Business Combination, (de) as a result of the repurchase of shares of Common Stock by the Company if a proposed Business Combination is presented to the stockholders of the Company for approval, (ef) to satisfy the redemption rights of the holders of Common Stock in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of the public shares of Common Stock if the Company does not complete the Business Combination within the period set forth in the Company’s amended and restated certificate of incorporation or (fg) in connection with the redemption of public shares of Common Stock upon the failure of the Company to complete its initial Business Combination and any subsequent distribution of its assets upon its liquidation (any such non-excluded event being referred to herein as an “Extraordinary Dividend”), then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and/or the fair market value (as determined by the Board, in good faith) of any securities or other assets paid on each share of Common Stock in respect of such Extraordinary Dividend. ~~For purposes of this~~ ~~subsection 4.1.2, “Ordinary~~ ~~Cash~~ ~~Dividends~~” means any cash dividend or cash distribution which, when combined on a per share basis, with the per share amounts of all other cash dividends and cash distributions paid on the Common Stock during the 365-day period ending on the date of declaration of such dividend or distribution (as adjusted to appropriately reflect any of the events referred to in other subsections of this ~~Section 4~~ and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number of shares of Common Stock issuable on exercise of each Warrant) does not exceed $0.50 (being 5% of the offering price of the Units in the Offering).

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7.4.3 Mandatory Cash Distribution. Notwithstanding anything contained in this Agreement to the contrary, at the Effective Time (as defined in the Merger Agreement), each Public Warrant issued and outstanding immediately prior to the Effective Time shall, automatically and without any action by the Registered Holder thereof, be entitled to receive a cash distribution payable by or at the direction of the Company as soon as reasonably practicable following the Effective Time, upon receipt of any documents as may reasonably be required by the Warrant Agent, in the amount of $1.60.

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Warrant Certificate

This Warrant Certificate certifies that , or registered assigns, is the registered holder of warrant(s) evidenced hereby (the “Warrants” and each, a “Warrant”) to purchase shares of Class A common stock, $0.0001 par value per share (“Common Stock”), of Trinity Merger Corp., a Delaware corporation (the “Company”). Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and non-assessable shares of Common Stock as set forth below, at the exercise price (the “Exercise Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless exercise” as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.

Each Public Warrant is ~~initially~~ exercisable for one-quarter of one fully paid and non-assessable share of Common Stock. The Exercise Price per share of Common Stock for any Public Warrant is equal to $2.875 per one-quarter share ($11.50 per whole share); provided however, that a Public Warrant may not be exercised for a fractional share, so that only a multiple of four Public Warrants may be exercised at a given time.

Each Private Warrant is exercisable for one fully paid and non-assessable share of Common Stock. The Exercise Price per share of Common Stock for any Private Warrant is equal to $11.50 per share.

No fractional shares will be issued upon exercise of any Warrant. If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in a share of Common Stock, the Company will, upon exercise, round down to the nearest whole number ~~the number of shares of Common Stock to be issued to the Warrant holder~~. The number of shares of Common Stock issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.

~~The initial~~ ~~Exercise Price per share of Common Stock for any~~ ~~Warrant is equal to $11.50 per share. The Exercise Price is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.~~

Subject to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such Exercise Period, such Warrants shall become void.

Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully set forth at this place.

This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.

Exhibit 10.7

Approved by the stockholders of Trinity Merger Corp. on November 12, 2019

BROADMARK REALTY CAPITAL INC.

2019 STOCK INCENTIVE PLAN

1. Purpose

The purpose of this Broadmark Realty Capital Inc. 2019 Stock Incentive Plan (the “Plan”) is to promote and closely align the interests of employees, officers, non-employee directors and other service providers of Broadmark Realty Capital Inc. (the “Company”) and its stockholders by providing stock-based compensation. The objectives of the Plan are to attract and retain the best available employees for positions of substantial responsibility and to motivate Participants to optimize the profitability and growth of the Company through incentives that are consistent with the Company’s goals and that link the personal interests of Participants to those of the Company’s stockholders.

The Plan provides for the grant of Options, Stock Appreciation Rights, Restricted Stock Units and Restricted Stock, any of which may be performance-based, as determined by the Committee.

2. Definitions

As used in the Plan, the following terms shall have the meanings set forth below:

(a) “Affiliate” means any entity in which the Company has a substantial direct or indirect equity interest, as determined by the Committee from time to time.

(b) “Act” means the Securities Exchange Act of 1934, as amended, or any successor thereto.

(c) “Award” means an Option, Stock Appreciation Right, Restricted Stock Unit, or Restricted Stock award granted to a Participant pursuant to the provisions of the Plan, any of which may be subject to performance conditions.

(d) “Award Agreement” means a written agreement or other instrument as may be approved from time to time by the Committee and designated as such implementing the grant of each Award. An Award Agreement may be in the form of an agreement to be executed by both the Participant and the Company (or an authorized representative of the Company) or certificates, notices or similar instruments as approved by the Committee and designated as such.

(e) “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Act.

(f) “Board” means the board of directors of the Company.

(g) “Cause” has the meaning set forth in an Award Agreement or other written employment or services agreement between the Participant and the Company or an Affiliate thereof, or if no such meaning applies, means a Participant’s Termination of Employment by the Company or an Affiliate by reason of the Participant’s (i) material breach of his or her obligations under any agreement, including any employment agreement, that he has entered into with the Company or an Affiliate; (ii) intentional misconduct as an officer, employee, director, consultant or advisor of the Company or a material violation by the Participant of written policies of the Company; (iii) material breach of any fiduciary duty which the Participant owes to the Company; (iv) commission by the Participant of (A) a felony or (B) fraud, embezzlement, dishonesty, or a crime involving moral turpitude; or (v) the habitual use of illicit drugs or other illicit substances. A Participant’s employment or service will be deemed to have been terminated for Cause if it is determined subsequent to his or her termination of employment or service that grounds for termination of his or her employment or service for Cause existed at the time of his or her termination of employment or service.

(h) “Change in Control” means the occurrence of any one of the following:

(i) any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person or any securities acquired directly from the Company or its Affiliates) representing 50% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described paragraph (iii) below; or

(ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the Effective Date (as defined below), constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least a majority of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or

(iii) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than a merger or consolidation which would result in the holders of the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation; or

(iv) the implementation of a plan of complete liquidation or dissolution of the Company; or

(v) there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which is owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

(i) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations issued thereunder.

(j) “Committee” means the Compensation Committee of the Board (or any successor committee), or such other committee as designated by the Board to administer the Plan under Section 6.

(k) “Common Stock” means the common stock of the Company, par value $0.001 per share, or such other class or kind of shares or other securities as may be applicable under Section 13.

(l) “Company” means Broadmark Realty Capital Inc., a Delaware corporation, and except as utilized in the definition of Change in Control, any successor corporation.

(m) “Disability” means, as determined by the Committee in its discretion exercised in good faith, a physical or mental condition of a Participant that would entitle him or her to payment of disability income payments under the Company’s long-term disability insurance policy or plan for employees as then in effect; or in the event that a Participant is not covered, for whatever reason under the Company’s long-term disability insurance policy or plan for employees or in the event the Company does not maintain such a long-term disability insurance policy, “Disability” means a permanent and total disability as defined in section 22(e)(3) of the Code. A determination of Disability may be made by a physician selected or approved by the Committee and, in this respect, Participants shall submit to an examination by such physician upon request by the Committee.

(n) “Dividend Equivalents” mean an amount payable in cash or Common Stock, as determined by the Committee, with respect to a Restricted Stock Unit equal to the dividends that would have been paid to the Participant if the shares underlying the Award had been owned by the Participant.

(o) “Effective Date” means the date on which the Plan takes effect, as defined pursuant to Section 4 of the Plan.

(p) “Eligible Person” means any current or prospective employee, officer, non-employee director or other service provider of the Company or any of its Subsidiaries; provided, however that Incentive Stock Options may only be granted to employees of the Company, a parent or a subsidiary corporation within the meaning of Section 424 of the Code.

(q) “Fair Market Value” means as of any date, the value of the Common Stock determined as follows: (i) if the Common Stock is listed on any established stock exchange, system or market, its Fair Market Value shall be the closing price for the Common Stock as quoted on such exchange, system or market as reported in the Wall Street Journal or such other source as the Committee deems reliable (or, if no sale of Common Stock is reported for such date, on the next preceding date on which any sale shall have been reported); and (ii) in the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Committee by the reasonable application of a reasonable valuation method, taking into account factors consistent with Treas. Reg. § 409A-1(b)(5)(iv)(B) as the Committee deems appropriate.

(r) “Incentive Stock Option” means a stock option that is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.

(s) “Nonqualified Stock Option” means a stock option that is not intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.

(t) “Option” means a right to purchase a number of shares of Common Stock at such exercise price, at such times and on such other terms and conditions as are specified in or determined pursuant to an Award Agreement. Options granted pursuant to the Plan may be Incentive Stock Options or Nonqualified Stock Options.

(u) “Participant” means any Eligible Person to whom Awards have been granted from time to time by the Committee and any authorized transferee of such individual.

(v) “Person” shall have the meaning given in Section 3(a)(9) of the Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its Affiliates, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(w) “Plan” means the Broadmark Realty Capital Inc. 2019 Stock Incentive Plan as set forth herein and as amended from time to time.

(x) “Restricted Stock” means an Award or issuance of Common Stock the grant, issuance, vesting and/or transferability of which is subject during specified periods of time to any such conditions (including continued employment or engagement or performance conditions) and terms as the Committee deems appropriate.

(y) “Restricted Stock Unit” means an Award denominated in units of Common Stock under which the issuance of shares of Common Stock (or cash payment in lieu thereof) is subject to such conditions (including continued employment or engagement or performance conditions) and terms as the Committee deems appropriate.

(z) “Separation from Service” or “Separates from Service” means the termination of Participant’s employment with the Company and all Subsidiaries that constitutes a “separation from service” within the meaning of Section 409A of the Code.

(aa) “Stock Appreciation Right” or “SAR” means a right granted that entitles the Participant to receive, in cash or Common Stock or a combination thereof, as determined by the Committee, value equal to the excess of (i) the Fair Market Value of a specified number of shares of Common Stock at the time of exercise over (ii) the exercise price of the right, as established by the Committee on the date of grant.

(bb) “Subsidiary” means any business association (including a corporation or a partnership, other than the Company) in an unbroken chain of such associations beginning with the Company if each of the associations other than the last association in the unbroken chain owns equity interests (including stock or partnership interests) possessing 50% or more of the total combined voting power of all classes of equity interests in one of the other associations in such chain.

(cc) “Substitute Awards” means Awards granted or Common Stock issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.

(dd) “Termination of Employment” means ceasing to serve as an employee of the Company and its Subsidiaries or, with respect to a non-employee director or other service provider, ceasing to serve as such for the Company and its Subsidiaries, except that with respect to all or any Awards held by a Participant (i) the Committee may determine that a leave of absence or employment on a less than full-time basis is considered a “Termination of Employment,” (ii) the Committee may determine that a transition of employment to service with a partnership, joint venture or corporation not meeting the requirements of a Subsidiary in which the Company or a Subsidiary is a party is not considered a “Termination of Employment,” (iii) service as a member of the Board shall constitute continued employment with respect to Awards granted to a Participant while he or she served as an employee, and (iv) service as an employee of the Company or a Subsidiary shall constitute continued employment with respect to Awards granted to a Participant while he or she served as a member of the Board or other service provider. The Committee shall determine whether any corporate transaction, such as a sale or spin-off of a division or subsidiary that employs or engages a Participant, shall be deemed to result in a Termination of Employment with the Company and its Subsidiaries for purposes of any affected Participant’s Awards, and the Committee’s decision shall be final and binding.

3. Eligibility

Any Eligible Person is eligible for selection by the Committee to receive an Award.

4. Effective Date and Termination of Plan

The Plan shall become effective upon its approval by the stockholders of the Company (the “Effective Date”). The Plan shall remain available for the grant of Awards until the tenth anniversary of the Effective Date and shall automatically terminate on that date. Notwithstanding the foregoing, the Plan may be terminated at such earlier time as the Board may determine. Termination of the Plan will not affect the rights and obligations of the Participants and the Company arising under Awards granted prior to such termination.

5. Shares Subject to the Plan and to Awards

(a) Aggregate Limits. The aggregate number of shares of Common Stock issuable under the Plan shall be equal to 5,000,000. The aggregate number of shares of Common Stock available for grant under this Plan and the number of shares of Common Stock subject to Awards outstanding at the time of any event described in Section 13 shall be subject to adjustment as provided in Section 13. The shares of Common Stock issued pursuant to Awards granted under this Plan may be shares that are authorized and unissued or shares that were reacquired by the Company, including shares purchased in the open market.

(b) Issuance of Shares. For purposes of Section 5(a), the aggregate number of shares of Common Stock issued under this Plan at any time shall equal only the number of shares of Common Stock actually issued upon exercise or settlement of an Award. The aggregate number of shares available for issuance under this Plan at any time shall not be reduced by (i) shares subject to Awards that have been terminated, expired unexercised, forfeited or settled in cash, (ii) shares subject to Awards that have been retained or withheld by the Company in payment or satisfaction of the exercise price, purchase price or tax withholding obligation of an Award, or (iii) shares subject to Awards that otherwise do not result in the issuance of shares in connection with payment or settlement thereof. In addition, shares that have been delivered (either actually or by attestation) to the Company in payment or satisfaction of the exercise price, purchase price or tax withholding obligation of an Award shall be available for issuance under this Plan.

(c) Substitute Awards. Substitute Awards shall not reduce the shares of Common Stock authorized for issuance under the Plan. Additionally, in the event that a company acquired by the Company or any Subsidiary, or with which the Company or any Subsidiary combines, has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the shares of Common Stock authorized for issuance under the Plan; provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were employees of such acquired or combined company before such acquisition or combination.

(d) Tax Code Limits. The aggregate number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options granted under this Plan shall be equal to two million (2,000,000), which number shall be calculated and adjusted pursuant to Section 13 only to the extent that such calculation or adjustment will not affect the status of any option intended to qualify as an Incentive Stock Option under Section 422 of the Code.

(e) Limits on Awards to Non-Employee Directors. The aggregate dollar value of equity-based (based on the grant date Fair Market Value of equity-based Awards) and cash compensation granted under this Plan or otherwise during any calendar year to any non-employee director shall not exceed $1,000,000; provided, however, that in the calendar year in which a non-employee director first joins the Board or is first designated as chairman of the Board or lead director, the maximum aggregate dollar value of equity-based and cash compensation granted to the non-employee director may be up to two hundred percent (200%) of the foregoing limit.

6. Administration of the Plan

(a) Administrator of the Plan. The Plan shall be administered by the Committee. The Board shall fill vacancies on, and from time to time may remove or add members to, the Committee. The Committee shall act pursuant to a majority vote or unanimous written consent. Any power of the Committee may also be exercised by the Board, except to the extent that the grant or exercise of such authority would cause any Award or transaction to become subject to (or lose an exemption under) the short-swing profit recovery provisions of Section 16 of the Act. To the extent that any permitted action taken by the Board conflicts with action taken by the Committee, the Board action shall control. To the maximum extent permissible under applicable law, the Committee (or any successor) may by resolution delegate any or all of its authority to one or more subcommittees composed of one or more directors and/or officers of the Company, and any such subcommittee shall be treated as the Committee for all purposes under this Plan. Notwithstanding the foregoing, if the Board or the Committee (or any successor) delegates to a subcommittee comprised of one or more officers of the Company (who are not also directors) the authority to grant Awards, the resolution so authorizing such subcommittee shall specify the total number of shares of Common Stock such subcommittee may award pursuant to such delegated authority, and no such subcommittee shall designate any officer serving thereon or any executive officer or non-employee director of the Company as a recipient of any Awards granted under such delegated authority. The Committee hereby delegates to and designates the senior human resources officer of the Company (or such other officer with similar authority), and to his or her delegates or designees, the authority to assist the Committee in the day-to-day administration of the Plan and of Awards granted under the Plan, including without limitation those powers set forth in Section 6(b)(iv) through (ix) and to execute agreements evidencing Awards made under this Plan or other documents entered into under this Plan on behalf of the Committee or the Company. The Committee may further designate and delegate to one or more additional officers or employees of the Company or any subsidiary, and/or one or more agents, authority to assist the Committee in any or all aspects of the day-to-day administration of the Plan and/or of Awards granted under the Plan.

(b) Powers of Committee. Subject to the express provisions of this Plan, the Committee shall be authorized and empowered to do all things that it determines to be necessary or appropriate in connection with the administration of this Plan, including, without limitation:

(i) to prescribe, amend and rescind rules and regulations relating to this Plan and to define terms not otherwise defined herein;

(ii) to determine which persons are Eligible Persons, to which of such Eligible Persons, if any, Awards shall be granted hereunder and the timing of any such Awards;

(iii) to prescribe and amend the terms of the Award Agreements, to grant Awards and determine the terms and conditions thereof;

(iv) to establish and verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, retention, vesting, exercisability or settlement of any Award;

(v) to prescribe and amend the terms of or form of any document or notice required to be delivered to the Company by Participants under this Plan;

(vi) to determine the extent to which adjustments are required pursuant to Section 13;

(vii) to interpret and construe this Plan, any rules and regulations under this Plan and the terms and conditions of any Award granted hereunder, and to make exceptions to any such provisions if the Committee, in good faith, determines that it is appropriate to do so;

(viii) to approve corrections in the documentation or administration of any Award; and

(ix) to make all other determinations deemed necessary or advisable for the administration of this Plan.

Notwithstanding anything in this Plan to the contrary, with respect to any Award that is “deferred compensation” under Section 409A of the Code, the Committee shall exercise its discretion in a manner that causes such Awards to be compliant with or exempt from the requirements of such Code section. Without limiting the foregoing, unless expressly agreed to in writing by the Participant holding such Award, the Committee shall not take any action with respect to any Award which constitutes (i) a modification of a stock right within the meaning of Treas. Reg. § 1.409A-1(b)(5)(v)(B) so as to constitute the grant of a new stock right, (ii) an extension of a stock right, including the addition of a feature for the deferral of compensation within the meaning of Treas. Reg. § 1.409A-1 (b)(5)(v)(C), or (iii) an impermissible acceleration of a payment date or a subsequent deferral of a stock right subject to Section 409A of the Code within the meaning of Treas. Reg. § 1.409A-1(b)(5)(v)(E).

The Committee may, in its sole and absolute discretion, without amendment to the Plan but subject to the limitations otherwise set forth in Section 18, waive or amend the operation of Plan provisions respecting exercise after Termination of Employment. The Committee or any member thereof may, in its sole and absolute discretion and, except as otherwise provided in Section 18, waive, settle or adjust any of the terms of any Award so as to avoid unanticipated consequences or address unanticipated events (including any temporary closure of an applicable stock exchange, disruption of communications or natural catastrophe).

(c) Determinations by the Committee. All decisions, determinations and interpretations by the Committee regarding the Plan, any rules and regulations under the Plan and the terms and conditions of or operation of any Award granted hereunder, shall be final and binding on all Participants, beneficiaries, heirs, assigns or other persons holding or claiming rights under the Plan or any Award. The Committee shall consider such factors as it deems relevant, in its sole and absolute discretion, to making such decisions, determinations and interpretations including, without limitation, the recommendations or advice of any officer or other employee of the Company and such attorneys, consultants and accountants as it may select. Members of the Board and members of the Committee acting under the Plan shall be fully protected in relying in good faith upon the advice of counsel and shall incur no liability except for gross negligence or willful misconduct in the performance of their duties.

(d) Subsidiary Awards. In the case of a grant of an Award to any Participant employed by a Subsidiary, such grant may, if the Committee so directs, be implemented by the Company issuing any subject shares of Common Stock to the Subsidiary, for such lawful consideration as the Committee may determine, upon the condition or understanding that the Subsidiary will transfer the shares of Common Stock to the Participant in accordance with the terms of the Award specified by the Committee pursuant to the provisions of the Plan. Notwithstanding any other provision hereof, such Award may be issued by and in the name of the Subsidiary and shall be deemed granted on such date as the Committee shall determine.

7. Plan Awards

(a) Terms Set Forth in Award Agreement. Awards may be granted to Eligible Persons as determined by the Committee at any time and from time to time prior to the termination of the Plan. The terms and conditions of each Award shall be set forth in an Award Agreement in a form approved by the Committee for such Award, which Award Agreement may contain such terms and conditions as specified from time to time by the Committee, provided such terms and conditions do not conflict with the Plan. The Award Agreement for any Award (other than Restricted Stock awards) shall include the time or times at or within which and the consideration, if any, for which any shares of Common Stock may be acquired from the Company. The terms of Awards may vary among Participants, and the Plan does not impose upon the Committee any requirement to make Awards subject to uniform terms. Accordingly, the terms of individual Award Agreements may vary.

(b) Performance Criteria. The Committee may establish performance criteria and level of achievement that determine the number of shares of Common Stock, Restricted Stock Units, or cash to be granted, retained, vested, issued or issuable under or in settlement of or the amount payable pursuant to an Award. Such performance-based awards may be identified as “Performance Share,” “Performance Equity,” “Performance Unit” or other such term as chosen by the Committee.

(c) Termination of Employment. Subject to the express provisions of the Plan, the Committee shall specify before, at, or after the time of grant of an Award the provisions governing the effect(s) upon an Award of a Participant’s Termination of Employment.

(d) Rights of a Stockholder. A Participant shall have no rights as a stockholder with respect to shares of Common Stock covered by an Award (including voting rights) until the date the Participant becomes the holder of record of such shares of Common Stock. No adjustment shall be made for dividends or other rights for which the record date is prior to such date, except as provided in Section 10(b) or Section 13 of this Plan or as otherwise provided by the Committee.

8. Options

(a) Grant, Term and Price. The grant, issuance, retention, vesting and/or settlement of any Option shall occur at such time and be subject to such terms and conditions as determined by the Committee or under criteria established by the Committee, which may include conditions based on continued employment or engagement, passage of time, attainment of age and/or service requirements, and/or satisfaction of performance conditions. The term of an Option shall in no event be greater than ten years; provided, however, the term of an Option (other than an Incentive Stock Option) shall be automatically extended if, at the time of its scheduled expiration, the Participant holding such Option is prohibited by law or the Company’s insider trading policy from exercising the Option, which extension shall expire on the thirtieth (30th) day following the date such prohibition no longer applies. The Committee will establish the price at which Common Stock may be purchased upon exercise of an Option, which, in no event will be less than the Fair Market Value of such shares on the date of grant; provided, however, that the exercise price per share of Common Stock with respect to an Option that is granted as a Substitute Award may be less than the Fair Market Value of the shares of Common Stock on the date such Option is granted if such exercise price is based on a formula set forth in the terms of the options held by such optionees or in the terms of the agreement providing for such merger or other acquisition that satisfies the requirements of (i) Section 409A of the Code, if such options held by such optionees are not intended to qualify as “incentive stock options” within the meaning of Section 422 of the Code, and (ii) Section 424(a) of the Code, if such options held by such optionees are intended to qualify as “incentive stock options” within the meaning of Section 422 of the Code. The exercise price of any Option may be paid in cash or such other method as determined by the Committee, including an irrevocable commitment by a broker to pay over such amount from a sale of the shares of Common Stock issuable under an Option, the delivery of previously owned shares of Common Stock or withholding of shares of Common Stock deliverable upon exercise. Unless otherwise specifically provided in the Option, the exercise price of Common Stock acquired pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the Company that have been held for more than six months.

(b) No Repricing without Stockholder Approval. Other than in connection with a change in the Company’s capitalization (as described in Section 13), the Committee shall not, without stockholder approval, reduce the exercise price of a previously awarded Option and, at any time when the exercise price of a previously awarded Option is above the Fair Market Value of a share of Common Stock, the Committee shall not, without stockholder approval, cancel and re-grant or exchange such Option for cash or a new Award with a lower (or no) exercise price.

(c) No Reload Grants. Options shall not be granted under the Plan in consideration for and shall not be conditioned upon the delivery of shares of Common Stock to the Company in payment of the exercise price and/or tax withholding obligation under any other employee stock option.

(d) Incentive Stock Options. Notwithstanding anything to the contrary in this Section 8, in the case of the grant of an Incentive Stock Option, if the Participant owns stock possessing more than 10% of the combined voting power of all classes of stock of the Company (a “10% Stockholder”), the exercise price of such Option must be at least 110% of the Fair Market Value of the shares of Common Stock on the date of grant and the Option must expire within a period of not more than five (5) years from the date of grant. Notwithstanding anything in this Section 8 to the contrary, options designated as Incentive Stock Options shall not be eligible for treatment under the Code as Incentive Stock Options (and will be deemed to be Nonqualified Stock Options) to the extent that either (a) the aggregate Fair Market Value of shares of Common Stock (determined as of the time of grant) with respect to which such Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Subsidiary) exceeds $100,000, taking Options into account in the order in which they were granted, or (b) such Options otherwise remain exercisable but are not exercised within three (3) months (or such other period of time provided in Section 422 of the Code) of separation of service (as determined in accordance with Section 3401(c) of the Code and the regulations promulgated thereunder).

(e) No Stockholder Rights. Participants shall have no voting rights and will have no rights to receive dividends or Dividend Equivalents in respect of an Option or any shares of Common Stock subject to an Option until the Participant has become the holder of record of such shares.

9. Stock Appreciation Rights

(a) General Terms. The grant, issuance, retention, vesting and/or settlement of any Stock Appreciation Right shall occur at such time and be subject to such terms and conditions as determined by the Committee or under criteria established by the Committee, which may include conditions based on continued employment or engagement, passage of time, attainment of age and/or service requirements, and/or satisfaction of performance conditions. Stock Appreciation Rights may be granted to Participants from time to time either in tandem with or as a component of Options granted under the Plan (“tandem SARs”) or not in conjunction with other Awards (“freestanding SARs”). Upon exercise of a tandem SAR as to some or all of the shares covered by the grant, the related Option shall be canceled automatically to the extent of the number of shares covered by such exercise. Conversely, if the related Option is exercised as to some or all of the shares covered by the grant, the related tandem SAR, if any, shall be canceled automatically to the extent of the number of shares covered by the Option exercise. Any Stock Appreciation Right granted in tandem with an Option may be granted at the same time such Option is granted or at any time thereafter before exercise or expiration of such Option, provided that the Fair Market Value of Common Stock on the date of the SAR’s grant is not greater than the exercise price of the related Option. All freestanding SARs shall be granted subject to the same terms and conditions applicable to Options as set forth in Section 8 and all tandem SARs shall have the same exercise price as the Option to which they relate. Subject to the provisions of Section 8 and the immediately preceding sentence, the Committee may impose such other conditions or restrictions on any Stock Appreciation Right as it shall deem appropriate. Stock Appreciation Rights may be settled in Common Stock, cash, Restricted Stock or a combination thereof, as determined by the Committee and set forth in the applicable Award Agreement.

(b) No Repricing without Stockholder Approval. Other than in connection with a change in the Company’s capitalization (as described in Section 13), the Committee shall not, without stockholder approval, reduce the exercise price of a previously awarded Stock Appreciation Right and, at any time when the exercise price of a previously awarded Stock Appreciation Right is above the Fair Market Value of a share of Common Stock, the Committee shall not, without stockholder approval, cancel and re-grant or exchange such Stock Appreciation Right for cash or a new Award with a lower (or no) exercise price.

(c) No Stockholder Rights. Participants shall have no voting rights and will have no rights to receive dividends or Dividend Equivalents in respect of an Award of Stock Appreciation Rights or any shares of Common Stock subject to an Award of Stock Appreciation Rights until the Participant has become the holder of record of such shares.

10. Restricted Stock and Restricted Stock Units

(a) Vesting and Performance Criteria. The grant, issuance, vesting and/or settlement of any Award of Restricted Stock or Restricted Stock Units shall occur at such time and be subject to such terms and conditions as determined by the Committee or under criteria established by the Committee, which may include conditions based on continued employment or engagement, passage of time, attainment of age and/or service requirements, and/or satisfaction of performance conditions. In addition, the Committee shall have the right to grant Restricted Stock or Restricted Stock Units as the form of payment for grants or rights earned or due under other stockholder-approved compensation plans or arrangements of the Company.

(b) Dividends and Distributions. Participants in whose name Restricted Stock is granted shall be entitled to receive all dividends and other distributions paid with respect to those shares of Common Stock, unless determined otherwise by the Committee. The Committee will determine whether any such dividends or distributions will be automatically reinvested in additional shares of Restricted Stock and/or subject to the same restrictions on transferability as the Restricted Stock with respect to which they were distributed or whether such dividends or distributions will be paid in cash. Shares underlying Restricted Stock Units shall be entitled to dividends or distributions only to the extent provided by the Committee.

(c) Voting Rights. Participants in whose name Restricted Stock Units are granted shall have no voting rights with respect to any Restricted Stock Units granted hereunder.

11. Deferral of Payment

The Committee may, in an Award Agreement or otherwise, provide for the deferred delivery of Common Stock or cash upon settlement, vesting or other events with respect to an Award. Notwithstanding anything herein to the contrary, in no event will any election to defer the delivery of Common Stock or any other payment with respect to any Award be allowed if the Committee determines, in its sole discretion, that the deferral would result in the imposition of the additional tax under Section 409A(a)(1)(B) of the Code. No Award shall provide for deferral of compensation that does not comply with Section 409A of the Code. The Company, the Board and the Committee shall have no liability to a Participant, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A of the Code is not so exempt or compliant or for any action taken by the Board or the Committee.

12. Conditions and Restrictions Upon Securities Subject to Awards

The Committee may provide that the Common Stock issued upon exercise of an Option or Stock Appreciation Right or otherwise subject to or issued under an Award shall be subject to such further agreements, restrictions, conditions or limitations as the Committee in its discretion may specify prior to the exercise of such Option or Stock Appreciation Right or the grant, vesting or settlement of such Award, including without limitation, conditions on vesting or transferability, forfeiture or repurchase provisions and method of payment for the Common Stock issued upon exercise, vesting or settlement of such Award (including the actual or constructive surrender of Common Stock already owned by the Participant) or payment of taxes arising in connection with an Award. Without limiting the foregoing, such restrictions may address the timing and manner of any resales by the Participant or other subsequent transfers by the Participant of any shares of Common Stock issued under an Award, including without limitation (i) restrictions under an insider trading policy or pursuant to applicable law, (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by the Participant and holders of other Company equity compensation arrangements, (iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers and (iv) provisions requiring Common Stock be sold on the open market or to the Company in order to satisfy tax withholding or other obligations.

13. Adjustment of and Changes in the Stock

(a) The number and kind of shares of Common Stock available for issuance under this Plan (including under any Awards then outstanding), and the number and kind of shares of Common Stock subject to the limits set forth in Section 5 of this Plan, shall be equitably adjusted by the Committee to reflect any reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off, dividend or distribution of securities, property or cash (other than regular, quarterly cash dividends), or any other event or transaction that affects the number or kind of shares of Common Stock outstanding. Such adjustment may be designed to comply with Section 424 of the Code or may be designed to treat the shares of Common Stock available under the Plan and subject to Awards as if they were all outstanding on the record date for such event or transaction or to increase the number of such shares of Common Stock to reflect a deemed reinvestment in shares of Common Stock of the amount distributed to the Company’s securityholders. The terms of any outstanding Award shall also be equitably adjusted by the Committee as to price, number or kind of shares of Common Stock subject to such Award, vesting, and other terms to reflect the foregoing events, which adjustments need not be uniform as between different Awards or different types of Awards. No fractional shares of Common Stock shall be issued or issuable pursuant to such an adjustment.

(b) In the event there shall be any other change in the number or kind of outstanding shares of Common Stock, or any stock or other securities into which such Common Stock shall have been changed, or for which it shall have been exchanged, by reason of a Change in Control, other merger, consolidation or otherwise, then the Committee shall determine the appropriate and equitable adjustment to be effected, which adjustments need not be uniform between different Awards or different types of Awards. In addition, in the event of such change described in this paragraph, the Committee may accelerate the time or times at which any Award may be exercised, consistent with and as otherwise permitted under Section 409A of the Code, and may provide for cancellation of such accelerated Awards that are not exercised within a time prescribed by the Committee in its sole discretion.

(c) Unless otherwise expressly provided in the Award Agreement or another contract, including an employment or services agreement, or under the terms of a transaction constituting a Change in Control, the Committee may provide that any or all of the following shall occur upon a Participant’s Termination of Employment without Cause within twenty-four (24) months following a Change in Control: (a) in the case of an Option or Stock Appreciation Right, the Participant shall have the ability to exercise any portion of the Option or Stock Appreciation Right not previously exercisable, (b) in the case of any Award the vesting of which is in whole or in part subject to performance criteria, all conditions to the grant, issuance, retention, vesting or transferability of, or any other restrictions applicable to, such Award shall immediately lapse and the Participant shall have the right to receive a payment based on target level achievement or actual performance through a date determined by the Committee, and (c) in the case of outstanding Restricted Stock and/or Restricted Stock Units (other than those referenced in subsection (b)), all conditions to the grant, issuance, retention, vesting or transferability of, or any other restrictions applicable to, such Award shall immediately lapse. Notwithstanding anything herein to the contrary, in the event of a Change in Control in which the acquiring or surviving company in the transaction does not assume or continue outstanding Awards upon the Change in Control, immediately prior to the Change in Control, all Awards that are not assumed or continued shall be treated as follows effective immediately prior to the Change in Control: (a) in the case of an Option or Stock Appreciation Right, the Participant shall have the ability to exercise such Option or Stock Appreciation Right, including any portion of the Option or Stock Appreciation Right not previously exercisable, (b) in the case of any Award the vesting of which is in whole or in part subject to performance criteria, all conditions to the grant, issuance, retention, vesting or transferability of, or any other restrictions applicable to, such Award shall immediately lapse and the Participant shall have the right to receive a payment based on target level achievement or actual performance through a date determined by the Committee, as determined by the Committee, and (c) in the case of outstanding Restricted Stock and/or Restricted Stock Units (other than those referenced in subsection (b)), all conditions to the grant, issuance, retention, vesting or transferability of, or any other restrictions applicable to, such Award shall immediately lapse. In no event shall any action be taken pursuant to this Section 13(c) that would change the payment or settlement date of an Award in a manner that would result in the imposition of any additional taxes or penalties pursuant to Section 409A of the Code.

(d) Notwithstanding anything in this Section 13 to the contrary, in the event of a Change in Control, the Committee may provide for the cancellation and cash settlement of all outstanding Awards upon such Change in Control.

(e) The Company shall notify Participants holding Awards subject to any adjustments pursuant to this Section 13 of such adjustment, but (whether or not notice is given) such adjustment shall be effective and binding for all purposes of the Plan.

(f) Notwithstanding anything in this Section 13 to the contrary, an adjustment to an Option or Stock Appreciation Right under this Section 13 shall be made in a manner that will not result in the grant of a new Option or Stock Appreciation Right under Section 409A of the Code.

14. Transferability

Each Award may not be sold, transferred for value, pledged, assigned, or otherwise alienated or hypothecated by a Participant other than by will or the laws of descent and distribution, and each Option or Stock Appreciation Right shall be exercisable only by the Participant during his or her lifetime. Notwithstanding the foregoing, (i) outstanding Options may be exercised following the Participant’s death by the Participant’s beneficiaries or as permitted by the Committee and (ii) a Participant may transfer or assign an Award as a gift to an entity wholly owned by such Participant (an “Assignee Entity”), provided that such Assignee Entity shall be entitled to exercise assigned Options and Stock Appreciation Rights only during lifetime of the assigning Participant (or following the assigning Participant’s death, by the Participant’s beneficiaries or as otherwise permitted by the Committee) and provided further that such Assignee Entity shall not further sell, pledge, transfer, assign or otherwise alienate or hypothecate such Award.

15. Compliance with Laws and Regulations

This Plan, the grant, issuance, vesting, exercise and settlement of Awards hereunder, and the obligation of the Company to sell, issue or deliver shares of Common Stock under such Awards, shall be subject to all applicable foreign, federal, state and local laws, rules and regulations, stock exchange rules and regulations, and to such approvals by any governmental or regulatory agency as may be required. The Company shall not be required to register in a Participant’s name or deliver Common Stock prior to the completion of any registration or qualification of such shares under any foreign, federal, state or local law or any ruling or regulation of any government body which the Committee shall determine to be necessary or advisable. To the extent the Company is unable to or the Committee deems it infeasible to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any shares of Common Stock hereunder, the Company and its Subsidiaries shall be relieved of any liability with respect to the failure to issue or sell such shares of Common Stock as to which such requisite authority shall not have been obtained. No Option shall be exercisable and no Common Stock shall be issued and/or transferable under any other Award unless a registration statement with respect to the Common Stock underlying such Option is effective and current or the Company has determined, in its sole and absolute discretion, that such registration is unnecessary.

In the event an Award is granted to or held by a Participant who is employed or providing services outside the United States, the Committee may, in its sole discretion, modify the provisions of the Plan or of such Award as they pertain to such individual to comply with applicable foreign law or to recognize differences in local law, currency or tax policy. The Committee may also impose conditions on the grant, issuance, exercise, vesting, settlement or retention of Awards in order to comply with such foreign law and/or to minimize the Company’s obligations with respect to tax equalization for Participants employed outside their home country.

16. Withholding

To the extent required by applicable federal, state, local or foreign law, the Committee may and/or a Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise with respect to any Award, or the issuance or sale of any shares of Common Stock. The Company shall not be required to recognize any Participant rights under an Award, to issue shares of Common Stock or to recognize the disposition of such shares of Common Stock until such obligations are satisfied. To the extent permitted or required by the Committee, these obligations may or shall be satisfied by the Company withholding cash from any compensation otherwise payable to or for the benefit of a Participant, the Company withholding a portion of the shares of Common Stock that otherwise would be issued to a Participant under such Award or any other award held by the Participant or by the Participant tendering to the Company cash or, if allowed by the Committee, shares of Common Stock.

17. Disqualifying Dispositions

Any Participant who shall make a “disposition” (as defined in Section 424 of the Code) of all or any portion of shares of Common Stock acquired upon the exercise of an Incentive Stock Option within two years from the date of grant of such Incentive Stock Option or within one year after the issuance of shares of Common Stock acquired upon exercise of such Incentive Stock Option shall be required to immediately advise the Company in writing as to the occurrence of the sale and the price realized upon the sale of such shares of Common Stock.

18. Amendment of the Plan or Awards

The Board may amend, alter or discontinue this Plan and the Committee may amend or alter any agreement or other document evidencing an Award made under this Plan but, except as provided pursuant to the provisions of Section 13, no such amendment shall, without the approval of the stockholders of the Company:

(a) increase the maximum number of shares of Common Stock for which Awards may be granted under this Plan;

(b) reduce the price at which Options may be granted below the price provided for in Section 8(a);

(d) extend the term of this Plan;

(e) change the class of persons eligible to be Participants;

(f) increase the individual maximum limits in Section 5(e); or

(g) otherwise amend the Plan in any manner requiring stockholder approval by law or the rules of any stock exchange or market or quotation system on which the Common Stock is traded, listed or quoted.

No amendment or alteration to the Plan or an Award or Award Agreement shall be made which would materially impair the rights of the holder of an Award, without such holder’s consent, provided that no such consent shall be required if the Committee determines in its sole discretion and prior to the date of any Change in Control that such amendment or alteration either (i) is required or advisable in order for the Company, the Plan or the Award to satisfy any law or regulation or to meet the requirements of or avoid adverse financial accounting consequences under any accounting standard, or (ii) is not reasonably likely to significantly diminish the benefits provided under such Award, or that any such diminishment has been adequately compensated.

19. No Liability of Company

The Company, any Subsidiary or Affiliate which is in existence or hereafter comes into existence, the Board and the Committee shall not be liable to a Participant or any other person as to: (a) the non-issuance or sale of shares of Common Stock as to which the Company has been unable to obtain from any regulatory body having jurisdiction the authority deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any shares of Common Stock hereunder; and (b) any tax consequence expected, but not realized, by any Participant or other person due to the receipt, vesting, exercise or settlement of any Award granted hereunder.

20. Non-Exclusivity of Plan

Neither the adoption of this Plan by the Board nor the submission of this Plan to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or the Committee to adopt such other incentive arrangements as either may deem desirable, including without limitation, the granting of restricted stock, stock options or other equity awards otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.

21. Governing Law

This Plan and any agreements or other documents hereunder shall be interpreted and construed in accordance with the laws of the State of Maryland and applicable federal law. Any reference in this Plan or in the agreement or other document evidencing any Awards to a provision of law or to a rule or regulation shall be deemed to include any successor law, rule or regulation of similar effect or applicability.

22. No Right to Employment, Reelection or Continued Service

Nothing in this Plan or an Award Agreement shall interfere with or limit in any way the right of the Company, its Subsidiaries and/or its Affiliates to terminate any Participant’s employment, service on the Board or service at any time or for any reason not prohibited by law, nor shall this Plan or an Award itself confer upon any Participant any right to continue his or her employment or service for any specified period of time. Neither an Award nor any benefits arising under this Plan shall constitute an employment contract with the Company, any Subsidiary and/or its Affiliates. Subject to Sections 4 and 18, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Board without giving rise to any liability on the part of the Company, its Subsidiaries and/or its Affiliates.

23. Specified Employee Delay

To the extent any payment under this Plan is considered deferred compensation subject to the restrictions contained in Section 409A of the Code, such payment may not be made to a specified employee (as determined in accordance with a uniform policy adopted by the Company with respect to all arrangements subject to Section 409A of the Code) upon Separation from Service before the date that is six months after the specified employee’s Separation from Service (or, if earlier, the specified employee’s death). Any payment that would otherwise be made during this period of delay shall be accumulated and paid on the sixth month plus one day following the specified employee’s Separation from Service (or, if earlier, as soon as administratively practicable after the specified employee’s death).

24. No Liability of Committee Members

No member of the Committee shall be personally liable by reason of any contract or other instrument executed by such member or on his or her behalf in his or her capacity as a member of the Committee nor for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless each member of the Committee and each other employee, officer or director of the Company to whom any duty or power relating to the administration or interpretation of the Plan may be allocated or delegated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim) arising out of any act or omission to act in connection with the Plan unless arising out of such person’s own fraud or willful bad faith; provided, however, that approval of the Board shall be required for the payment of any amount in settlement of a claim against any such person. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation and Bylaws (as each may be amended from time to time), as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

25. Severability

If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

26. Unfunded Plan

The Plan is intended to be an unfunded plan. Participants are and shall at all times be general creditors of the Company with respect to their Awards. If the Committee or the Company chooses to set aside funds in a trust or otherwise for the payment of Awards under the Plan, such funds shall at all times be subject to the claims of the creditors of the Company in the event of its bankruptcy or insolvency.

27. Clawback/Recoupment

Notwithstanding any other provisions in this Plan, Awards granted under this Plan will be subject to recoupment in accordance with any clawback policy that the Company adopts or is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of misconduct. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company. By accepting an Award, the Participant is agreeing to be bound by any such clawback policy, as in effect or as may be adopted and/or modified from time to time by the Company in its discretion.

Exhibit 10.8

Execution Form

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into as of the _____ day of November, 2019, by and between Broadmark Realty Capital Inc., a Maryland corporation (the “Company”), and the undersigned (“Indemnitee”).

WHEREAS, at the request of the Company, Indemnitee currently serves as a director and/or an officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of such service;

WHEREAS, as an inducement to Indemnitee to serve or continue to serve in such capacity, the Company has agreed to indemnify Indemnitee and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses.

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1. Definitions. For purposes of this Agreement:

(a) “Change in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if, after the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of all of the Company’s then-outstanding securities entitled to vote generally in the election of directors without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person’s attaining such percentage interest; (ii) the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) at any time, a majority of the members of the Board of Directors are not individuals whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by the affirmative vote of at least two-thirds of the directors then in office who were directors as of the Effective Date or whose election or nomination for election was previously so approved.

(b) “Corporate Status” means the actual or alleged status of a person as a present or former director, officer, or employee of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at the request of the Company: (i) if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise (1) of which a majority of the voting power or equity interest is or was owned directly or indirectly by the Company or (2) the management of which is controlled directly or indirectly by the Company and (ii) if, as a result of Indemnitee’s service to the Company or any of its affiliated entities, Indemnitee is subject to duties to, or required to perform services for, an employee benefit plan or its participants or beneficiaries, including as a deemed fiduciary thereof.

(c) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification and/or advance of Expenses is sought by Indemnitee.

(d) “Effective Date” means the date set forth in the first paragraph of this Agreement.

(e) “Expenses” means any and all reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, arbitration and mediation costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise subject to or the target of a Proceeding. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding, including, without limitation, the premium for, security for and other costs relating to any cost bond, supersedes bond or other appeal bond or its equivalent.

(f) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification or advance of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

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(g) “Proceeding” means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing, claim, demand or discovery request or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature, including any appeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered a Proceeding.

Section 2. Services by Indemnitee. Indemnitee serves or will serve in the capacity or capacities set forth in the first WHEREAS clause above. However, this Agreement shall not impose any independent obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company. This Agreement shall not be deemed an employment contract between the Company (or any other entity) and Indemnitee.

Section 3. General. The Company shall indemnify, and advance Expenses to, Indemnitee to the maximum extent permitted by Maryland law in effect on the Effective Date and as amended from time to time, unless otherwise limited by this Agreement; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. Unless otherwise limited by this Agreement, the rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by the Maryland General Corporation Law (the “MGCL”), including, without limitation, Section 2-418 of the MGCL.

Section 4. Standard for Indemnification. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, is threatened to be, or reasonably believes that he or she shall be made a party to any Proceeding, the Company shall indemnify and hold harmless Indemnitee against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any such Proceeding unless it is established that (a) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) Indemnitee actually received an improper personal benefit in money, property or services or (c) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

Section 5. Certain Limits on Indemnification. Notwithstanding any other provision of this Agreement (other than Section 6), and except to the extent otherwise permitted by Maryland law, Indemnitee shall not be entitled to:

(a) indemnification hereunder if the Proceeding was one by or in the right of the Company and Indemnitee is adjudged, in a final adjudication of the Proceeding not subject to further appeal, to be liable to the Company;

(b) indemnification hereunder if Indemnitee is adjudged, in a final adjudication of the Proceeding not subject to further appeal, to be liable on the basis that personal benefit in money, property or services was improperly received in any Proceeding charging improper personal benefit to Indemnitee, whether or not involving action in Indemnitee’s Corporate Status; or

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(c) indemnification or advance of Expenses hereunder if the Proceeding was initiated by Indemnitee, unless: (i) the Proceeding was initiated to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement, or (ii) the Company’s charter or bylaws, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.

Section 6. Court-Ordered Indemnification. Notwithstanding any other provision of this agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances:

(a) if such court determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or

(b) if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper without regard to any limitation on such court-ordered indemnification contemplated by Section 2-418(d)(2)(ii) of the MGCL.

Section 7. Indemnification for Expenses of an Indemnitee Who is Wholly or Partially Successful. Notwithstanding any other provision of this Agreement, and without limiting any such provision, to the extent that Indemnitee was or is, by reason of Indemnitee’s Corporate Status, made a party or subject to or the target of any Proceeding and is successful, on the merits or otherwise, in the defense of such Proceeding, the Company shall indemnify Indemnitee for all Expenses, judgements, penalties and/or amounts paid in settlement that are actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses, judgements, penalties and/or amounts paid in settlement that are actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each such claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section 7 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, and a decision by any government, regulatory or self-regulatory authority, agency or body not to commence or pursue any investigation, civil or criminal enforcement matter or case or any civil suit shall be deemed to be a successful result as to such claim, issue or matter.

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Section 8. Advance of Expenses for Indemnitee. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, is threatened to be or reasonably believes that he or she shall be made a party or subject to or the target of any Proceeding, the Company shall, without requiring a preliminary determination of Indemnitee’s ultimate entitlement to indemnification hereunder, advance all Expenses actually and reasonably incurred by Indemnitee in connection with such Proceeding. The Company shall make such advance of Expenses within ten days after the receipt by the Company of a statement or statements requesting such advance from time to time, whether prior to or after final disposition of such Proceeding, which advance may be in the form of, in the reasonable discretion of Indemnitee (but without duplication), (a) payment of such Expenses directly to third parties on behalf of Indemnitee, (b) advance of funds to Indemnitee in an amount sufficient to pay such Expenses or (c) reimbursement to Indemnitee for Indemnitee’s payment of such Expenses. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee (provided, however, that following a Change in Control or in the event of a Proceeding brought by or in the name of the Company, Indemnitee shall be required to submit to the Company only summary statements and invoices and, in connection with such submissions, Indemnitee shall have the right to withhold or redact any documents or information that are protected by the attorney-client privilege or the attorney work product doctrine) and shall include or be preceded or accompanied by a written affirmation by Indemnitee and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor.

Section 9. Indemnification and Advance of Expenses as a Witness or Other Participant. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to participate in any Proceeding, whether instituted by the Company or any other person, and to which Indemnitee is not a party, Indemnitee shall be advanced and indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith within ten days after the receipt by the Company of a statement or statements requesting any such advance or indemnification from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee. In connection with any such advance of Expenses, the Company may require Indemnitee to provide an undertaking and affirmation substantially in the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of execution thereof.

Section 10. Procedure for Determination of Entitlement to Indemnification.

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary or appropriate to determine whether and to what extent Indemnitee is entitled to indemnification; provided that the failure of Indemnitee to so notify the Company will not relieve the Company from any liability that it may have to Indemnitee under this Agreement or otherwise to the extent the failure or delay does not materially prejudice the Company. Indemnitee may submit one or more such requests from time to time and at such time(s) as Indemnitee deems appropriate in Indemnitee’s sole discretion. The officer of the Company receiving any such request from Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.

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(b) Upon written request by Indemnitee for indemnification pursuant to Section 10(a) above, a determination with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control has occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, which Independent Counsel shall be selected by Indemnitee and approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control has not occurred, (A) by a majority vote of a quorum consisting of the Disinterested Directors, or if such quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by Indemnitee, which approval shall not be unreasonably withheld or delayed, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if so directed by the Board of Directors, by the stockholders of the Company, other than directors or officers who are parties to the Proceeding. If it is so determined that Indemnitee is entitled to indemnification, the Company shall make payment to Indemnitee within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary or appropriate to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b). Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.

Section 11. Presumptions and Effect of Certain Proceedings.

(a) In making any determination with respect to entitlement to indemnification hereunder, the person or persons (including any court having jurisdiction over the matter) making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the burden of overcoming that presumption in connection with the making of any determination contrary to that presumption. The failure of the person or persons or entity making any determination with respect to Indemnitee’s entitlement to indemnification hereunder to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper, or other rights are available, because Indemnitee has met the requisite standard of conduct, shall not be a defense to the action and shall not create a presumption regarding whether Indemnitee has met the requisite standard of conduct set forth in Section 4.

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(b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.

(c) The knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes of determining any other right to indemnification under this Agreement.

Section 12. Remedies of Indemnitee.

(a) All disputes or differences which may arise under or in connection with this Agreement, whether arising before or after termination of this Agreement, including without limitation disputes arising out of any actual or alleged (i) determination made pursuant to Section 10(b) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses not timely made pursuant to Sections 8 or 9 of this Agreement, (iii) failure of a determination of entitlement to indemnification to have been made pursuant to Section 10(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) failure of any payment of indemnification to be made pursuant to Sections 7 or 9 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) failure of payment of indemnification pursuant to any other section of this Agreement to be made within ten days after a determination has been made that Indemnitee is entitled to indemnification.

(b) In the event of a dispute arising hereunder, the Indemnitee or the Company shall be entitled to an arbitration conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association, of Indemnitee’s entitlement to indemnification or advance of Expenses. The arbitration commenced pursuant to this Section shall be conducted in all respects as a de novo arbitration, on the merits, and Indemnitee shall not be prejudiced by reason of the prior adverse determination. Indemnitee shall commence a proceeding seeking an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce Indemnitee’s rights under Section 7 of this Agreement. Except as set forth herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration. The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate before any such arbitrator that the Company is bound by all of the provisions of this Agreement.

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(c) In any arbitration commenced pursuant to this Section 12, or otherwise arising out of this Agreement, Indemnitee shall be presumed to be entitled to indemnification or advance of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee commences an arbitration pursuant to this Section 12, or otherwise arising out of this Agreement, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).

(d) If a determination shall have been made pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any arbitration commenced pursuant to this Section 12, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not misleading, in connection with the request for indemnification that was not disclosed in connection with the determination.

(e) In the event that Indemnitee is successful in seeking, pursuant to this Section 12, an award in arbitration to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by Indemnitee in such arbitration. If it shall be determined in such arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such arbitration shall be appropriately prorated.

(f) Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing with either the tenth day after the date on which the Company was requested to advance Expenses in accordance with Sections 8 or 9 of this Agreement or the 60^th day after the date on which the Company was requested to make the determination of entitlement to indemnification under Section 10(b) of this Agreement, as applicable, and (ii) ending on the date such payment is made to Indemnitee by the Company.

Section 13. Defense of the Underlying Proceeding.

(a) Indemnitee shall notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding. The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

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(b) Subject to the provisions of the last sentence of this Section 13(b) and of Section 13(c) below, and unless and to the extent inconsistent with the terms and conditions of any applicable policy of insurance that vests in the insurer the right and duty to defend such Proceeding, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 days following receipt of notice of any such Proceeding under Section 13(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld, conditioned, or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise with respect to Indemnitee which (i) includes an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee, or (iii) would impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b) shall not apply to a Proceeding brought by Indemnitee under Section 12 of this Agreement.

(c) Notwithstanding the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, conditioned, or delayed, that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, conditioned, or delayed, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, conditioned, or delayed, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, conditioned, or delayed, at the expense of the Company (subject to Section 12(d) of this Agreement), to represent Indemnitee in connection with any such matter.

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Section 14. Non-Exclusivity; Survival of Rights; Subrogation and Reimbursement.

(a) The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the charter or bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise, including, without limitation, any additional indemnification permitted by the MGCL, including, without limitation, Section 2-418 of the MGCL. Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of the charter or bylaws of the Company, this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised prior or subsequent to such amendment, alteration or repeal. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion or employment of any other right or remedy.

(b) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (or for which advancement is provided hereunder) if and to the extent that Indemnitee has otherwise actually received payment for such amounts under any insurance policy, contract, agreement or otherwise. After any payment by or on behalf of the Company in connection with this Agreement, if the Indemnitee receives, directly or indirectly, amounts from any insurance, indemnification or other source, which, when netted against any cost of recovery, reduces the amount of Expenses or other indemnifiable amounts actually incurred, then the Indemnitee shall promptly, and in no event later than 90 days after such determination or receipt, reimburse or refund to the Company an amount equal to the amount of such net reduction. In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

Section 15. Insurance.

(a) The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors covering Indemnitee or any claim made against Indemnitee by reason of Indemnitee’s Corporate Status and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee by reason of Indemnitee’s Corporate Status. To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees or agents or fiduciaries of the Company or of any other corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available to similarly situated individual insureds. In the event of a Change in Control, the Company shall extend the policy period of or secure an extended reporting period with respect to any and all directors and officers liability insurance policies that were maintained by the Company immediately prior to the Change in Control for a period of six years with the insurance carrier or carriers in place at the time of the Change in Control; provided, however, that if such extended policy period or extended reporting period is not available, the Company shall use commercially reasonable efforts to obtain a policy substantially comparable in scope and amount from an insurance carrier with an AM Best rating that is the same or better than the AM Best rating of the existing insurance carrier; provided, further, however, in no event shall the Company be required to expend in the aggregate in excess of 250% of the annual premium or premiums paid by the Company for directors and officers liability insurance in effect on the date of the Change in Control. In the event that 250% of the annual premium paid by the Company for such existing directors and officers liability insurance is insufficient for such coverage, the Company shall spend up to that amount to purchase such lesser coverage as may be obtained with such amount.

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(b) The Company shall, upon reasonable written request, provide Indemnitee with a copy of all directors’ and officers’ liability insurance binders, policies, declarations, endorsements, and other insurance materials providing coverage for Indemnitee’s actions pursuant to his or her Corporate Status. The Company shall promptly notify Indemnitee if the insurer cancels or refuses to renew such coverage (or any part of such coverage)

(c) The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect the rights or obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights or obligations of the Company under any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to which Indemnitee is a party or a participant (as a witness or otherwise) the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.

(d) The Indemnitee shall cooperate with the Company or any insurance carrier of the Company with respect to any Proceeding.

Section 16. Coordination of Payments. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 17. Contribution.

(a) If the indemnification provided in this Agreement is unavailable in whole or in part and may not be paid to Indemnitee for any reason, other than for failure to satisfy the standard of conduct set forth in Section 4 or due to the provisions of Section 5, then, with respect to any Proceeding in which the Company is jointly liable with Indemnitee, to the fullest extent permissible under applicable law, the Company, in lieu of indemnifying and holding harmless Indemnitee, shall pay, any Expenses, judgments, penalties, and/or amounts paid or to be paid in settlement, in connection with any Proceeding in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and transaction(s) giving rise to such Proceeding and (ii) the relative fault of Indemnitee and the Company (and its other directors, officers, employees and agents) in connection with the events and circumstances underlying such Proceeding.

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(b) Provided that Indemnitee has met the requisite standard of conduct for indemnification set forth in Section 4 and subject to the provisions of Section 5, the Company hereby agrees to fully indemnify and hold harmless Indemnitee from any claims for contribution which may be brought by officers, directors or employees of the Company other than Indemnitee who may be jointly liable with Indemnitee.

Section 18. Reports to Stockholders. To the extent required by the MGCL, the Company shall report in writing to its stockholders the payment of any amounts for indemnification of, or advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or in the right of the Company with the notice of the meeting of stockholders of the Company next following the date of the payment of any such indemnification or advance of Expenses or prior to such meeting.

Section 19. Duration of Agreement; Binding Effect.

(a) This Agreement shall continue until and terminate on the later of (i) the date that Indemnitee shall have ceased to serve as a director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company and (ii) the date that Indemnitee is no longer subject to any actual or possible Proceeding (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement).

(b) The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

(c) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

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(d) The Company and Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that, in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such requirement of such a bond or undertaking.

Section 20. Severability. If any provision or provisions of this Agreement shall be held to be invalid, void, illegal or otherwise unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, void, illegal or otherwise unenforceable that is not itself invalid, void, illegal or otherwise unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, void, illegal or otherwise unenforceable, that is not itself invalid, void, illegal or otherwise unenforceable) shall be construed so as to give effect to the intent manifested thereby. If any provision or provisions of this Agreement shall be determined to be invalid or unenforceable, the Company in good faith shall expeditiously take all necessary or appropriate actions to provide Indemnitee with rights under this Agreement (including with respect to indemnification, advance of Expenses and other rights) that effect the original intent of this Agreement as closely as possible.

Section 21. Counterparts. This Agreement may be executed in one or more counterparts, (delivery of which may be by facsimile, or via e-mail as a portable document format (.pdf) or other electronic format), each of which will be deemed to be an original, and it will not be necessary in making proof of this Agreement or the terms of this Agreement to produce or account for more than one such counterpart. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.

Section 22. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

Section 23. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor, unless otherwise expressly stated, shall such waiver constitute a continuing waiver.

-13-

Section 24. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

(a) If to Indemnitee, to the address set forth on the signature page hereto.

(b) If to the Company, to:

Broadmark Realty Capital Inc.

1420 Fifth Avenue, Suite 2000

Seattle, WA 98101

Attention: Adam Fountain

or to such other address as may have been furnished in writing to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

Section 25. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules.

[SIGNATURE PAGE FOLLOWS]

-14-

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

	COMPANY:

	BROADMARK REALTY CAPITAL INC.

	By:
		Name:
		Title:

	INDEMNITEE:

	Name:
	Address:

[Signature Page to Indemnification Agreement]

EXHIBIT A

AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED

To:	The Board of Directors of Broadmark Realty Capital Inc.

Re:	Affirmation and Undertaking

Ladies and Gentlemen:

This Affirmation and Undertaking is being provided pursuant to that certain Indemnification Agreement dated the _____ day of November, 2019, by and between Broadmark Realty Capital Inc., a Maryland corporation (the “Company”), and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to advance of Expenses in connection with [Description of Proceeding] (the “Proceeding”).

Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.

I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief that at all times, insofar as I was involved as [a director] [and] [an officer] of the Company, in any of the facts or events giving rise to the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.

In consideration of the advance by the Company for Expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established.

IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this ___ day of ____________________, 20____.

Name:

Exhibit 14.1

Adopted by the Board of Directors on November 14, 2019,

and effective upon the completion of the business

combination of the Broadmark group of companies

and Trinity Merger Corp. and its affiliates

	BROADMARK REALTY CAPITAL INC.

	CODE OF BUSINESS CONDUCT AND ETHICS

1.	Purpose of the Code and Covered Persons

This Code of Business Conduct and Ethics (the “Code”) for Broadmark Realty Capital, Inc. (the “Company”) covers a wide range of business practices and procedures. It does not cover every issue that may arise, but it sets out general guidelines for conducting the business of the Company. The Code applies to (i) employees of the Company, (ii) officers of the Company, and (iii) all members of the Company’s Board of Directors, (collectively, the “Covered Persons” and each a “Covered Person”). Each Covered Person holds an important role in maintaining the Company’s commitment to deter wrongdoing and to promote:

■

honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

■

full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (“SEC”) and in other public communications made by the Company;

■

compliance with applicable governmental laws, rules and regulations;

■

the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and

■

accountability for adherence to the Code.

For purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder, this Code shall be the code of ethics for the Company’s Chief Executive Officer, Chief Financial Officer, Controller or other chief accounting officer, and any other senior executive or financial officers of the Company performing similar functions and so designated from time to time by the Chief Executive Officer of the Company (collectively, the “Senior Executive and Financial Officers”).

After carefully reviewing this Code, you must sign the acknowledgment attached as Exhibit A hereto, indicating that you have received, read, understand and agree to comply with this Code. The acknowledgment must be returned to Adam Fountain, the Executive Vice President of the Company, the designated Code of Conduct and Ethics Compliance Officer (the “Compliance Officer”) within ten (10) business days of your receipt of this Code. You must annually thereafter affirm to the Board that you have complied with the requirements of the Code.

This Code was approved initially by the Board of Directors of the Company and thereafter shall be periodically reviewed by the Audit Committee of the Board of Directors (the “Audit Committee”) and shall be available on the Company’s website. The Company shall annually distribute this Code to all Covered Persons and remind them of this Code and reinforce these principles and standards throughout the Company.

2.	Compliance with Laws, Rules and Regulations

Obeying the law, both in letter and spirit, is the foundation of which the Company’s ethical standards are built. All Covered Persons should respect and obey all laws, rules and regulations applicable to the business and operations of the Company. Although Covered Persons are not expected to know all of the details of these laws, rules and regulations, it is important to know enough to determine when to seek advice from supervisors, managers, officers or other appropriate Company personnel.

3.	Raising Questions and Reporting Violations of the Code

All Covered Persons have a duty to raise questions if they need guidance about the best course of action in a particular situation, and to report any known or suspected violation of this Code, including any violation of the laws, rules, regulations or policies that apply to the Company. Employees should contact their supervisor, senior management or the Compliance Officer. Executive officers and directors should contact the Chair of the Audit Committee. Concerns about potential misconduct can also be reported through the Whistleblower Hotline by following the reporting instructions set out under the Company’s Whistleblower Policy.

Nothing in this Code prohibits any Covered Person from reporting any possible violation of law or regulation to any government agency or entity during or following such Covered Person’s employment.

4.	Policy Against Retaliation

The Company prohibits retaliation against an individual who, in good faith, seeks help or reports known or suspected violations of this Code or of a law, rule or regulation. Retaliation for reporting a federal offense is illegal under federal law. Any reprisal or retaliation against a Covered Person because the Covered Person, in good faith, sought help or filed a report will be subject to disciplinary action, including potential termination of employment.

5.	Conflicts of Interest

Covered Persons should be scrupulous in avoiding conflicts of interest with regard to the interests of the Company. A “conflict of interest” occurs when a Covered Person’s private interest interferes (or appears to interfere) in any material respect with the interests of, or his or her service to, the Company.

The following list provides examples of prohibited conflicts of interest and required conduct under this Code, but Covered Persons should keep in mind that these examples are not exhaustive. Each Covered Person must:

■

not use his or her personal influence or personal relationships improperly to influence business decisions or financial reporting by the Company whereby the Covered Person or his or her relatives or friends would benefit personally to the detriment of the Company;

■

not cause the Company to take action, or fail to take action, for the individual personal benefit of the Covered Person to the detriment of the Company;

■

report at least annually any affiliations or other relationships related to conflicts of interest;

■

not engage in competition with the Company;

■

not receive, or provide to any of his or her relatives or friends, an improper personal benefit as a result of his or her position with the Company; and

■

not use nonpublic Company, or nonpublic third party, information for his or her personal gain or the personal gain of his or her relatives or friends.

The overarching principle is that the personal interest of a Covered Person should not be placed before the interest of the Company. Additionally, federal securities laws prohibit personal loans to directors and executive officers by the Company.

Conflicts of interest may not always be clear-cut and further review and discussion may be appropriate. An employee who becomes aware of a conflict or potential conflict of interest should bring it to the attention of a supervisor, manager, or other appropriate personnel. Where there is real or perceived conflict involving a director or executive officer of the Company, the matter may also be referred to the Audit Committee. The Audit Committee is responsible for assessing any potential conflict of interest involving a director or executive officer and reporting to the Board of Directors. Examples of potential conflicts of interest that should be reported include (among other things):

■

service as a director on the board of any other business organization that is a competitor of the Company;

■

the receipt of gifts or entertainment from any company with which the Company has current or prospective business dealings in violation of the policies regarding gifts and entertainment included elsewhere in this Code; or

■

any ownership interest in, or any consulting or employment relationship with, any of the Company’s unaffiliated service providers.

Employees are expected to devote their best efforts and substantially full business time to the performance of their duties and the advancement of the business and affairs of the Company. The Company’s resources and information should not be used for personal gain, whether financial or otherwise. No Covered Person shall use their position or contacts to further private interests.

Conflicts of interest transactions may also be subject to the Company’s separate Related Party Transaction Policy. In general, the Related Party Transaction Policy applies to, among others, the Company’s executive officers, directors and director nominees, and any immediate family members of the foregoing persons (and any company or other entity in which the person has any interest material to such person). Transactions that are subject to such a policy are required to be reported, reviewed, and approved or ratified in accordance with that policy and not in accordance with any inconsistent provisions of this Code.

6.	Corporate Opportunities

Covered Persons owe a duty to the Company to advance the Company’s legitimate interests when the opportunity to do so arises. Covered Persons are prohibited from (a) taking for themselves personally opportunities that are discovered through the use of corporate property, information or position; (b) using corporate property, information or their position for personal gain; and (c) competing with the Company.

7.	Confidentiality

Covered Persons shall maintain the privacy of confidential information entrusted to them by the Company or parties with whom the Company transacts business, except when disclosure is authorized by the Chief Executive Officer or Chief Financial Officer of the Company or required by laws, regulations or legal proceedings. Whenever feasible and appropriate, Covered Persons should consult with the Compliance Officer if they believe they have a legal obligation to disclose confidential information. Confidential information includes, without limitation, all nonpublic information concerning the Company, including its business, marketing, properties, business strategies, financial information, forecasts, personnel information, and all other information the disclosure of which might be harmful to the Company or parties with which the Company transacts business, including, without limitation, information that could (i) be of use to competitors of the Company, (ii) have an adverse effect on the Company’s business relationships, including its borrowers, or otherwise adversely affect the reputation or perception of the Company in the business, financial, investment or real estate community, (iii) impair the value of any of the Company’s assets, or (iv) expose the Company to legal claims, regulatory actions or other forms of liability. Except as set forth in the last paragraph of this section, Covered Persons shall not share confidential information with anyone outside of the Company, including family and friends who do not need to know the information to carry out their duties to the Company. Covered Persons remain under an obligation to keep all information confidential even if their relationship with the Company ends. All public and media communications involving the Company shall be supervised by the Chief Executive Officer, Chief Financial Officer and Executive Vice President of the Company and in accordance with the Company’s Corporate Communications Policy.

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or regulation or as permitted by this Code (including the following paragraph), such matters shall not be disclosed to anyone other than the Board, the Audit Committee and legal advisers.

8.	Recordkeeping

All of the Company’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions and must conform both to applicable legal requirements and to the Company’s system of internal controls. Unrecorded or “off the books” funds or assets should not be maintained unless permitted by applicable law or regulation and authorized by the Audit Committee. Records should always be retained or destroyed according to the Company’s record retention policies.

9.	Competition and Fair Dealing

The Company seeks to compete in a fair and honest manner. Each Covered Person shall deal fairly with the Company’s customers, service providers, competitors, officers and employees. No Covered Person should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing or practice. The Company seeks competitive advantages through superior performance rather than through unethical or illegal business practices. Stealing proprietary information, possessing trade secret information that was obtained without the owner’s consent, or inducing such disclosures by past or present employees of other companies is prohibited. Covered Persons must disclose, prior to or at their time of hire, the existence of any employment agreement, non-compete or non-solicitation agreement, confidentiality agreement or similar agreement with a former employer that may in any way restrict or prohibit the performance of any duties or responsibilities of their positions with the Company. Copies of such agreements should be provided to the Chief Executive Officer of the Company to permit evaluation of the agreement in light of the Covered Person’s position. In no event shall a Covered Person use any trade secrets, proprietary information or other similar property, acquired in the course of his or her employment with another employer, in the performance of his or her duties for or on behalf of the Company. Whenever the ethical or legal requirements of a situation are unclear, Covered Persons should contact their supervisor or the Compliance Officer.

10.	Protection and Proper Use of Company Assets

All Covered Persons shall protect the Company’s assets and ensure their efficient and proper use. Company assets include, but are not limited to, confidential information, software, computers, office equipment and supplies. All Company employees must appropriately secure all Company property within his or her control to prevent its unauthorized use. Theft, carelessness, and waste have a direct impact on the Company’s profitability, and all assets of the Company should be used for legitimate business purposes. The Company’s assets may not be used for personal benefit, sold, loaned, given away or disposed of without proper authorization. Permitting Company property to be damaged, lost or used in an unauthorized manner is strictly prohibited. Covered Persons shall not use corporate or other official stationery for personal purposes.

Employees should be aware that Company property also includes all data and communications transmitted or received to or by, or contained in, the Company’s electronic or telephonic systems. Company property also includes all written communications. Employees and other users of this property should have no expectation of privacy with respect to these communications and data. To the extent permitted by law, the Company has the ability, and reserves the right, to monitor all electronic and telephonic communication. These communications may also be subject to disclosure to law enforcement or government officials.

11.	Foreign Corrupt Practices Act

The United States Foreign Corrupt Practices Act prohibits offering, giving, promising, or authorizing the payment of anything of value, directly or indirectly, to foreign officials in order to obtain, retain or direct business. Accordingly, corporate funds, property or anything of value may not be, directly or indirectly, offered, promised, authorized, or given by a Covered Person or an agent acting on his/her behalf, to a foreign official for the purpose of influencing any act or decision of such foreign official or inducing such official to use his or her influence or in order to assist in obtaining or retaining business for, or directing business to, any person. A “foreign official” is defined broadly to include officers, employees, and those acting in an official capacity on behalf of a foreign government, department, agency, or instrumentality, a state-owned or controlled entity, or a public international organization (such as the United Nations). The term also includes foreign political parties or officials and candidates for foreign political office.

Covered Persons are also prohibited from offering or paying anything of value to any foreign official if it is known or it should have been known that all or part of such payment will be used for the above-described prohibited actions. This provision includes situations when intermediaries, such as affiliates or agents, are used to channel payoffs to foreign officials.

12.	Disclosure and Compliance

It is the Company’s policy that only the Chief Executive Officer, Chief Financial Officer, Executive Vice President, or employees expressly approved by any of such officers are permitted to disclose material information concerning the Company to the public. This policy is intended to (among other things) avoid inappropriate publicity and ensure that all such information is communicated in a way that is reasonably designed to provide broad, non- exclusionary distribution of information to the public.

Each Covered Person shall be required to:

■

familiarize himself with the disclosure requirements generally applicable to the Company, including the Corporate Communications Policy;

■

not knowingly misrepresent, or cause others to misrepresent, facts about the Company to others, whether within or outside the Company, including to the Company’s directors and auditors, and to governmental regulators and self-regulatory organizations;

■

to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Company with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Company files with, or submits to, the SEC and in other public communications made by the Company;

■

comply with and promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations; and

■

review, understand and comply with the Company’s Insider Trading Policy.

Each Senior Executive and Financial Officer shall be required to:

■

monitor compliance of the Company’s finance organization and other key employees with all applicable federal, state, local and foreign statutes, rules, regulations and administrative procedures; and

■

identify, report and correct any detected deviations from applicable federal, state, local and foreign statutes, rules, regulations and administrative procedures.

13.	Administration and Violations of the Code of Business Conduct and Ethics

This Code shall be administered and monitored by the Company’s Compliance Officer, who shall be appointed by the Audit Committee. The Compliance Officer will handle the Company’s day-to-day compliance matters, including:

■

Receiving, reviewing, investigating and resolving concerns and reports on the matters described in the Code;

■

Interpreting and providing guidance on the meaning and application of the Code; and

■

Reporting periodically and as matters arise (if deemed necessary by the Compliance Officer) to management and the Audit Committee on the implementation and effectiveness of the Code and other compliance matters and recommending any updates or amendments to the Code that he deems necessary.

Any questions and further information on this Code should be directed to the Compliance Officer. The Compliance Officer may seek the advice of the Audit Committee.

Covered Persons are expected to follow this Code at all times. Generally, waivers of this Code will be granted only in exceptional circumstances. Any Covered Person who believes that a waiver may be called for should discuss the matter with the Company’s Compliance Officer. For members of the Board of Directors and the Company’s executive officers, the Board of Directors or the Audit Committee shall have the sole and absolute discretionary authority to approve any deviation or waiver from this Code. Any such waiver from this Code applicable to or directed at the members of the Board of Directors and executive officers shall be disclosed to stockholders as required by the rules promulgated by the SEC under the Securities Exchange Act of 1934 and other applicable law.

14.	Public Company Reporting

The Company is committed to full, fair, accurate, timely and understandable disclosure in reports and documents that it files with, or submits to, the SEC and in other public communications made by the Company. In support of this commitment, the Company, among other measures, (i) has designed and implemented disclosure controls and procedures (within the meaning of applicable SEC rules), (ii) requires the maintenance of accurate and complete records, (iii) prohibits the recording of false, misleading or artificial entries on its books and records, and (iv) requires the full and complete documentation and recording of transactions in the Company’s accounting records. In addition to performing their duties and responsibilities under these requirements, all employees involved in the Company’s SEC reporting process, including each of the Senior Executive and Financial Officers, will establish and manage the Company’s reporting systems and procedures with due care and diligence to ensure that:

■

reports filed with or submitted to the SEC and other public communications contain information that is full, fair, accurate, timely and understandable and do not misrepresent or omit material facts;

■

business transactions are properly authorized and completely and accurately recorded in all material respects on the Company’s books and records in accordance with generally accepted accounting principles and the Company’s established financial policies; and

■

retention or disposal of Company records is in accordance with applicable legal and regulatory requirements.

15.	Use of Technology and Software

Company and third party technology and software may be distributed and disclosed only to persons authorized to use such technology or software. Company and third party technology and software may not be copied without specific authorization and may only be used to perform assigned responsibilities.

All third party technology and software must be properly licensed. The license agreements for such third party technology and software may place various restrictions on the disclosure, use and copying of such technology and software.

16.	Equal Employment Opportunity and Harassment

The Company’s focus in personnel decisions is on merit and contribution to the Company’s success. The Company affords equal employment opportunity to all qualified persons without regard to any impermissible criterion or circumstance. This means equal opportunity in regard to each individual’s terms and conditions of employment and in regard to any other matter that affects in any way the working environment of the employee. We do not tolerate or condone any type of discrimination prohibited by law, including harassment.

17.	Gifts and Entertainment To and From Non-Government Persons

All Covered Persons should understand the legal and ethical issues associated with gifts and entertainment and how they can affect our relationships and reputation with our customers and the general public. The decision to offer or to accept gifts or entertainment should be made only in compliance with legal requirements and ethical considerations, and with the involvement of the Compliance Officer if unsure of the appropriate course. A Covered Person may receive from or give to a person (other than those persons described under Section 18 “Prohibition of Bribery / Gifts to Government Officials” below) a gift, meal, or entertainment if all of the following are met:

■

it is consistent with acceptable business practices;

■

the gift could not be perceived as a bribe, does not make the recipient feel obligated, and does not make it difficult for the recipient to make a fair decision; and

■

public disclosure of the gift or entertainment would not embarrass the Company.

The following are unacceptable:

■

Cash;

■

Gifts that are solicited or encouraged by you;

■

Gifts and entertainment that are so extensive or frequent as to raise questions of propriety; and

■

Travel, entertainment or other events from any company or individual with which the Company has current or prospective business dealings, unless the event is a business- related event, appropriate as to time and place, attended by both the giver and recipient, and not so frequent as to raise any questions of impropriety.

If you receive a gift that is not deemed acceptable, you should inform the Compliance Officer of the existence of the gift and a determination will be made as to how the gift should be handled.

18.	Prohibition of Bribery/Gifts to Government Officials

You should not directly or indirectly give, offer or promise any form of bribe, gratuity or kickback to a United States public official or employee, any person who has been selected to be a public official, or any state, local or municipal official or employee or any official or employee of any governmental agency. It is the Company’s policy that no Covered Person may directly or indirectly pay, promise to pay, give or offer money, or anything of value, to any public official, any person who has been selected to be a public official, any government employee or representative, or to any political party, or candidate for, or incumbent in any political office, in order to assist in obtaining, retaining or directing business.

Anyone who corruptly gives or promises a public official anything of value in order to influence an official act is liable for bribery and may face criminal penalties and fines.

The Company’s policies, procedures and practices are designed to prevent even the appearance of influence. Even when there is no intention to influence, violations may occur. An unintentional violation can be deemed an offense of illegal gratuity, which can also result in criminal penalties and fines. Situations where an unintentional violation could occur include, but are not limited to, providing items such as free attendance at seminars, social networking events, meals and promotional items to potential customers, which may include government workers.

As a general rule, business courtesies such as gifts, entertainment, services or favors should not be offered to any actual or potential government customer or representative. Business meals are allowed to occur; however, the Company should generally not pay for any meals for an actual or potential customer who is a governmental official.

19.	Amendments

The Board of Directors will periodically assess this Code and approve amendments to the Code.

20.	No Rights Created

This Code is a statement of fundamental principles, policies and procedures that govern Covered Persons in the conduct of Company business. It is not intended to and does not create any legal rights for any customer, competitor, stockholder or any other non-employee or entity.

EXHIBIT A

BROADMARK REALTY CAPITAL INC.

CODE OF BUSINESS CONDUCT AND ETHICS ACKNOWLEDGMENT

I hereby acknowledge that I have received, read, understand and will comply with the Broadmark Realty Capital Inc. Code of Business Conduct and Ethics.

I understand that I may, at any time, seek guidance from my supervisor, senior management, or Broadmark Realty Capital Inc.’s Compliance Officer about any questions I have about the Code, and that I am expected to report actual or suspected violations of the Code, including any violation of the laws, rules, regulations or policies that apply to the Company.

I understand that my agreement to comply with the Code of Business Conduct and Ethics does not constitute a contract of employment.

Please sign here:

Print Name:

Date:

This signed and completed form must be returned to Broadmark Realty Capital Inc.’s Compliance Officer within ten (10) business days of receiving this Code.

Exhibit 16.1

November 20, 2019

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Ladies and Gentlemen:

We have read Item 4.01 (which incorporates Item 2.01) of Form 8-K dated November 20, 2019, of Broadmark Realty Capital Inc. and are in agreement with the statements contained in the first paragraph under Changes in and Disagreements with Accountants on Accounting and Financial Disclosure on page twelve therein. We have no basis to agree or disagree with other statements of the registrant contained therein.

/s/ Ernst & Young LLP

Exhibit 16.2

November 19, 2019

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Commissioners:

We have read the statements made by Broadmark Realty Capital, Inc. (copy attached), which we understand will be filed with the Securities and Exchange Commission, pursuant to Item 4.01 of Form 8-K, as part of the Form 8-K of Broadmark Realty Capital, Inc. dated November 19, 2019.

We agree with the statements concerning our Firm in such Form 8-K.

Very truly yours,

/s/ CohnReznick LLP

Exhibit 99.1

TRINITY MERGER CORP. AND BROADMARK ANNOUNCE COMPLETION OF BUSINESS COMBINATION

- Combined Company Renamed Broadmark Realty Capital Inc. -

- Will Trade Under the Ticker “BRMK” on the NYSE -

Honolulu and Seattle, November 14, 2019—Trinity Merger Corp. (Nasdaq: TMCX, TMCXW, TMCXU) (“Trinity”) and the Broadmark real estate lending companies (“Broadmark”) today announced the completion of their previously announced business combination. In connection with the completion of the business combination, the combined company was renamed Broadmark Realty Capital Inc. (“Broadmark Realty”). Broadmark Realty’s common stock is expected to begin trading on the New York Stock Exchange on November 15, 2019 under the ticker symbol “BRMK”, and its warrants, exercisable for one-quarter of one share at an exercise price of $2.875 per one-quarter share ($11.50 per whole share), are expected to begin trading on that date on the NYSE Amex under the ticker symbol “BRMK WS”. Broadmark Realty is an internally managed real estate investment trust (REIT) specializing in short-term financing for the acquisition, renovation and development of residential and commercial properties. In light of the closing of the business combination, Trinity has cancelled the special meeting of Trinity’s stockholders that had been previously scheduled for November 15, 2019 to vote on an amendment to its certificate of incorporation to extend the deadline to complete Trinity’s initial business combination.

Sean Hehir, Chief Executive Officer of Trinity, stated, “When we launched this endeavor, we recognized Broadmark’s established platform, highly skilled management team, and proven record as an ideal complement to our deep real estate industry knowledge and experience, and our access to the capital markets.”

Steve Haggerty, a Managing Partner of Trinity Investments, an affiliate of the sponsor of Trinity, and a director of Broadmark Realty added, “We could not be more pleased with the business combination between Trinity and Broadmark. As a mortgage REIT with a special focus on an underserved segment of real estate lending and with a unique combination of internal management and zero outstanding debt at closing, we believe Broadmark Realty is positioned to capitalize on the growth opportunity in the current environment, and into the future.”

Jeff Pyatt, Chief Executive Officer of Broadmark Realty, commented: “We have spent many years growing the Broadmark platform into a lender of choice in commercial real estate financing by originating short term, first deed of trust mortgages with conservative loan-to-value collateral support. With the support of Trinity’s experienced leadership team and our new independent board members, we plan to continue executing on our proven strategy, supported by our extensive borrower network and prudent underwriting standards.”

Joe Schocken, Chairman of the Board of Directors of Broadmark Realty, added: “With a deep debt of gratitude to the investors that got us here, we are thrilled to begin this next chapter in Broadmark’s growth and welcome our new partners and investors. As a publicly traded company, we see even greater potential to grow and scale Broadmark Realty, beyond what we have successfully built over the last nine years. Our record of paying a monthly dividend dates back to 2010 and we look forward to continuing to finance quality borrowers in the specialized real estate lending market and to create value for all our stakeholders.”

Broadmark Realty intends to declare a dividend prior to year-end, subject to board approval.

B. Riley FBR, Inc. served as capital markets advisor and private placement agent to Trinity, Gibson, Dunn & Crutcher LLP acted as Trinity’s legal advisor, and Raymond James & Associates, Inc. acted as Trinity’s financial advisor. Bryan Cave Leighton Paisner LLP served as legal advisor to Broadmark and CS Capital Advisors, LLC acted as financial advisor to Broadmark.

About Broadmark Realty Capital Inc.

Based in Seattle, Washington, and operating in multiple regions throughout the United States, Broadmark Realty is an internally managed real estate investment trust (REIT) specializing in short-term, first deed of trust loans secured by real estate to fund the acquisition, renovation, rehabilitation and development of residential and commercial properties. Since 2010 through June 30, 2019, Broadmark Realty and its predecessors have originated and serviced over 1,000 loans with an aggregate face amount of approximately $2.0 billion. As of June 30, 2019, the total portfolio of active loans comprised approximately $1.1 billion of principal commitments outstanding across 264 loans to over 200 borrowers in ten states plus the District of Columbia, of which approximately $0.7 billion was funded.

About Trinity Merger Corp.

Trinity Merger Corp. was a special purpose acquisition company formed by HN Investors LLC, an affiliate of Trinity Real Estate Investments LLC, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

Forward Looking Statements

Certain statements made herein are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “may”, “should”, “would”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “seem”, “seek”, “continue”, “future”, “will”, “expect”, “outlook” or other similar words, phrases or expressions. These forward-looking statements include statements regarding Broadmark Realty’s industry, future events, the benefits of the business combination, including future opportunities for Broadmark Realty, and other statements that are not historical facts.

These statements are based on the current expectations of each of Trinity’s and Broadmark Realty’s management and are not predictions of actual performance. These statements are subject to a number of risks and uncertainties regarding Broadmark Realty’s business, and actual results may differ materially. These risks and uncertainties include, but are not limited to, changes in the business environments in which Broadmark Realty operates, including inflation and interest rates, and general financial, economic, regulatory and political conditions affecting Broadmark Realty’s industry; changes in taxes, governmental laws, and regulations; competitive product and pricing activity; difficulties of managing growth profitably; the loss of one or more members of Broadmark Realty’s management team; failure of Broadmark Realty to qualify as a REIT; failure of Broadmark Realty to maintain the listing of its securities on the NYSE; failure to realize the anticipated benefits of the transaction; uncertainty as to the long-term value of Broadmark Realty’s common stock; and those discussed under the heading “Risk Factors” in the joint proxy statement/prospectus relating to the business combination filed by Broadmark Realty with the Securities Exchange Commission (the “SEC”), as may be updated from time to time by Broadmark Realty’s filings with the SEC. There may be additional risks that Trinity and Broadmark presently do not know or that Trinity and Broadmark currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements provide Trinity’s and Broadmark’s expectations, plans or forecasts of future events and views regarding Broadmark Realty’s business as of the date of this communication. Trinity and Broadmark Realty anticipate that subsequent events and developments will cause such parties’ assessments to change. However, while Trinity and Broadmark Realty may elect to update these forward-looking statements at some point in the future, both Trinity and Broadmark Realty specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing Trinity’s and Broadmark Realty’s assessments as of any date subsequent to the date of this communication.

In addition, actual results are subject to other risks and uncertainties that relate more broadly to Broadmark Realty’s overall business, including those more fully described in Trinity’s and Broadmark Realty’s filings with the SEC, including, without limitation, the joint proxy statement/prospectus. Forward-looking statements are not guarantees of performance, and speak only as of the date made, and none of Trinity or Broadmark Realty or their respective management undertake any obligation to update or revise any forward-looking statements except as required by law.

Contact:

Broadmark Realty Capital

Investor Relations

InvestorRelations@broadmark.com

206-623-7782

Exhibit 99.2

INDEX TO FINANCIAL STATEMENTS

Trinity Merger Corp.
For the Nine Months Ended September 30, 2019
Condensed Consolidated Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018	F-1
Condensed Consolidated Statements of Operations for nine months ended September 30, 2019 (unaudited) and the Period from January 24, 2018 (inception) to September 30, 2018 (unaudited)	F-2
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the nine months ended September 30, 2019 (unaudited) and the Period from January 24, 2018 (inception) to September 30, 2018 (unaudited)	F-3
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 (unaudited) and the Period from January 24, 2018 (inception) to September 30, 2018 (unaudited)	F-4
Notes to Unaudited Condensed Consolidated Financial Statements	F-5
PBRELF I, LLC and Subsidiaries
PBRELF I, LLC and Subsidiaries
Unaudited Interim Consolidated Financial Statements
Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018	F-17
Consolidated Statements of Income for the nine months ended September 30, 2019 and 2018	F-18
Consolidated Statements of Changes in Members’ Equity for the nine months ended September 30, 2019 and 2018	F-19
Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018	F-20
Notes to Consolidated Financial Statements	F-21
BRELF II, LLC and Subsidiaries
BRELF II, LLC and Subsidiaries
Unaudited Interim Consolidated Financial Statements
Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018	F-32
Consolidated Statements of Income for the nine months ended September 30, 2019 and 2018	F-33
Consolidated Statements of Changes in Members’ Equity for the nine months ended September 30, 2019 and 2018	F-34
Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018	F-35
Notes to Consolidated Financial Statements	F-36
BRELF III, LLC
BRELF III, LLC
Unaudited Interim Financial Statements
Balance Sheets as of September 30, 2019 and December 31, 2018	F-44
Statements of Income for the nine months ended September 30, 2019 and January 24, 2018 (date of inception) through December 31, 2018	F-45
Statements of Changes in Members’ Equity for the nine months ended September 30, 2019 and January 24, 2018 (date of inception) through December 31, 2018	F-46
Statements of Cash Flows for the nine months ended September 30, 2019 and January 24, 2018 (date of inception) through December 31, 2018	F-47
Notes to Financial Statements	F-48
BRELF IV, LLC and Subsidiaries
BRELF IV, LLC and Subsidiaries
Unaudited Interim Financial Statements
Balance Sheets as of September 30, 2019	F-55
Statements of Income for the period February 28, 2019 (date of inception) through September 30, 2019	F-56
Statements of Changes in Members’ Equity for the period February 28, 2019 (date of inception) through September 30, 2019	F-57
Statements of Cash Flows for the period February 28, 2019 (date of inception) through September 30, 2019	F-58
Notes to Financial Statements	F-59
Pyatt Broadmark Management, LLC
Pyatt Broadmark Management, LLC
Unaudited Interim Financial Statements
Statements of Assets, Liabilities and Members’ Equity as of September 30, 2019 and December 31, 2018	F-66
Statements of Income for the nine months ended September 30, 2019 and 2018	F-67
Statements of Changes in Members’ Equity for the nine months ended September 30, 2018 and 2018	F-68
Statements of Cash Flows for the nine months ended September 30, 2019 and 2018	F-69
Notes to Financial Statements	F-70

F-i

Broadmark Real Estate Management II, LLC
Unaudited Interim Financial Statements
Statements of Assets, Liabilities and Members’ Equity as of September 30, 2019 and December 31, 2018	F-73
Statements of Income for the nine months ended September 30, 2019 and 2018	F-74
Statements of Change in Members’ Equity for the nine months ended September 30, 2019 and 2018	F-75
Statements of Cash Flows for the nine months ended September 30, 2019 and 2018	F-76
Notes to Financial Statements	F-77
Broadmark Real Estate Management III, LLC
Unaudited Interim Financial Statements
Statements of Assets, Liabilities and Members’ Equity As of September 30, 2019 and December 31, 2018	F-80
Statements of Operations For the nine months ended September 30, 2019 and 2018	F-81
Statements of Changes in Members’ Equity For the six months ended September 30, 2019 and 2018	F-82
Statements of Cash Flows For the six months ended September 30, 2019 and 2018	F-83
Notes to Financial Statements	F-84
Broadmark Real Estate Management IV, LLC
Unaudited Financial Statements
Statements of Assets, Liabilities and Members’ Deficit As of September 30, 2019 and December 31, 2018	F-87
Statements of Operations for the period January 1, 2019 (date of inception) through September 30, 2019	F-88
Statement of Changes in Members’ Deficit for the period January 1, 2019 (date of inception) through September 30, 2019	F-89
Statements of Cash Flows for the period January 1, 2019 (date of inception) through September 30, 2019	F-90
Notes to Financial Statements	F-91

F-ii

TRINITY MERGER CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2019		December 31, 2018
	(unaudited)		(audited)
Assets
Current Assets
Cash	$	148,499	$	650,629
Prepaid expenses		74,094		47,730
Cash and marketable securities held in Trust Account		360,197,326		—
Total Current Assets		360,419,919		698,359

Cash and marketable securities held in Trust Account		—		355,633,275
Total Assets	$	360,419,919	$	356,331,634

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable and accrued expenses	$	3,496,840	$	130,814
Income taxes payable		5,146		36,021
Promissory note – related party		1,000,000		—
Total Current Liabilities		4,501,986		166,835

Deferred underwriting fee payable		15,525,000		15,525,000
Total Liabilities		20,026,986		15,691,835

Commitments

Common stock subject to possible redemption, 32,131,082 and 32,572,779 shares at redemption value at September 30, 2019 and December 31, 2018, respectively		335,392,928		335,639,798

Stockholders’ Equity:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding		—		—
Class A common stock, $0.0001 par value; 400,000,000 shares authorized; 2,368,918 and 1,927,221 issued and outstanding (excluding 32,131,082 and 32,572,779 shares subject to possible redemption) at September 30, 2019 and December 31, 2018, respectively		237		193
Class B common stock, $0.0001 par value; 50,000,000 shares authorized; 8,625,000 shares issued and outstanding at September 30, 2019 and December 31, 2018		863		863
Additional paid-in capital		2,100,741		1,853,915
Retained earnings		2,898,164		3,145,030
Total Stockholders’ Equity		5,000,005		5,000,001
Total Liabilities and Stockholders’ Equity	$	360,419,919	$	356,331,634

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

See Notes to Consolidated Financial Statements.

F-1

TRINITY MERGER CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Nine Months Ended September 30,			For the Period from January 24, 2018 (inception) through September 30,
	2019			2018

Formation and operating costs	$	5,050,505		$	406,603
Loss from operations		(5,050,505	)		(406,603	)

Other income:
Interest income on marketable securities held in Trust Account		6,119,764			2,596,644

(Loss) income before provision for income taxes		1,069,259			2,190,041
Provision for income taxes		(1,316,125	)		(524,295	)
Net (loss) income	$	(246,866	)	$	1,665,746

Weighted average shares outstanding of Class A common stock		34,500,000			34,500,000
Basic and diluted net income per share, Class A	$	0.13		$	0.07

Weighted average shares outstanding of Class B common stock		8,625,000			8,625,000
Basic and diluted net loss per share, Class B	$	(0.56	)	$	(0.10	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

See Notes to Consolidated Financial Statements.

F-2

TRINITY MERGER CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

	Class A Common Stock						Class B Common Stock				Additional Paid-in Capital			Retaine Earnings/ (Accumulated Deficit)			Total Stockholders’ Equity
	Shares			Amount			Shares		Amount
Balance – January 24, 2018 (inception)		—		$	—			—	$	—	$	—		$	—		$	—

Class B common stock issued to Sponsor		—			—			8,625,000		863		24,137			—			25,000

Net loss		—			—			—		—		—			(814	)		(814	)
Balance – March 31, 2018 (unaudited)		—			—			8,625,000		863		24,137			(814	)		24,186

Sale of 34,500,000 Units, net of underwriting discounts and offering expenses		34,500,000			3,450			—		—		325,116,319			—			325,119,769

Sale of 12,350,000 Private Placement Warrants		—			—			—		—		12,350,000			—			12,350,000

Common stock subject to redemption		(32,587,602	)		(3,259	)		—		—		(332,931,834	)		—			(332,935,093	)

Net income		—			—			—		—		—			441,139			441,139
Balance – June 30, 2018 (unaudited)		1,912,398			191			8,625,000		863		4,558,622			440,325			5,000,001

Change in value of common stock subject to possible redemption		6,974			1			—		—		(1,225,422	)		—			(1,225,421	)

Net income		—			—			—		—		—			1,225,421			1,225,421
Balance – September 30, 2018 (unaudited)		1,919,372		$	192			8,625,000	$	863	$	3,333,200		$	1,665,746		$	5,000,001

	Class A Common Stock				Class B Common Stock				Additional Paid-in Capital			Retained Earnings			Total Stockholders’ Equity
	Shares		Amount		Shares		Amount
Balance – January 1, 2019		1,927,221	$	193		8,625,000	$	863	$	1,853,915		$	3,145,030		$	5,000,001

Change in value of common stock subject to possible redemption		18,983		2		—		—		(1,358,659	)		—			(1,358,657	)

Net income		—		—		—		—		—			1,358,657			1,358,657
Balance – March 31, 2019 (unaudited)		1,946,204		195		8,625,000		863		495,256			4,503,687			5,000,001

Change in value of common stock subject to possible redemption		135,944		13		—		—		(41,227	)		—			(41,214	)

Net income		—		—		—		—		—			41,214			41,214
Balance – June 30, 2019 (unaudited)		2,082,148		208		8,625,000		863		454,029			4,544,901			5,000,001

Change in value of common stock subject to possible redemption		286,770		29		—		—		1,646,712			—			1,646,741

Net loss		—		—		—		—		—			(1,646,737	)		(1,646,737	)
Balance – September 30, 2019 (unaudited)		2,368,918	$	237		8,625,000	$	863	$	2,100,741		$	2,898,164		$	5,000,005

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

See Notes to Consolidated Financial Statements.

F-3

TRINITY MERGER CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30, 2019			For the Period from January 24, 2018 (inception) Through September 30, 2018

Cash Flows from Operating Activities:
Net (loss) income	$	(246,866	)	$	1,665,746
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Interest earned on marketable securities held in Trust Account		(6,119,764	)		(2,596,644	)
Changes in operating assets and liabilities:
Income tax receivable		—			(25,705	)
Prepaid expenses		(26,364	)		(66,169	)
Accounts payable and accrued expenses		3,366,026			156,465
Income taxes payable		(30,875	)		—
Net cash used in operating activities		(3,057,843	)		(866,307	)

Cash Flow from Investing Activities:
Investment of cash in Trust Account		—			(351,900,000	)
Cash withdrawn from Trust Account		1,555,713			550,250
Net cash provided by (used in) investing activities		1,555,713			(351,349,750	)

Cash Flows from Financing Activities:
Proceeds from issuance of Class B common stock to Sponsor		—			25,000
Proceeds from sale of Units, net of underwriting discounts paid		—			341,550,000
Proceeds from sale of Private Placement Warrants		—			12,350,000
Proceeds from promissory note - related party		1,000,000			213,000
Repayment of promissory note - related party		—			(213,000	)
Payment of offering costs		—			(905,231	)
Net cash provided by financing activities		1,000,000			353,019,769

Net Change in Cash		(502,130	)		803,712
Cash - Beginning of the period		650,629			—
Cash - End of the period	$	148,499		$	803,712

Supplemental cash flow information:
Cash paid for income taxes	$	1,347,000		$	550,250

Supplemental disclosure of non-cash investing and financing activities:
Initial classification of common stock subject to possible redemption	$	—		$	332,485,331
Change in value of common stock subject to possible redemption	$	(246,870	)	$	1,675,183
Deferred underwriting fee charged to additional paid in capital	$	—		$	15,525,000

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

See Notes to Consolidated Financial Statements.

F-4

TRINITY MERGER CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)

Note 1 – Description of Organization and Business Operations

Trinity Merger Corp. (the “Company”) is a blank check company incorporated in Delaware on January 24, 2018. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”). Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company is focusing its search on acquiring an operating company or business with a real estate component (such as a business within the hospitality, lodging, gaming, real estate or property services, or asset management industries). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

The Company’s subsidiaries are comprised of Trinity Sub Inc., a Maryland corporation and wholly-owned subsidiary of the Company (“PubCo”), Trinity Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of PubCo (“Merger Sub I”) and Trinity Merger Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of PubCo (“Merger Sub II”).

On January 26, 2018, the Company received an initial capital contribution (see Note 5) and entered into a promissory note agreement (see Note 5) with HN Investors LLC, a Delaware limited liability company (the “Sponsor”). On May 17, 2018, the Company closed its initial public offering (“Initial Public Offering”) with the sale of 34,500,000 units (each a “Unit” and collectively the “Units”), generating gross proceeds of $345,000,000, as described in Note 4. All activity through September 30, 2019 relates to the Company’s formation, its Initial Public Offering and identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on marketable securities from the proceeds derived from the Initial Public Offering.

On August 9, 2019, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) to effect a business combination with PubCo, Merger Sub I and Merger Sub II; PBRELF I, LLC, BRELF II, LLC, BRELF III, LLC and BRELF IV, LLC, each a Washington limited liability company (collectively, the “Broadmark Companies”); and Pyatt Broadmark Management, LLC, Broadmark Real Estate Management II, LLC, Broadmark Real Estate Management III, LLC and Broadmark Real Estate Management IV, LLC, each a Washington limited liability company (collectively, the “Management Companies” and, together with the Broadmark Companies, the “Broadmark Group”) (see Note 6).

The Company has until November 17, 2019 (or December 17, 2019, if the Extension (as defined below) is approved and becomes effective) to consummate a Business Combination (see Note 9).

Note 2 – Liquidity and Going Concern

As of September 30, 2019, the Company had $148,499 in its operating bank accounts, $360,197,326 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and a working capital deficit of $4,279,393. As of September 30, 2019, approximately $8,297,000 of the amount on deposit in the Trust Account represented interest income, which is available to pay the Company’s tax obligations.

Until the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination.

The Company will need to raise additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through the earlier of the consummation of a Business Combination or November 17, 2019 (or December 17, 2019, if the Extension (as defined below) is approved by the Company’s stockholders and becomes effective), the scheduled liquidation date (see Note 9). These condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

F-5

TRINITY MERGER CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)

Note 3 – Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the SEC on March 15, 2019, which contains the audited financial statements and notes thereto. The interim results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any future interim periods.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

F-6

TRINITY MERGER CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. At September 30, 2019, cash equivalents, comprised of U.S. Treasury Bills, amounted to $360,196,236. The Company did not have any cash equivalents as of December 31, 2018.

Cash and Marketable Securities Held in Trust Account

At September 30, 2019, assets held in the Trust Account were comprised of $1,090 in cash and $360,196,236 in U.S. Treasury Bills. At December 31, 2018, assets held in the Trust Account were comprised of $4,285 in cash and $355,628,990 in U.S. Treasury Bills. During the nine months ended September 30, 2019, we withdrew approximately $1,556,000 of interest income to pay for our franchise and income taxes.

Common Stock Subject to Possible Redemption

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. The common stock subject to possible redemption will be based on the requirement that the Company may not redeem publicly owned shares in an amount that would cause the Company’s net tangible assets be less than $5,000,001 upon consummation of a Business Combination (so that it is not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirements which may be contained in the agreement related to the Company’s Business Combination. Accordingly, at September 30, 2019 and December 31, 2018, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed consolidated balance sheet.

Offering Costs

Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs amounting to $19,880,231were charged to stockholders’ equity upon the completion of the Initial Public Offering.

Fair Value of Financial Instruments

Fair value is determined under the guidance of ASC 820, “Fair Value Measurements,” is a market-based measurement and is determined based on the assumptions that market participants would use in pricing an asset or liability. The GAAP valuation hierarchy is based upon the transparency of using observable inputs and unobservable inputs in order to value the assets and liabilities inputs as of the measurement date. The three levels are defined as follows:

Level 1:

Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:

Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3:

Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

F-7

TRINITY MERGER CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

Revenue Recognition

The Company recognizes interest income when earned, typically on a monthly basis. The interest income is reinvested in the Trust Account, less money released to the Company to pay its franchise and income taxes.

Income Taxes

The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. As of September 30, 2019 and December 31, 2018, the Company has a deferred tax asset of approximately $1,090,400 and $0, respectively, which had a full valuation allowance recorded against it of approximately $1,090,400 and $0, respectively.

The Company’s currently taxable income primarily consists of interest income on the Trust Account. The Company’s general and administrative costs are generally considered start-up costs and are not currently deductible. During the three and nine months ended September 30, 2019, the Company recorded income tax expense of $375,168 and $1,316,125, respectively, primarily related to interest income earned on the Trust Account. The Company’s effective tax rate for the three and nine months ended September 30, 2019 was approximately (29.5%) and 123.1%, which differs from the expected income tax rate due to the start-up costs (discussed above) which are not currently deductible.

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2019 and December 31, 2018. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The Company is subject to income tax examinations by major taxing authorities since inception.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times may exceed the Federal Depository Insurance Coverage of $250,000. As of September 30, 2019 and December 31, 2018, the Company had not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Net Income (Loss) per Common Share

Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 46,850,000 shares of Class A common stock in the calculation of diluted income (loss) per share, since the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.

F-8

TRINITY MERGER CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)

The Company’s condensed consolidated statement of operations includes a presentation of income (loss) per share for common shares subject to redemption in a manner similar to the two-class method of income per share. Net income per common share, basic and diluted for Class A common stock is calculated by dividing the interest income earned on the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A common stock outstanding for the period. Net loss per common share, basic and diluted for Class B common stock is calculated by dividing the net income (loss), less income attributable to Class A common stock, by the weighted average number of Class B common stock outstanding for the period.

Recent Accounting Pronouncements

The Company’s management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements.

Note 4 – Initial Public Offering

The registration statement for the Company’s Initial Public Offering was declared effective on May 14, 2018. On May 17, 2018, the Company closed its the Initial Public Offering of 34,500,000 Units, which included the full exercise by the underwriters of their over-allotment option in the amount of 4,500,000 Units, at $10.00 per Unit, generating gross proceeds of $345,000,000. Each Unit consists of one share of Class A common stock (the “Public Shares”) and one redeemable warrant (each a “Public Warrant”). Each Public Warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50 (see Note 7).

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 12,350,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Company’s Sponsor, generating total gross proceeds of $12,350,000 (see Note 5).

In connection with the closing of the Initial Public Offering on May 17, 2018, an amount of $351,900,000 ($10.20 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement Warrants was placed in a trust account (the “Trust Account”) which may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.

Offering costs amounted to $19,880,231, consisting of $3,450,000 of underwriting fees, $15,525,000 of deferred underwriting fees (see Note 6) and $905,231 of other costs.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the signing of an agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to complete a Business Combination successfully.

The Company will provide its holders of the Public Shares with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The holders of the Public Shares (the “public stockholders”) will be entitled to redeem their Public Shares for a pro rata portion of the amount then on deposit in the Trust Account. The per-share amount to be distributed to public stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter. There will be no redemption rights upon the completion of a Business Combination with respect to the warrants.

F-9

TRINITY MERGER CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)

The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the Public Shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem the Public Shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval in connection with a Business Combination, the initial stockholders (as defined below) have agreed to vote their Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. In addition, the initial stockholders have agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination.

Notwithstanding the foregoing, the Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 20% or more of the Class A common stock sold in the Initial Public Offering, without the prior consent of the Company.

The Company’s Sponsor, officers and directors (the “initial stockholders”) have agreed not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination by November 17, 2019 (the “Combination Period”), unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

The initial stockholders have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the initial stockholders should acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriter has agreed to waive its rights to its deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.20 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered (other than the independent public accountants) or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

F-10

TRINITY MERGER CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)

Note 5 – Related Party Transactions

Founder Shares

On January 26, 2018, the Sponsor purchased 8,625,000 shares (the “Founder Shares”) of the Company’s Class B common stock, par value $0.001 (“Class B common stock”) for an aggregate price of $25,000. The Founder Shares will automatically convert into shares of Class A common stock at the time of the Company’s initial Business Combination and are subject to certain transfer restrictions, as described in Note 7. The Founder Shares included an aggregate of up to 1,125,000 shares subject to forfeiture by the initial stockholders to the extent that the over-allotment option from the Initial Public Offering was not exercised in full by the underwriter so that the Founder Shares would represent 20% of the Company’s issued and outstanding shares after the Initial Public Offering. As a result of the underwriters’ election to exercise their over-allotment option in full, 1,125,000 Founder Shares are no longer subject to forfeiture.

The initial stockholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of an initial Business Combination or (B) subsequent to an initial Business Combination, (x) if the last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Private Placement Warrants

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 12,350,000 Private Placement Warrants at a price of $1.00 per warrant in a private placement to the Sponsor, generating gross proceeds of $12,350,000. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at an exercise price of $11.50. The proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. The Private Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

The Sponsor and the Company’s officers and directors have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the initial Business Combination.

Related Party Loans

On January 26, 2018, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). The Note was non-interest bearing and payable on the earlier of June 30, 2018 or the completion of the Initial Public Offering. The Company borrowed $213,000 under the Note, which was repaid at the closing of the Initial Public Offering on May 17, 2018.

In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.

F-11

TRINITY MERGER CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)

Promissory Note – Related Party

On August 9, 2019, the Company entered into a promissory note with the Sponsor for an aggregate principal amount of $1,000,000. Proceeds will be used to pay the Company’s Business Combination transaction expenses. The promissory note is payable at the earlier of the closing of a Business Combination and the liquidation of Company prior to the consummation of the Company’s initial Business Combination. At September 30, 2019, $1,000,000 was outstanding under the promissory note.

Administrative Support Agreement

The Company entered into an agreement whereby, commencing on May 14, 2018 through the earlier of the consummation of a Business Combination or the Company’s liquidation, the Company will pay the Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative support. For the three and nine months ended September 30, 2019, the Company incurred $30,000 and $90,000 of administrative service fees, respectively. For the three months ended September 30, 2018 and for the period from January 24, 2018 (inception) through September 30, 2018, the Company incurred $30,000 and $45,000 of administrative service fees. At September 30, 2019 and December 31, 2018, $5,000 of such fees is included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets.

Note 6 – Commitments and Contingencies

Registration Rights

Pursuant to a registration rights agreement entered into on May 14, 2018, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans, if any, are entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to shares of Class A common stock). These holders are entitled to certain demand and “piggyback” registration rights. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until the termination of the applicable lock-up period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriters Agreement

The underwriter was paid a cash underwriting discount of one percent (1.0%) of the gross proceeds of the Initial Public Offering, or $3,450,000. In addition, the underwriter is entitled to a deferred fee of four and one-half percent (4.5%) of the gross proceeds of the Initial Public Offering, or $15,525,000. The deferred fee will be paid in cash to the underwriter upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.

Merger Agreement

On August 9, 2019, the Company entered into the Merger Agreement to effect a business combination with PubCo, Merger Sub I and Merger Sub II, the Broadmark Companies and the Management Companies.

The Broadmark Group is a commercial real estate finance group based in Seattle, Washington. Its primary business is originating short-term, first deed of trust construction, land and development, or ‘‘CLD,’’ loans, which are loans secured by real estate to fund the construction and development of, or investment in, residential or commercial properties.

Upon the terms and subject to the conditions set forth in the Merger Agreement, the parties thereto intend to enter into a business combination pursuant to which (i) Merger Sub I will merge with and into the Company, with the Company being the surviving entity of such merger, (ii) immediately following such merger, each of the Broadmark Companies will merge with and into Merger Sub II, with Merger Sub II being the surviving entity of such merger, and (iii) immediately following such merger, each of the Management Companies will merge with and into the Company, with the Company being the surviving entity of such merger. As a result of the business combination, Merger Sub II and the Company will become wholly owned subsidiaries of PubCo.

F-12

TRINITY MERGER CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)

Upon consummation of the business combination, PubCo will be renamed Broadmark Realty Capital Inc. and will become a new publicly traded company. It is expected that Broadmark Realty Capital Inc., which as noted above will be incorporated in Maryland, will qualify as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended. In connection with the transaction, Broadmark Realty Capital Inc. intends to apply for registration of its securities on the New York Stock Exchange, Inc. under a new ticker symbol.

Each share of the Company’s common stock issued and outstanding immediately prior to the effective time of its merger with Merger Sub I will be cancelled and retired and automatically converted into the right to receive one share of common stock in the new public company, subject to adjustment for any stock split, reverse stock split, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change. Each issued and outstanding warrant of the Company (or portion thereof) immediately prior to the effective time of the Company’s merger with Merger Sub I will be modified to provide that such warrant (or portion thereof) will no longer entitle the holder thereof to purchase the referenced number of shares of Company Common Stock, and in substitution thereof, such warrant (or portion thereof) will entitle the holder thereof to acquire such equal number of shares of the new public company’s common stock.

Each preferred unit of the Broadmark Companies and each unit of the Management Companies issued and outstanding immediately prior to the effective time of the such entity’s merger with Merger Sub II or the Company, respectively, will be cancelled and retired and automatically converted into the right to receive a number of shares of the new public company’s common stock equal to the amount of consideration per such unit calculated per the terms of the Merger Agreement.

The parties to the Merger Agreement, HN Investors LLC, a Delaware limited liability company (the “Sponsor”), and, where applicable, their respective directors and members also entered into various other agreements to effect the business combination and provide a framework for the relationship between such parties leading up to and after the consummation of the business combination. These agreements include voting agreements pertaining to Company common stock and interests in the Management Companies; an agreement providing for the surrender of certain shares of Company common stock and rights by the Sponsor; employment agreements covering continued employment of certain Broadmark Group personnel at PubCo; equity lock-up agreements restricting equity sales by such parties; and agreements containing restrictive covenants on hiring and employee solicitation, competition, confidentiality, non-disparagement and use of certain of the Broadmark Group’s intellectual property.

Consummation of the transactions contemplated by the Merger Agreement is subject to customary conditions of the respective parties, and conditions customary to special purpose acquisition companies, including, among others: (i) approval of the Company’s stockholders; (ii) approval of the members of the Broadmark Group; (iii) there being no laws or injunctions by governmental authorities or other legal restraint prohibiting consummation of the transactions contemplated under the Merger Agreement; (iv) completion of the Company’s offer to redeem the shares of its public stockholders (the “Offer”) in accordance with the terms of the Merger Agreement, the organizational documents of the Company, the Trust Agreement, and the joint proxy and consent solicitation statement/prospectus; (v) the Company having at least $5,000,001 in net tangible assets; (vi) the new public company having at least $100 million in cash following the consummation of the transactions, completion of the Offer, and payment of expenses and indebtedness required to be paid at the closing of the transactions; (vii) consummation of the PIPE Investment (as discussed in further detail below); (viii) obtaining an amendment to the agreement governing the Company’s warrants to remove certain anti-dilution provisions contained therein relating to the payment of cash dividends; and (ix) the Company’s and PubCo’s receipt of certain tax opinions related to the transactions and REIT qualification.

More information about the Merger Agreement and the transactions contemplated thereby is included in the combined definitive joint proxy statement/prospectus that the Company and the Broadmark Companies filed with the Securities and Exchange Commission and dated October 18, 2019. The definitive joint proxy statement/prospectus contained the notice of special meeting of stockholders of the Company to vote on and adopt the Merger Agreement and the transactions contemplated thereby and to vote on certain related proposals. The special meeting is scheduled for November 12, 2019 (the “Special Meeting”). There is no guarantee that the Company will be able to hold the Special Meeting on November 12, 2019, or that the conditions to the closing of the transactions contemplated by the Merger Agreement will be satisfied prior to, or following such meeting (see Note 9).

Private Placement

On August 9, 2019, PubCo entered into a subscription agreement with entities affiliated with Farallon Capital Management LLC (the “PIPE Investors”), pursuant to which it will issue and sell to the PIPE Investors approximately $75.0 million of its common stock immediately prior to the consummation of the business combination (the “PIPE Investment”). The PIPE Investment is conditioned on the substantially concurrent closing of the mergers and a number of other closing conditions. The proceeds from the PIPE Investment will be used to pay transaction-related expenses and to help fund the ongoing business operations of PubCo. In addition, the PIPE Investors will have an option, exercisable at their election either in connection with or during the 365-day period following the consummation of the business combination to acquire up to an additional $25 million of common stock from PubCo. In connection the PIPE Investment, PubCo will issue to the PIPE Investors warrants in an amount equal to the number of shares of common stock of PubCo purchased by the PIPE Investors pursuant to their initial $75.0 million investment (such warrants to be on substantially the same terms as the warrants that will be held by public stockholders of PubCo upon consummation of the business combination).

F-13

TRINITY MERGER CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)

Note 7 – Stockholder’s Equity

Preferred Stock — The Company is authorized to issue 5,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, voting and other rights and preferences as may be determined from time to time by the Company’s Board of Directors. At September 30, 2019 and December 31, 2018, there were no shares of preferred stock issued or outstanding.

Common Stock

Class A Common Stock — The Company is authorized to issue 400,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of the Company’s Class A common stock are entitled to one vote for each share. At September 30, 2019 and December 31, 2018, there were 2,368,918 and 1,927,221 shares of common stock issued and outstanding, excluding 32,131,082 and 32,572,779 shares of common stock subject to possible redemption, respectively.

Class B Common Stock — The Company is authorized to issue 50,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of the Company’s Class B common stock are entitled to one vote for each share. At September 30, 2019 and December 31, 2018, there were 8,625,000 shares of common stock issued and outstanding.

Holders of Class A common stock and Class B common stock will vote together as a single class on all matters submitted to a vote of stockholders except as required by law or as otherwise provided in the Company’s Amended and Restated Certificate of Incorporation.

The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of an initial Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of an initial Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the initial Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination and any private placement-equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company). Holders of Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.

Warrants — The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its reasonable best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the Public Warrants. The Company will use its reasonable best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the foregoing, if a registration statement covering the shares of Class A common stock issuable upon exercise of the Public Warrants is not effective by the 60th business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

F-14

TRINITY MERGER CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)

The Company may redeem the Public Warrants:

•

in whole and not in part;

•

at a price of $0.01 per warrant;

•

at any time during the exercise period;

•

upon a minimum of 30 days’ prior written notice of redemption; and

•

if, and only if, the last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

Note 8 – Fair Value Measurements

The Company classifies its U. S. Treasury and equivalent securities as held-to-maturity in accordance with ASC 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost in the accompanying condensed consolidated balance sheets and adjusted for the amortization or accretion of premiums or discounts.

Cash held in the Trust Account amounted to $1,090 and $4,285 at September 30, 2019 and December 31, 2018, respectively.

The gross holding gains and fair value of held-to-maturity securities at September 30, 2019 and December 31, 2018 are as follows:

Held-To-Maturity	Amortized Cost		Gross Holding Gains		Fair Value
September 30, 2019
U.S. Treasury Securities (Mature on 10/22/2019)	$	360,196,236	$	24,135	$	360,220,371
Total	$	360,196,236	$	24,135	$	360,220,371

December 31, 2018
U.S. Treasury Securities (Mature on 2/14/2019)	$	177,713,107	$	2,169	$	177,715,276
U.S. Treasury Securities (Mature on 3/14/2019)		177,915,883		11,908		177,927,791
Total	$	355,628,990	$	14,077	$	355,643,067

The fair value of the Company’s held-to-maturity securities are based upon Level 1 observations as of September 30, 2019 and December 31, 2018.

F-15

TRINITY MERGER CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)

Note 9 – Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed consolidated financial statements were issued. Other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements.

The Company has until November 17, 2019 to consummate a Business Combination. The Company has scheduled the Special Meeting to approve the Business Combination for November 12, 2019, and is using its best efforts to complete the Business Combination on or prior to November 17, 2019. While the Company is seeking to complete the Business Combination on or prior to November 17, 2019, the Company has scheduled a special meeting of its stockholders for November 15, 2019, pursuant to which, in the event the Business Combination has not been completed prior to such time, it will seek stockholder approval to, among other matters, amend the Company’s Amended and Restated Certificate of Incorporation to extend the date by which the Company has to consummate a Business Combination from November 17, 2019 to December 17, 2019 (the “Extension”). There is no guarantee that the Company’s stockholders will vote to approve the Extension. The Company’s board of directors believes that it is in the best interests of its stockholders that, in the event the Business Combination is not completed prior to the time of the special meeting to vote on the Extension, the Extension be obtained so that the Company will have a limited additional amount of time to consummate the Business Combination. Without the Extension, if the Company, despite its best efforts, is not able to complete the Business Combination on or before November 17, 2019, the Company would be precluded from completing the transactions consummated by the Merger Agreement and would be forced to liquidate even if its stockholders are otherwise in favor of the Business Combination. More information about the Extension is included in the proxy statement that the Company filed with the Securities and Exchange Commission on November 1, 2019.

F-16

PBRELF I, LLC and Subsidiaries

Consolidated Balance Sheets (unaudited)

	As of September 30, 2019			As of December 31, 2018
Assets
Assets
Cash and cash equivalents	$	131,437,044		$	43,973,095
Mortgage notes receivable, net		325,212,511			303,992,370
Interest and fees receivable		1,854,432			791,576
Investment in real property, net		7,824,144			10,381,543
Other receivables and assets		1,853,286			1,588,810
Total assets	$	468,181,417		$	360,727,394
Liabilities and Members’ Equity
Liabilities
Accounts payable and accrued expenses	$	1,527,016		$	1,229,860
Dividends payable		3,470,004			3,229,864
Contributions received in advance		–			8,449,738
Total liabilities		4,997,020			12,909,462
Commitments and contingencies (Note 8)

Members’ equity
Preferred Units - Preferred units (voting) 4,661,674 and 3,475,717 units issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		466,886,618			348,727,085
Common units, $0 par value, 1 unit authorized; 1 unit issued and outstanding as of September 30, 2019 and December 31, 2018		–			–
Accumulated deficit		(3,702,221	)		(909,153	)
Members’ equity		463,184,397			347,817,932
Total liabilities and members’ equity	$	468,181,417		$	360,727,394

See Notes to Consolidated Financial Statements.

F-17

PBRELF I, LLC and Subsidiaries

Consolidated Statements of Income (unaudited)

	Nine months ended
	September 30, 2019		September 30, 2018
Revenue
Interest income	$	31,505,813	$	22,001,130
Fee income		2,887,053		2,652,217
Total revenue		34,392,866		24,653,347
Expense
Loan loss provision		2,943,777		407,155
Real estate properties, net of gains		346,673		–
Professional fees		257,662		147,381
Other		15,224		15,087
Excise taxes and licenses		231,868		66,457
Total expenses		3,795,204		636,080
Net income	$	30,597,662	$	24,017,267

See Notes to Consolidated Financial Statements.

F-18

PBRELF I, LLC and Subsidiaries

Consolidated Statement of Changes in Members’ Equity (unaudited)

For the six months ended September 30, 2019 and 2018

	Manager			Members			Total

Balance, January 1, 2018		–		$	231,489,370		$	231,489,370
Contributions
Cash					88,029,784			88,029,784
Reinvestments					7,882,706			7,882,706
Net income					24,017,267			24,017,267
Distributions		(2,355,366	)		(21,775,263	)		(24,130,629	)
Redemptions					(8,605,233	)		(8,605,233	)
Balance, September 30, 2018	$	(2,355,366	)	$	321,038,631		$	318,683,265

	Common Units				Preferred Units (voting)						Accumulated deficit			Total
	Units		Amount		Units			Amount

Balance, January 1, 2019		1	$	–		3,475,717		$	348,727,085		$	(909,153	)	$	347,817,932
Contributions
Cash						1,475,955			147,067,788			–			147,067,788
Reinvestments						111,270			11,083,525			–			11,083,525
Net income									–			30,597,662			30,597,662
Incentive fee allocation to manager									–			(3,099,704	)		(3,099,704	)
Distributions									–			(30,291,026	)		(30,291,026	)
Redemptions						(401,268	)		(39,991,780	)		–			(39,991,780	)
Balance, September 30, 2019		1	$	–		4,661,674		$	466,886,618		$	(3,702,221	)	$	463,184,397

See Notes to Consolidated Financial Statements.

F-19

PBRELF I, LLC and Subsidiaries

Consolidated Statement of Cash Flows (unaudited)

	Nine months ended
	September 30, 2019			September 30, 2018
Cash flows from operating Activities
Net Income	$	30,597,662		$	24,017,267
Adjustments to reconcile net income to net cash used in operations:
Provision of loan loss		2,943,777			325,699
Real estate properties, net of gains		346,674			–
Changes in operating assets and liabilities:
Interest and fees receivable		(1,062,856	)		(697,833	)
Other receivables and assets		(264,476	)		–
Accounts payable and accrued expenses		297,156			517,829
Net cash from operating activities		32,857,937			24,162,962
Cash flows from investing activities
Proceeds from sale of real estate owned		4,358,750			1,287,552
Capitalized costs of real estate property		(101,825	)		(1,444,299	)
Investments in mortgage notes receivable		(26,210,118	)		(73,386,677	)
Net cash used in investing activities		(21,953,193	)		(73,543,424	)
Cash flows from financing activities
Contributions		147,067,788			88,029,784
Contributions received in advance		(8,449,738	)		4,119,614
Dividends payable, net		240,140			372,082
Distributions		(22,307,205	)		(16,247,923	)
Redemptions		(39,991,780	)		(8,605,233	)
Net cash from financing activities		76,559,205			67,668,324
Net change in cash		87,463,949			18,287,862
Cash and cash equivalents, beginning of period		43,973,095			33,321,574
Cash and cash equivalents, end of period	$	131,437,044		$	51,609,436
Supplemental disclosure of non cash investing and financing activities
Reinvested distributions	$	11,083,525		$	7,882,706
Mortgage notes receivable converted to real estate property	$	2,046,200		$	5,440,182

See Notes to Consolidated Financial Statements.

F-20

PBRELF I, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

Note 1 - Organization and business

PBRELF I, LLC (the “Company”) is a Washington limited liability company formed on June 28, 2010. The Company operates under a Second Amended and Restated Limited Liability Company Agreement (the “Operating Agreement”) dated October 1, 2018. The Company will have perpetual existence unless terminated pursuant to the provisions of the Operating Agreement. Effective October 1, 2018, the Company elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.

Prior to the Operating Agreement dated October 1, 2018, the Company operated under the Amended and Restated Limited Liability Company Agreement dated February 13, 2013. The Company is a private real estate lending company that originates primarily commercial and single-family construction and land development mortgages secured by real estate. The primary purpose of the Company is to make short-term, first position construction and development loans secured by deeds of trust on real estate located exclusively in the Pacific Northwest.

The Company has an agreement with Pyatt Broadmark Management, LLC (the “Manager”) to manage the underwriting, closing, servicing, and disposition of mortgage notes, and perform all general and administrative duties. The Manager is the common unit holder and functions as managing member of the Company. The Company derives its revenue from loan origination fees, extension and late fees, and interest income related to mortgage notes underwritten by the Company or the Manager. Fee income is recognized as received, and consists of the Company’s 20% share of origination, renewal and late fees an all loans. The remaining 80% of these fees are paid directly to the Manager, who services the loans. Interest income is accrued and recognized as interest becomes due pursuant to the loan terms.

Note 2 - Summary of significant accounting policies

Basis of accounting

The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Prior to October 1, 2018, the Company met the definition of an investment company and applied the guidance related to “Financial Services - Investment Companies” as detailed in the Financial Accounting Standards Board’s Accounting Standards Codification Topic 946 (“ASC 946”). Effective with the REIT election on October 1, 2018, ASC 946 no longer applied to the Company. This change resulted in different presentations of the basic financial statements from the Company’s previously issued financial statements, as well as significant revisions of the financial statement disclosures in order to conform to GAAP. However, the change in the application of GAAP did not result in any changes to the

Company’s opening members’ equity as of January 1, 2018.

Principles of consolidation

The accompanying consolidated financial statements include the accounts of PBRELF I, LLC and its wholly-owned subsidiaries, Cataldo Square, LLC, PBRELF Peak, LLC, PBRELF Clearview Sheldon, LLC, PBRELF Petra LLC, and South Hill Meridian, LLC (the “Subsidiaries”). The Subsidiaries were formed to own and operate real estate acquired through foreclosure on non-performing first trust deed loans. All intercompany accounts, balances and transactions have been eliminated in consolidation.

Use of estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the fair value of investments, certain reported amounts and disclosures at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates.

F-21

PBRELF I, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

Subsequent events

The Company has evaluated subsequent events through the date the consolidated financial statements were issued.

Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company has a cash management sweep account repurchase agreement whereby its bank nightly sweeps cash in excess of $750,000, sells the Company specific U.S. Government Securities and then repurchases them the next day. The balance in the sweep account at September 30, 2019 and December 31, 2018, was $32,066,445 and $42,615,552, respectively.

Mortgage notes receivable

Mortgage notes receivable are held for investment purposes, anticipated to be held until maturity and are carried at cost, net of unfunded commitments and allowance for loan losses. Mortgage notes receivable that are deemed to be impaired are carried at amortized cost less a specific allowance for loan losses.

The mortgage notes are secured by first deeds of trust, security agreements or legal title to real estate located in the United States. The notes generally have terms ranging between 6 and 18 months and may be extended by paying additional fees.

Many construction loans provide for minimum interest provisions, under which the contractual rate applies to 70% of the face amount of the note until the actual outstanding principal exceeds the minimum threshold. Interest income on mortgage notes is accrued and included in operating income based on contractual rates applied to the principal balance outstanding, unless there is a minimum interest provision in the promissory note. Income recognition is suspended when a loan is designated non-performing and resumes only when the suspended loan becomes contractually current and performance is demonstrated to have resumed.

The Company collects loan origination fees in conjunction with origination. The Company does not defer origination fees or costs and, rather, records origination fees and costs at the time or origination due to the short-term nature of the loans. The difference is not significant at September 30, 2019 or December 31, 2018.

Loans Held for Investment

Loans held for investment are reported at the principal amount outstanding. Interest on performing loans is accrued and recognized as interest income at the contractual rate of interest, or at the contractual rate of monthly minimum interest. All loans are held for investment, and the intent is always to hold the loan to maturity. The Company rarely sells a note, and does not originate a note with the intent to sell the note.

Allowance for loan losses

The allowance for loan losses reflects management’s estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The allowance is increased or decreased through the loan loss provision or recovery on the Company’s consolidated statement of income, and is decreased by charge-offs when losses are confirmed through the receipt of assets, such as in a pre-foreclosure sale or upon ownership control of the underlying collateral in full satisfaction of the loan upon foreclosure or when significant collection efforts have ceased. The allowance for loan losses is determined on an asset-specific basis.

The asset-specific reserve relates to reserves for losses on individual impaired loans. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms if the loan agreement. This assessment is made on an individual basis month based on such factors as payment status, lien position, borrower financial resources and investment collateral, collateral type, project economics and geographical location as well as national and regional economic factors. A reserve is established for an impaired loan when the present value of payments expected to be received, observable market prices or the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) is lower than the carrying value of that loan.

F-22

PBRELF I, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

For collateral-dependent impaired loans, the company records an estimated allowance of 10% of the outstanding principal at the time the note is put into default. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. The Manager generally will obtain external “as is” appraisals for loan collateral to estimate the fair value of the collateral for such loans.

The Company designates non-performing loans at such time as (i) the borrower fails to make the required monthly interest-only loan payments; (ii) the loan has a maturity default; or (iii) in the opinion of the Manager, it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan. Loans are charged off to the allowance for loan losses when the contractual amount is no longer realizable.

Real estate properties

Investments in real estate properties consists of real estate acquired in settlement of loans. Real estate acquired through foreclosure is recorded at fair market value at the time of foreclosure, which generally approximates the carrying value of the loan secured by such property. All other real estate acquisitions are recorded at cost. All costs related to acquisition, development, construction and improvements, including repairs, maintenance and legal costs are capitalized and subsequently measured for impairment.

At September 30, 2019, investments in real properties consists of real estate acquired as a result of foreclosure proceedings on four non-performing loans.

During the nine months ended September 30, 2019 the Company took in one new property signed over via deed in lieu for $2,046,200, forgoing the foreclosure process. During the nine months ended September 30, 2018 the Company transferred through foreclosure $5,440,182 of real estate properties. During the nine months ended September 30, 2019 and 2018, the Company recorded additional capitalized costs of $101,826 and $1,444,299, respectively, related to properties previously obtained through foreclosure. During the nine months ended September 30, 2019 and 2018, aggregate proceeds from the sale of property and aggregate write-down, net of gains amounted to $4,358,750 and $1,287,775 and $346,674 and $0, respectively.

Income taxes

The Company operates and has elected to be taxed as a REIT commencing with its conversion to a REIT effective October 1, 2018 and for the taxable period from October 1, 2018 through December 31, 2018. Accordingly, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that the Company makes qualifying distributions to members, and provided that the Company satisfies, on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution and unit ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which the Company lost its REIT qualification. Accordingly, the failure to qualify as a REIT could have a material adverse impact on the Company’s results of operations and amounts available for distribution to members.

F-23

PBRELF I, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

As a REIT, if the Company fails to distribute in any calendar year (subject to specific timing rules for certain dividends paid in January) at least the sum of (i) 85% of its ordinary income for such year; (ii) 95% of its capital gain net income for such year; and (iii) any undistributed taxable income from the prior year, the Company would be subject to a non-deductible 4% excise tax on the excess of such required distribution over the sum of (x) the amounts actually distributed and (y) the amounts of income retained on which the Company has paid corporate income tax.

The dividend-paid deduction for qualifying dividends paid to members is computed using the Company’s taxable income as opposed to net income reported in the Consolidated Statement of Income. Taxable income, generally, will differ from income reported in the Consolidated Statement of Income because the determination of taxable income is based on tax regulations and GAAP.

For the period from January 1, 2019 through September 30, 2019, the Company was in compliance with all REIT qualification and distribution requirements.

The subsidiaries are limited liability companies and are classified as partnerships for income tax purposes. The Subsidiaries are considered disregarded entities for federal income tax purposes.

The Company has no unrecognized tax benefits at September 30, 2019. While no income tax returns are currently being examined by federal or state taxing authorities, tax years since 2014 for federal and 2013 for state remain open for examination. Management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.

The Company recognizes interest and penalties associated with tax matters, if applicable, as operating expenses and includes accrued interest and penalties with the related tax liability in the consolidated balance sheet.

Fair value measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Fair value is a market-based measurement that should be determined based on the assumptions market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). Valuation techniques used to measure fair value shall maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows:

•

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•

Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

•

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible while also considering counterparty credit risk in the assessment of fair value.

F-24

PBRELF I, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

Note 3 - Recent accounting pronouncements

In June 2016, FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), and in 2019 issued ASU 2019-04, which provides codification improvements, and ASU 2019-05, which provides targeted transition relief for entities adopting ASU 2016-13. The guidance replaces the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (CECL) model. In October 2019, the FASB confirmed that it will be moving forward with finalizing its proposal to defer the effective date for this guidance for smaller reporting companies from the interim and annual periods beginning after December 15, 2020 to the interim and annual periods beginning after December 15, 2022. For this effective date deferral to take effect, the FASB must issue the final ASU which the Company expects to be issued in mid-November. Early adoption is permitted for interim and annual periods beginning after December 15, 2018. Upon issuance of the final ASU, the Company plans to adopt this guidance on January 1, 2023. The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables and held-to maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in certain leases recognized by a lessor. In addition, the amendments in this Update require credit losses be presented as an allowance rather than as a write-down on available-for-sale debt securities. The Company has formed a CECL committee that is assessing data and system needs in order to evaluate the impact of adopting the new guidance. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective. At this time, the impact is being evaluated.

Note 4 - Concentrations of credit risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and mortgage notes receivable.

The Company maintains its cash and cash equivalents with high-credit quality financial institutions. At times, such amounts may exceed federally insured limits. At September 30, 2019 and December 31, 2018, the uninsured cash and cash equivalents balance was approximately $131,187,044 and $43,723,095, respectively.

The Company’s investments are in originating primarily short-term commercial and single-family construction and land development mortgage notes secured by first deeds of trust, mortgages or legal title in real property located in the Pacific Northwest. The investments are exposed to various risks, such as market or credit risks.

Note 5 - Mortgage notes receivable and allowance for loan losses

The stated principal amount of loans receivable in the Company’s portfolio represents the Company’s interest in loans secured primarily by first deeds of trust and is presented net of interest reserve and construction reserve holdbacks in the consolidated balance sheet

The interest reserve holdback represents funds withheld from the funding of certain mortgage notes receivable for the purpose of satisfying monthly interest payments over all or part of the term of the related note. Accrued interest is paid out of the interest reserve and recognized as interest income at the end of each month. The construction reserve holdback represents amounts withheld from the funding of construction loans until the Company’s management deems construction to be sufficiently completed.

F-25

PBRELF I, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

The Private Placement Memorandum (“PPM”) for the Company includes specific criteria for mortgages qualified to be investments of the Company, including that all notes be first position liens and that the maximum loan to value ratio be 65%, and prior to funding, all loan packages will include an appraisal by a third party qualified appraiser. The maximum amount of a single loan may not exceed 10% and the maximum amount to a single borrower may not exceed 15% of the total assets of the Company.

Mortgage notes receivable are recorded at their cost, which are approximate to their face amounts, and have interest rates that generally range from 10% to 13%.

A summary of information pertaining to mortgage notes receivable at September 30, 2019 and December 31, 2018:

	September 30, 2019		December 31, 2018

Total loan commitments	$	484,824,940	$	436,264,749
Less:
Construction holdbacks		146,430,586		117,762,595
Interest reserves		9,153,180		12,972,839
Allowance for loan losses		4,028,663		1,536,945

Total mortgage notes receivable	$	325,212,511	$	303,992,370

The Notes are considered to be short-term financings, with the expectation of repayment generally within 6 to 18 months. The Company generally “collects” a three to five percent origination fee at each initial loan closing for Notes with a 12-month term, and a one percent fee per two-month extension, of which the Company retains 20% and 80% is remitted to the Manager.

Defaulted notes

All loans require monthly interest only payments. Most loans are structured with an interest reserve holdback that covers the interest payments for most of the initial term of the loan. Once the interest reserve is depleted, borrowers are expected to make their monthly interest payment within 10 days of month end.

Loans can be placed in default status if an interest payment is more than 30 days past due; if a note matures and the borrower fails to extend; or if the collateral becomes impaired in such a way that the ultimate collection of the note is doubtful. A loan can be removed from default status if the late interest payments are brought current; if the borrower complies with appropriate re-underwriting to extend the note; or if additional collateral is provided for the note to provide cash flow or bring the loan to collateral value ratio below 65%.

Non-accrual on defaulted loans

No interest income is recorded on notes that are in default, unless the interest is paid. At September 30, 2019 and December 31, 2018 all defaulted and impaired loans were on nonaccrual status.

The composition of the loan portfolio is as follows as of the period indicated:

Total loans by segment	September 30, 2019		December 31, 2018

Current mortgage notes receivable	$	307,004,923	$	295,901,356
Defaulted and impaired loans		18,207,588		9,627,959
Total mortgage notes receivable	$	325,212,511	$	305,529,315

F-26

PBRELF I, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

The following tables summarize the allocation of the allowance for loan loss, as well as the activity in the allowance for loan loss attributed to various segments in the loan portfolio, as of and for the period indicated:

	Current mortgage notes receivable		Reserves on loans in default			Total Reserves
Beginning January 1, 2019	$	–	$	1,536,945		$	1,536,945
Provision for loan losses		–		2,943,777			2,943,777
Charge offs		–		(452,059	)		(452,059	)
Recoveries		–		–			–
Ending September 30, 2019	$	–	$	4,028,663		$	4,028,663

	Current mortgage notes receivable		Reserves on loans in default		Total Reserves
Beginning January 1, 2018	$	–	$	–	$	–
Provision for loan losses		–		325,699		325,699
Charge offs		–		–		–
Recoveries		–		12,511		12,511
Ending September 30, 2018	$	–	$	338,210	$	338,210

A summary of information pertaining to impaired loans at September 30, 2019:

		Recorded investments (Loan balance less charge- offs)				Unpaid principal balance				Related allowance				Average investment in impaired loans				Interest income recognized
With allowance recorded on impaired loans		$	18,207,588			$	18,207,588			$	4,028,663			$	15,027,084			$	–

A summary of information pertaining to impaired loans at December 31, 2018:

		Recorded investments (Loan balance less charge- offs)				Unpaid principal balance				Related allowance				Average investment in impaired loans				Interest income recognized
With allowance recorded on impaired loans		$	9,627,959			$	9,627,959			$	1,536,945			$	5,268,608			$	–

Note 6 - Members’ equity

The Manager is the sole common unit holder of the Company. Pursuant to the terms of the PPM, as amended on September 18, 2018, the Company can offer up to $500,000,000 of membership interests in the Company. Each dollar is considered equal to one preferred unit, with a minimum contribution amount of $100,000, subject to Manager discretion in accepting lesser amounts. Effective with the Company’s REIT election on October 1, 2018, preferred units were exchanged at a 1:100 ratio. After one year, preferred unit holders may request redemptions, subject to the Manager’s sole discretion to establish reserves and to determine cash available for redemptions. All redemption requests made in any calendar quarter are paid out on the first day of the subsequent quarter. The actual redemption amount will be equal to the unit value in effect at the time of the redemption payment, multiplied by the number of units redeemed by the member. No new mortgages will be funded until all outstanding redemption requests from the previous quarters are met, with the exception of draws on construction loans, which will be funded irrespective of outstanding redemption requests. The preferred unit holders have the right by simple majority vote to replace the Manager.

F-27

PBRELF I, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

Preferred unit holders are expected to receive a monthly preferred return, per preferred unit held, determined as of the date the distribution of the preferred return is declared. The preferred return is paid out of the fees and other income received. The preferred return in not guaranteed and is only paid monthly to the extent earned by the Company.

The Company makes distributions of available cash at the discretion of the Manager; however, generally the Company makes distributions of preferred return monthly within 15 days after the last day of the previous month. Distributions, when made, are made to and among the members and Manager as follows:

(a)

First, to and among all the members any Fee Based Income (defined as 20% of the loan fee income received from origination points, late fees and renewal fees);

(b)

Second, to and among the members, pro rata in accordance with their preferred units, the unpaid preferred return (for the current month if any, inclusive of the Fee Based Income) due to each member as of the date of distribution; and

(c)

Thereafter, after deducting expenses, the distribution is as follows:

(i)

Eighty percent (80%) to the members pro rata; and

(ii)

Twenty percent (20%) to the Manager.

Note 7 - Related party transactions

Certain members of the Company are considered related parties.

A summary of information pertaining to member related parties at September 30, 2019 and December 31, 2018:

	As of		As of
	September 30, 2019		December 31, 2018
Capital balances	$	2,240,960	$	18,813,083
Dividends payable		157,928		162,857

	Nine months ended
	September 30, 2019		September 30, 2018
Contributions, net	$	127,877	$	3,437,855
Redemptions		16,700,000		4,044,462
Income allocated		695,344		1,420,110

F-28

PBRELF I, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

Related parties include BRELF II, LLC, BRELF III, LLC, BRELF IV, LLC, the related respective management companies and Broadmark Capital, LLC. Amounts payable and receivable to these other related parties were immaterial at September 30, 2019 and December 31, 2018.

Note 8 - Commitments and contingencies

The Company’s commitments and contingencies include usual obligations incurred by real estate investment companies in the normal course of business. These include interest reserves and construction holdbacks as disclosed in Note 5. In the opinion of management, these matters will not have a material adverse effect on the Company’s financial position and results of operations.

Note 9 – Fair value measurements

Certain assets of the Company have been measured at fair value on a nonrecurring basis. There were no assets or liabilities measured on a recurring basis. As required by the accounting standard for fair value measurement and disclosures, assets and liabilities are classified in their entirety within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

The table below sets forth by level within the fair value hierarchy assets and liabilities measured and reported at fair value on a nonrecurring basis as of September 30, 2019:

	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant other unobservable inputs (Level 3)
Nonperforming mortgage notes receivable	$	–	$	–	$	18,207,588
Real estate property		–		–		7,824,144
Total	$	–	$	–	$	26,031,732

The table below sets forth by level within the fair value hierarchy assets and liabilities measured and reported at fair value on a nonrecurring basis as of December 31, 2018:

	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant other unobservable inputs (Level 3)
Nonperforming mortgage notes receivable	$	–	$	–	$	9,627,959
Real estate property		–		–		10,381,543
Total	$	–	$	–	$	20,009,502

F-29

PBRELF I, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

The following table presents additional information about valuation methodologies and inputs used for assets that are measured at fair value and categorized within Level 3 as of September 30, 2019:

Investments	Fair value at September 30, 2019		Valuation technique	Unobservable input	Range of inputs¹
Nonperforming mortgage notes receivable	$	18,207,588	Market comparable	Adjustment to appraisal value		0-10	%

Real estate property		7,824,144	Market comparable	Adjustment to appraisal value		0-10	%
Total	$	26,031,732

¹Discount for selling costs.

The following table presents additional information about valuation methodologies and inputs used for assets that are measured at fair value and categorized within Level 3 as of December 31, 2018:

Investments	Fair value at December 31, 2018		Valuation technique	Unobservable input	Range of inputs¹
Nonperforming mortgage notes receivable	$	9,627,959	Market comparable	Adjustment to appraisal value		0-10	%

Real estate property		10,381,543	Market comparable	Adjustment to appraisal value		0-10	%
Total	$	20,009,502

¹Discount for selling costs.

Fair value of financial instruments

For certain of the Company’s financial instruments, including cash equivalents, interest and fees receivable, other receivables, accounts payable, and accrued expenses, which are classified under Level 1 within the fair value hierarchy, the carrying amounts approximate fair value due to their short maturities.

For mortgage notes receivable, which are classified under Level 3 within the fair value hierarchy, fair values are based on discounted cash flows considering interest rate risk and creditworthiness of the borrower. In addition, the Company performs monthly credit reviews of the loan portfolio and considers current economic conditions, review of specific problem loans and other economic and industry factors, as well as the value of the underlying collateral, in determining fair value. The mortgage notes are secured by first deeds of trust, security agreements or legal title to real estate located in the United States. The notes generally have terms ranging between 6 and 18 months and may be extended by paying additional fees. Due to the short-term maturity of the notes, carrying value approximates fair value.

F-30

PBRELF I, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

Investments in real estate properties are carried at fair value under Level 3 within the fair value hierarchy. Properties owned are initially recorded at the sale price plus closing costs. Costs related to acquisition, development, construction and improvements are capitalized. At each reporting date, the fair value of real estate properties is based upon independent third-party appraisals of value.

Note 10 - Subsequent events

Subsequent to September 30, 2019, the Company placed one loan in default. The loan had a principal balance of $1,322,520. A loan loss reserve of $132,252 was recorded on October 31, 2019.

On August 9, 2019, the Company entered into a definitive agreement with Trinity Merger Corp. to effectuate a business combination transaction which will combine the Company, Manager, Broadmark Real Estate Management II, LLC, Broadmark Real Estate Management III, LLC, Broadmark Real Estate Management IV, LLC, BRELF II, LLC, BRELF III, LLC, and BRELF IV, LLC into a publicly-traded internally managed Mortgage REIT. The transaction received investor and regulatory approval and closed on November 14, 2019.

In accordance with quarterly redemption rights, holders of preferred units were permitted to request redemptions from available cash at the end of September 2019. The total amount of redemptions requested was approximately $43,500,000. Following payment of these redemptions and regular monthly distributions in early October 2019, the Fund's cash balance was reduced to approximately $81,000,000.

F-31

BRELF II, LLC and Subsidiaries

Consolidated Balance Sheets (unaudited)

	As of September 30, 2019			As of December 31, 2018
Assets
Cash and cash equivalents	$	60,727,816		$	62,851,974
Mortgage notes receivable, net		460,299,887			278,039,620
Interest and fees receivable		772,959			443,040
Investment in real property, net		–			1,709,729
Total assets	$	521,800,662		$	343,044,363
Liabilities and Members’ Equity
Liabilities
Accounts payable and accrued expenses	$	879,766		$	368,123
Dividends payable		4,618,082			3,000,497
Contributions received in advance		–			15,987,507
Total liabilities		5,497,848			19,356,127
Commitments and contingencies (Note 8)
Members’ equity
Preferred Units - Preferred units (voting) 4,428,575 and 3,237,478 units issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		516,340,207			324,035,624
Common units, $0 par value, 1 unit authorized; 1 unit issued and outstanding as of September 30, 2019 and December 31, 2018		–			–
Accumulated deficit		(37,393	)		(347,388	)
Members’ equity		516,302,814			323,688,236
Total liabilities and members’ equity	$	521,800,662		$	343,044,363

See Notes to Consolidated Financial Statements.

F-32

BRELF II, LLC and Subsidiaries

Unaudited Consolidated Statements of Income (unaudited)

	Nine months ended
	September 30, 2019			September 30, 2018
Revenue
Interest income	$	36,190,026		$	17,265,186
Fee income		3,203,760			2,649,000
Total revenue		39,393,786			19,914,186
Expense
Loan loss (reversal) provision		(167,583	)		353,968
Real estate properties, net of gains		(167,530	)		90,466
Professional fees		216,109			128,350
Other		28,184			21,958
Total expenses		(90,820	)		594,742
Net income	$	39,484,606		$	19,319,444

See Notes to Consolidated Financial Statements.

F-33

BRELF II, LLC and Subsidiaries

Consolidated Statement of Changes in Members’ Equity (unaudited)

For the nine months ended September 30, 2019 and 2018

	Manager			Members			Total
Balance, January 1, 2018		–		$	150,339,936		$	150,339,936
Contributions
Cash					127,759,462			127,759,462
Reinvestments					6,657,433			6,657,433
Net income					19,319,444			19,319,444
Distributions		(1,775,477	)		(17,642,402	)		(19,417,879	)
Redemptions					(3,647,693	)		(3,647,693	)
Balance, September 30, 2018	$	(1,775,477	)	$	282,786,180		$	281,010,703

	Common Units			Preferred Units (voting)						(Accumulated deficit) Retained earnings			Total
	Units	Amount		Units			Amount
Balance, January 1, 2019	1	$	–		3,237,478		$	324,035,624		$	(347,388	)	$	323,688,236
Contributions
Cash					1,180,845			194,433,778			–			194,433,778
Reinvestments					83,140			13,325,771			–			13,325,771
Net income								–			39,484,606			39,484,606
Incentive fee allocation to manager								–			(4,002,107	)		(4,002,107	)
Distributions								–			(35,172,504	)		(35,172,504	)
Redemptions					(72,889	)		(15,454,966	)		–			(15,454,966	)
Balance, September 30, 2019	1	$	–		4,428,575		$	516,340,207		$	(37,393	)	$	516,302,814

See Notes to Consolidated Financial Statements.

F-34

BRELF II, LLC and Subsidiaries

Consolidated Statement of Cash Flows (unaudited)

	Nine months ended
	September 30, 2019			September 30, 2018
Cash flows from operating Activities
Net Income	$	39,484,606		$	19,319,444
Adjustments to reconcile net income to net cash used in operations:
(Recovery) provision of loan loss		(167,530	)		353,968
Real estate properties, net of gains		(167,583	)		90,466
Changes in operating assets and liabilities:
Interest and fees receivable		(329,919	)		(143,934	)
Accounts payable and accrued expenses		511,643			257,755
Net cash from operating activities		39,331,217			19,877,699
Cash flows from investing activities
Proceeds from sale of real estate property		2,004,278			1,286,991
Capitalized costs of real estate property		(127,019	)		(65,893	)
Investments in mortgage notes receivable		(182,092,684	)		(126,051,101	)
Net cash used in investing activities		(180,215,425	)		(124,830,003	)
Cash flows from financing activities
Contributions		194,433,778			127,759,462
Contributions received in advance		(15,987,507	)		10,431,237
Dividends payable, net		1,617,585			1,249,140
Distributions		(25,848,840	)		(12,760,446	)
Redemptions		(15,454,966	)		(3,647,693	)
Net cash from financing activities		138,760,050			123,031,700
Net change in cash		(2,124,158	)		18,079,396
Cash and cash equivalents, beginning of period		62,851,974			31,897,657
Cash and cash equivalents, end of period	$	60,727,816		$	49,977,053
Supplemental disclosure of non cash investing and financing activities
Reinvested distributions	$	13,325,771		$	6,657,433

See Notes to Consolidated Financial Statements.

F-35

BRELF II, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

Note 1 - Organization and business

BRELF II, LLC (the “Company”) is a Washington limited liability company that operates under a Limited Liability Company Agreement (the “Operating Agreement”), dated October 1, 2018. The Company will have perpetual existence unless terminated pursuant to the provisions of the Operating Agreement. Effective October 1, 2018, the Company elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.

Prior to the Operating Agreement dated October 1, 2018, the Company operated under the Amended and Restated Limited Liability Company Agreement dated February 13, 2014. The Company is a private real estate lending company that originates mortgages secured by real estate. The primary purpose of the Company is to make short-term, first position loans secured by deeds of trust on real estate located in Colorado, Texas, and Utah.

The Company has an agreement with Broadmark Real Estate Management II, LLC (the “Manager”) to manage the underwriting, closing, servicing, and disposition of mortgage notes, and perform all general and administrative duties. The Manager is the managing member of the Company. The Company derives its revenue from loan origination fees, extension and late fees, and interest income related to mortgage notes underwritten by the Company or the Manager. Fee income is recognized as received, and consists of the Company’s 20% share of origination, renewal and late fees an all loans. The remaining 80% of these fees are paid directly to the Manager, who services the loans. Interest income is accrued and recognized as interest becomes due pursuant to the loan terms.

Note 2 - Summary of significant accounting policies

Basis of accounting

The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Prior to October 1, 2018, the Company met the definition of an investment company and applied the guidance related to Financial Services - Investment Companies” as detailed in the Financial Accounting Standards Board’s Accounting Standards Codification Topic 946 (“ASC 946”). Effective with the REIT election on October 1, 2018, ASC 946 no longer applied to the Company. This change resulted in different presentations of the basic financial statements from the Company’s previously issued financial statements, as well as significant revisions of the financial statement disclosures in order to conform to GAAP. However, the change in the application of GAAP did not result in any changes to the Company’s opening members’ equity as of January 1, 2018.

Principles of consolidation

The accompanying consolidated financial statements include the accounts of BRELF II, LLC and its wholly-owned subsidiaries, 3089 West 35^th Avenue, LLC and BRELF KHP LLC (the “Subsidiaries”). The Subsidiaries were formed to own and operate real estate acquired through foreclosure on a non-performing first trust deed loan. All intercompany accounts, balances and transactions have been eliminated in consolidation. At September 30, 2019 the real estate held by these companies had been sold.

Use of estimates

Subsequent events

The Company has evaluated subsequent events through the date the consolidated financial statements were issued.

Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company has a cash management sweep account repurchase agreement whereby its bank nightly sweeps cash in excess of $750,000, sells the Company specific U.S. Government securities and then repurchases them the next day. The balance in the sweep account at September 30, 2019 and December 31, 2018, was $59,760,798 and $62,218,005, respectively.

F-36

BRELF II, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

Mortgage notes receivable

Mortgage notes receivable are held for investment purposes, anticipated to be held until maturity and are carried at cost, net of unfunded commitments and allowances for loan losses. Mortgage notes receivable that are deemed to be impaired are carried at amortized cost less a specific allowance for loan losses.

Loans Held for Investment

Allowance for loan losses

The allowance for loan losses reflects management’s estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The allowance is increased or decreased through the loan loss provision or recovery on the Company’s consolidated statement of income and is decreased by charge-offs when losses are confirmed through the receipt of assets, such as in a pre-foreclosure sale or upon ownership control of the underlying collateral in full satisfaction of the loan upon foreclosure or when significant collection efforts have ceased. The allowance for loan losses is determined on an asset-specific basis.

For collateral dependent impaired loans, impairment is measured using the estimated fair value of collateral less the estimated cost to sell. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. The Manager generally will obtain external “as is” appraisals for loan collateral to estimate the fair value of the collateral for such loans.

F-37

BRELF II, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

Real estate properties

During the nine months ended September 30, 2019 and 2018, the Company recorded no real estate additions. During the nine months ended September 30, 2019 and 2018, the Company recorded additional capitalized costs of $127,019 and $65,893, respectively, related to properties previously obtained through foreclosure. During the nine months ended September 30, 2019, aggregate proceeds from the sale of one property and aggregate net realized gains amounted to $2,004,278 and $167,146, respectively.

Income taxes

The Company operates and has elected to taxed as a REIT commencing with its conversion to a REIT effective October 1, 2018 and for the taxable period from October 1, 2018 through December 31, 2018. Accordingly, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that the Company makes qualifying distributions to members, and provided that the Company satisfies, on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution and unit ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which the Company lost its REIT qualification. Accordingly, the failure to qualify as a REIT could have a material adverse impact on the Company’s results of operations and amounts available for distribution to members.

As a REIT, if the Company fails to distribute in any calendar year (subject to specific timing rules for certain dividend paid in January) at least the sum of (i) 85% of its ordinary income for such year, (ii) 95% of its capital gain net income for such year, and (iii) any undistributed taxable income from the prior year, the Company would be subject to a non-deductible 4% excise tax on the excess of such required distribution over the sum of (x) the amounts actually distributed and (y) the amounts of income retained on which the Company has paid corporate income tax.

The dividend paid deduction for qualifying dividends paid to members is computed using the Company’s taxable income as opposed to net income reported in the Consolidated Statement of Income. Taxable income, generally, will differ from income reported in the Consolidated Statement of Income because the determination of taxable income is based on tax regulations and GAAP.

For the period from January 1, 2019 through September 30, 2019, the Company was in compliance with all REIT qualification and distribution requirements.

The subsidiaries are a limited liability companies and is classified as partnerships for income tax purposes. The Subsidiaries are considered disregarded entities for federal income tax purposes.

The Company has no unrecognized tax benefits at September 30, 2019. As the Company was formed in 2014, all federal and state tax returns remain open for examination. Management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.

The Company recognizes interest and penalties associated with tax matters, if applicable, as operating expenses and includes interest and penalties with the related tax liability in the consolidate balance sheet.

F-38

BRELF II, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

Revenue recognition

Note 3 - Recent accounting pronouncements

Note 4 - Concentrations of credit risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and mortgage notes receivable.

The Company’s investments are in originating primarily short-term commercial and single-family construction and land development mortgage notes secured by first deeds of trust, mortgages or legal title in real property located in Colorado, Texas and Utah. The investments are exposed to various risks, such as market or credit risks.

Note 5- Mortgage notes receivable

The stated principal amount of loans receivable in the Company’s portfolio represents the Company’s interest in loans secured by first deeds of trust and is presented net of interest reserve and construction reserve holdbacks in the consolidated balance sheet.

The interest reserve holdback represents amounts withheld from the funding of certain mortgage notes receivable for the purpose of satisfying monthly interest payments over all or part of the term of the related note. Accrued interest is paid out of the interest reserve and recognized as interest income at the end of each month. The construction reserve holdback represents amounts withheld from the funding of construction loans until the Company’s management deems construction to be sufficiently completed.

The PPM for the Company includes specific criteria for mortgages qualified to be investments of the Company, including that all notes be first position liens and that the maximum loan to value ratio be 65%, and prior to funding, all loan packages will include an appraisal by a third party qualified appraiser. The maximum amount of a single loan may not exceed 10% and the maximum amount to a single borrower may not exceed 15% of the total assets of the Company.

F-39

BRELF II, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

Mortgage notes receivable are recorded at their cost, which are approximate to their face amounts, and interest rates generally range from 10% to 13%.

A summary of information pertaining to mortgage notes receivable at September 30, 2019 and December 31, 2018:

	September 30, 2019		December 31, 2018
Total loan commitments	$	614,594,153	$	445,981,962
Less:
Construction holdbacks		141,910,841		152,166,118
Interest reserves		12,383,423		15,609,082
Allowance for loan losses		–		167,142
Total mortgage notes receivable	$	460,299,889	$	278,039,620

The Notes are considered to be short-term financings, with the expectation of repayment generally within 6 to 18 months. The Company generally collects a three to five percent origination fee at each initial loan closing for Notes with a 12-month term, and a one percent fee per two-month extension, of which the Company retains 20% and 80% is remitted to the Manager.

Defaulted notes

Non-accrual on defaulted loans

No interest income is recorded on notes that are in default, unless the interest is paid. At September 30, 2019 and December 31, 2018 all defaulted and impaired loans were on nonaccrual status.

The composition of the loan portfolio is as follows as of the period indicated:

Total loans by segment	September 30, 2019		December 31, 2018
Current mortgage notes receivable	$	460,299,889	$	276,562,344
Defaulted and impaired loans		–		1,644,418
Total mortgage notes receivable	$	460,299,889	$	278,206,762

Current mortgage

notes receivable

Reserves on loans

in default

Total Reserves

Beginning January 1, 2019

–

167,142

Provision for loan losses

–

(167,142

)

(167,142

)

Charge offs

–

Recoveries

–

Ending September 30, 2019

–

F-40

BRELF II, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

Current mortgage

notes receivable

Reserves on loans

in default

Total Reserves

Beginning January 1, 2018

–

Provision for loan losses

–

353,968

Charge offs

–

Recoveries

–

Ending September 30, 2018

–

353,968

There were no impaired loans at September 30, 2019.

A summary of information pertaining to impaired loans at December 31, 2018:

Recorded

investments

(Loan balance

less charge-

offs)

Unpaid

principal

balance

allowance

Average

investment in

impaired loans

Interest

income

recognized

With allowance recorded on impaired loans

1,664,418

167,142

1,192,275

–

Note 6 - Members’ equity

The Manager is the sole common unit holder of the Company. Pursuant to the terms of the PPM, as amended on September 18, 2017, the Company can offer up to $500,000,000 of membership interests in the Company. Each dollar is considered equal to one preferred unit, with a minimum contribution amount of $100,000, subject to Manager discretion in accepting lesser amounts. Effective with the Company’s REIT election on October 1, 2018, preferred units were exchanged at a 1:100 ratio. After one year, preferred unit holders may request redemptions, subject to the Manager’s sole discretion to establish reserves and to determine cash available for redemptions. All redemption requests made in any calendar quarter are paid out on the first day of the subsequent quarter. The actual redemption amount will be equal to the unit value in effect at the time of the redemption payment, multiplied by the number of units redeemed by the member. No new mortgages will be funded until all outstanding redemption requests from the previous quarters are met, with the exception of draws on construction loans, which will be funded irrespective of outstanding redemption requests. The preferred unit holders have the right by majority vote to replace the Manager.

(a)

First, to and among all the members any Fee Based Income (defined as 20% of the loan fee income received from origination points, late fees and renewal fees);

(b)

(c)

Thereafter, after deducting expenses, the distribution is as follows:

F-41

BRELF II, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

(i)

Eighty percent (80%) to the members pro rata; and

(ii)

Twenty percent (20%) to the Manager.

Note 7 - Related party transactions

Certain members of the Company are considered related parties.

A summary of information pertaining to member related parties at September 30, 2019 and December 31, 2018:

	As of		As of
	September 30, 2019		December 31, 2018
Capital balances	$	6,403,084	$	6,241,031
Dividends payable		57,767		57,870

	Nine months ended
	September 30, 2019		September 30, 2018
Contributions, net	$	162,053	$	102,948
Redemptions		–		–
Income allocated		527,008		180,862

Related parties include PBRELF I, LLC, BRELF III, LLC, BRELF IV, LLC, the related respective management companies and Broadmark Capital, LLC. Amounts payable and receivable to these other related parties were immaterial at September 30, 2019 and December 31, 2018.

Note 8 - Commitments and contingencies

The Company’s commitments and contingencies include usual obligations incurred by real estate companies in the normal course of business. These include interest reserves and construction holdbacks as disclosed in Note 5. In the opinion of management, these matters will not have a material adverse effect on the Company’s financial position and results of operations.

Note 9 – Fair value measurements

There were no impaired loans or REO at September 30, 2019.

The table below sets forth by level within the fair value hierarchy assets and liabilities measured and reported at fair value on a nonrecurring basis as of December 31, 2018:

	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant other unobservable inputs (Level 3)
Nonperforming mortgage notes receivable	$	–	$	–	$	1,664,418
Real estate property		–		–		1,709,729
Total	$	–	$	–	$	3,374,147

F-42

BRELF II, LLC and Subsidiaries

Notes to Unaudited Interim Consolidated Financial Statements

The following table presents additional information about valuation methodologies and inputs used for assets that are measured at fair value and categorized within Level 3 as of December 31, 2018:

Investments	Fair value at December 31, 2018		Valuation technique	Unobservable input	Range of inputs¹
Nonperforming mortgage notes receivable	$	1,664,418	Market comparable	Adjustment to appraisal value		0-10	%
Real estate property		1,709,729	Market comparable	Adjustment to appraisal value		0-10	%
Total	$	3,374,147
¹Discount for selling costs.

Fair value of financial instruments

For mortgage notes receivable, which ae classified under Level 3 within the fair value hierarchy, fair values are based on discounted cash flows considering interest rate risk and creditworthiness of the borrower. In addition, the Company performs monthly credit reviews of the loan portfolio and considers current economic conditions, review of specific problem loans and other economic and industry factors, as well as the value of the underlying collateral, in determining fair value. The mortgage notes are secured by first deeds of trust, security agreements or legal title to real estate located in the United States. The notes generally have terms ranging between 6 and 18 months and may be extended by paying additional fees. Due to the short-term maturity of the notes, carrying value approximates fair value.

Note 10 - Subsequent events

Subsequent to September 30, 2019, the Company placed one loan in default. The loan had a principal balance of $2,112,127. A loan loss reserve of $211,213 was recorded on October 31, 2019.

On August 9, 2019, the Company entered into a definitive agreement with Trinity Merger Corp. to effectuate a business combination transaction which will combine the Company, Manager, Pyatt Broadmark Management, LLC, Broadmark Real Estate Management III, LLC, Broadmark Real Estate Management IV, LLC, PBRELF I, LLC, BRELF III, LLC, and BRELF IV, LLC into a publicly-traded internally managed Mortgage REIT. The transaction received investor and regulatory approval and closed on November 14, 2019.

In accordance with quarterly redemption rights, holders of preferred units were permitted to request redemptions from available cash at the end of September 2019. The total amount of redemptions requested was approximately $55,000,000. Following payment of these redemptions and regular monthly distributions in early October 2019, the Fund's cash balance was reduced to approximately $2,300,000.

F-43

BRELF III, LLC

Balance Sheets (unaudited)

	As of September 30, 2019		As of December 31, 2018
Assets
Cash and cash equivalents	$	6,511,234	$	4,124,069
Mortgage notes receivable, net		16,766,285		7,539,360
Interest and fees receivable		28,418		5,248
Total assets	$	23,305,937	$	11,668,677
Liabilities and Members’ Equity
Accounts payable and accrued expenses	$	44,296	$	134,937
Dividends payable		183,574		103,097
Contributions received in advance		–		70,000
Total liabilities		227,870		308,034
Commitments and contingencies (Note 8)
Members’ equity
Preferred Units - Preferred units (voting) 230,741 and 114,506 units issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		23,074,110		11,450,642
Common units, $0 par value, 1 unit authorized; 1 unit issued and outstanding as of September 30, 2019 and December 31, 2018		–		–
Retained earnings (accumulated deficit)		3,957		(89,999	)
Members’ equity		23,078,067		11,360,643
Total liabilities and members’ equity	$	23,305,937	$	11,668,677

See Notes to Financial Statements.

F-44

BRELF III, LLC

Statement of Income (unaudited)

	Nine months ended September 30, 2019		January 24 (date of inception) through September 30, 2018
Revenue
Interest income	$	1,564,710	$	275,627
Fee income		174,579		71,042
Total revenue		1,739,289		346,669
Expense
Professional fees		54,382		8,862
Other		25,000		–
Total expenses		79,382		8,862
Net income	$	1,659,907	$	337,807

See Notes to Financial Statements.

F-45

BRELF III, LLC

Statement of Changes in Members’ Equity (unaudited)

For the nine months ended September 30, 2019 and January 24 (date of inception) through September 30, 2018

	Manager			Members			Total
Balance, January 24, 2018		–		$	–		$	–
Contributions
Cash					8,115,000			8,115,000
Reinvestments					105,624			105,624
Net income					337,807			337,807
Incentive fee allocation to manager		22,890		$	(22,890	)		–
Distributions		(22,890	)		(308,407	)		(331,297	)

Balance, September 30, 2018	$	–		$	8,227,134		$	8,227,134

	Common Units			Preferred Units (voting)						(Accumulated deficit) Retained earnings			Total
	Units	Amount		Units			Amount
Balance, December 31, 2018	1	$	–		114,506		$	11,450,642		$	(89,999	)	$	11,360,643
Contributions
Cash					113,598			11,359,780			–			11,359,780
Reinvestments					5,854			585,431			–			585,431
Net income											1,659,907			1,659,907
Incentive fee allocation to manager											(153,238	)		(153,238	)
Distributions											(1,412,713	)		(1,412,713	)
Redemptions					(3,217	)		(321,743	)		–			(321,743	)
Balance, September 30, 2019	1	$	–		230,741		$	23,074,110		$	3,957		$	23,078,067

See Notes to Financial Statements.

F-46

BRELF III, LLC

Statement of Cash Flows (unaudited)

	Nine months ended September 30, 2019			January 24 (date of inception) through September 30, 2018
Cash flows from operating Activities
Net Income	$	1,659,907		$	337,807
Adjustments to reconcile net income to net cash used in operations:
Changes in operating assets and liabilities:
Interest and fees receivable		(23,170	)		–
Other receivables		–			9,241
Accounts payable and accrued expenses		(90,641	)		8,545
Net cash from operating activities		1,546,096			355,593
Cash flows from investing activities
Investments in mortgage notes receivable		(9,226,925	)		(4,005,416	)
Net cash used in investing activities		(9,226,925	)		(4,005,416	)
Cash flows from financing activities
Contributions		11,359,780			8,115,000
Contributions received in advance		(70,000	)		500,000
Dividends payable, net		80,477			77,641
Distributions		(980,520	)		(225,673	)
Redemptions		(321,743	)		–
Net cash from financing activities		10,067,994			8,466,968
Net change in cash		2,387,165			4,817,145
Cash and cash equivalents, beginning of period		4,124,069			–
Cash and cash equivalents, end of period	$	6,511,234		$	4,817,145
Supplemental disclosure of non cash investing and financing activities
Reinvested distributions	$	585,431		$	105,624

See Notes to Financial Statements.

F-47

BRELF III, LLC

Notes to Financial Statements

Note 1 - Organization and business

BRELF III, LLC (the “Company”) is a Washington limited liability company formed on January 24, 2018 and operates under the Amended and Restated Limited Liability Company Agreement (the “Operating Agreement”) dated October 1, 2018. The Company will have perpetual existence unless terminated pursuant to the provisions of the Operating Agreement. Effective January 1, 2019, the Company elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.

The Company is a private real estate lending company that originates primarily commercial and single-family construction and land development mortgages secured by real estate. The primary purpose of the Company is to make short-term, first position construction and development loans secured by deeds of trust on real estate located exclusively in the in Georgia, North Carolina, South Carolina, Tennessee and Florida.

The Company has an agreement with Broadmark Real Estate Management III, LLC (the “Manager”) to manage the underwriting, closing, servicing, and disposition of mortgage notes, and perform all general and administrative duties. The Manager is the common unit holder and functions as managing member of the Company. The Company derives its revenue from loan origination fees, extension and late fees, and interest income related to mortgage notes underwritten by the Company or the Manager. Fee income is recognized as received, and consists of the Company’s 20% share of origination, renewal and late fees an all loans. The remaining 80% of these fees are paid directly to the Manager, who services the loans. Interest income is accrued and recognized as interest becomes due pursuant to the loan terms.

Note 2 - Summary of significant Accounting policies

Basis of accounting

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) using the guidance related to “Financial Services – Investment Companies” as detailed in the Financial Accounting Standards Board’s Accounting Standards Codification Topic 946. Effective with the REIT election on January 1, 2019, ASC 946 no longer applied to the Company. This change resulted in different presentations of the basic financial statements from the Company’s previously issued financial statements, as well as significant revisions of the financial statement disclosures in order to conform to GAAP. However, the change in the application of GAAP did not result in any changes to the Company’s opening members’ equity as of January 1, 2019.

Subsequent events

The Company has evaluated subsequent events through the date the financial statements were issued.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the fair value of investments, certain reported amounts and disclosures at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates.

Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company has a cash management sweep account repurchase agreement whereby its bank nightly sweeps cash in excess of $750,000, sells the Company specific U.S. Government securities and then repurchases them the next day. The balance in the sweep account at September 30, 2019 and December 31, 2018, was $6,246,618 and $3,873,134, respectively.

Mortgage notes receivable

Mortgage notes receivable are held for investment purpose, anticipated to be held until maturity and are carried at cost, net of unfunded commitments and allowance for loan losses. Mortgage notes receivable that are deemed to be impaired are carried at amortized cost less a specific allowance for loan losses.

F-48

BRELF III, LLC

Notes to Financial Statements

Loans Held for Investment

Loans held for investment are reported at the principal amount outstanding. Interest on performing loans is accrued and recognized as interest income at the contractual rate of interest, or at the contractual rate of monthly minimum interest. All loans are held for investment, and the intent is always to hold the loan to maturity. The Company rarely sells a note and does not originate a note with the intent to sell the note.

Allowance for loan losses

The allowance for loan losses reflects management’s estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The allowance is increased or decreased through the loan loss provision or recovery on the Company’s statement of income and is decreased by charge-offs when losses are confirmed through the receipt of assets, such as in a pre-foreclosure sale or upon ownership control of the underlying collateral in full satisfaction of the loan upon foreclosure or when significant collection efforts have ceased. The allowance for loan losses is determined on an asset-specific basis.

Real estate properties

F-49

BRELF III, LLC

Notes to Financial Statements

Income taxes

The Company operates and has elected to be taxed as a REIT commencing with its conversion to a REIT effective January 1, 2019. Accordingly, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that the Company makes qualifying distributions to members, and provided that the Company satisfies, on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution and unit ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which the Company lost its REIT qualification. Accordingly, the failure to qualify as a REIT could have a material adverse impact on the Company’s results of operations and amounts available for distribution to members.

The dividend-paid deduction for qualifying dividends paid to members is computed using the Company’s taxable income as opposed to net income reported in the Statement of Income. Taxable income, generally, will differ from income reported in the Statement of Income because the determination of taxable income is based on tax regulations and GAAP.

For the period from January 1, 2019 through September 30, 2019, the Company was in compliance with all REIT qualification and distribution requirements.

The subsidiaries are limited liability companies and are classified as partnerships for income tax purposes. The Subsidiaries are considered disregarded entities for federal income tax purposes.

The Company has no unrecognized tax benefits at September 30, 2019. Management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.

Revenue recognition

Fair value measurements

•

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•

F-50

BRELF III, LLC

Notes to Financial Statements

•

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Note 3 – Recent Accounting Pronouncements

Note – Concentrations of credit risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and mortgage notes receivable.

The Company’s investments are in originated short-term mortgage notes secured by first deeds of trust, mortgages or legal title in real property in Georgia, North Carolina, South Carolina, Tennessee, and Florida. The investments are exposed to various risks, such as market or credit risks.

Note 5 – Mortgage notes receivable

The Private Placement Memorandum (“PPM”) for the Company includes specific criteria for mortgages qualified to be investments of the Company, including that all notes be first position liens and that the maximum loan to value ratio be 65%, and prior to funding, all loan packages will include an appraisal by a qualified third-party appraiser. The maximum amount of a single loan may not exceed 10% and the maximum amount to a single borrower may not exceed 15% of the total assets of the Company.

F-51

BRELF III, LLC

Notes to Financial Statements

The Notes are recorded at their market values, which are approximate to their face amounts, and interest rates generally range from 12% to 12.5%.

A summary of information pertaining to mortgage notes receivable at September 30, 2019 and December 31, 2018:

	September 30, 2019		December 31, 2018
Total loan commitments	$	28,276,939	$	15,866,252
Less:
Construction holdbacks		10,700,246		8,068,378
Interest reserves		810,408		258,514
Allowance for loan losses		–		–
Total mortgage notes receivable	$	16,766,285	$	7,539,360

The Notes are considered to be short-term financings, with the expectation of repayment generally within 6 to 12 months. The Company targets to collect a five percent origination fee at each initial loan closing for Notes with a 12-month term, and a one percent fee per two-month extension, of which the Company retains 20% and 80% is remitted to the Manager.

Defaulted notes

Non-accrual on defaulted loans

No interest income is reported on notes that are in default, unless the interest is paid. At September 30, 2019 and December 31, 2018 no loans were in default.

Note 6 - Members’ equity

Pursuant to the terms of the PPM, the Fund can offer up to $250,000,000 of membership interests in the Fund. Each dollar is considered equal to one membership unit, with a minimum contribution amount of $100,000, subject to Manager discretion in accepting lesser amounts. Effective with the Company’s REIT election on January 1, 2019, preferred units were exchanged at a 1:100 ratio. The Manager is the sole common unit holder of the Company. After one year, preferred unit holders may request redemptions, subject to the Manager’s sole discretion to establish reserves and to determine cash available for redemptions. All redemption requests made in any calendar quarter are paid out on the first day of the subsequent quarter. The actual redemption amount will be equal to the unit value in effect at the time of the redemption payment, multiplied by the number of units redeemed by the member. No new mortgages will be funded until all outstanding redemption requests from the previous quarters are met, with the exception of draws on construction loans, which will be funded irrespective of outstanding redemption requests. The preferred unit holders have the right by majority vote to replace the Manager.

F-52

BRELF III, LLC

Notes to Financial Statements

(a)

First, to and among all the members any fee based income (defined as 20% of the loan fee income received from origination points, late fees and renewal fees);

(b)

(c)

Thereafter, after deducting expenses, the distribution is as follows:

(i)

Eighty percent (80%) to the members pro rata; and

(ii)

Twenty percent (20%) to the Manager.

Note 7 - Related party transactions

Certain members of the Company are considered related parties.

A summary of information pertaining to member related parties at September 30, 2019 and December 31, 2018:

	As of		As of
	September 30, 2019		December 31, 2018
Capital balances	$	719,061	$	674,561
Dividends payable		5,701		6,074

	Nine months ended
	September 30, 2019		September 30, 2018
Contributions, net	$	674,561	$	49,532
Redemptions		–		–
Income allocated		56,508		27,019

Related parties include PBRELF I, LLC, BRELF II, LLC, BRELF IV, LLC, the related respective management companies and Broadmark Capital, LLC. Amounts payable and receivable to these other related parties were immaterial at September 30, 2019 and December 31, 2018.

Note 8 - Commitments and contingencies

Note 9 – Fair value measurements

Fair value of financial instruments

F-53

BRELF III, LLC

Notes to Financial Statements

Note 10 - Subsequent events

On August 9, 2019, the Company entered into a definitive agreement with Trinity Merger Corp. to effectuate a business combination transaction which will combine the Company, Manager, Pyatt Broadmark Management, LLC, Broadmark Real Estate Management II, LLC, Broadmark Real Estate Management IV, LLC, PBRELF I, LLC, BRELF II, LLC, and BRELF IV, LLC into a publicly-traded internally managed Mortgage REIT. The transaction received investor and regulatory approval and closed on November 14, 2019.

In accordance with quarterly redemption rights, holders of preferred units were permitted to request redemptions from available cash at the end of September 2019. The total amount of redemptions requested was approximately $1,300,000. Following payment of these redemptions and regular monthly distributions in early October 2019, the Fund's cash balance was reduced to approximately $7,300,000.

F-54

BRELF IV, LLC

Balance Sheet (unaudited)

	As of September 30, 2019
Assets
Cash and cash equivalents	$	936,594
Mortgage notes receivable, net		2,667,239
Interest and fees receivable		3,000
Total assets	$	3 ,606,833

Liabilities and Members’ Equity

Liabilities
Accounts payable and accrued expenses	$	18,146
Dividends payable		30,377
Total liabilities		48,523

Commitments and contingencies (Note 7)

Members’ equity
Preferred Units - Preferred units (voting) 35,583 units issued and outstanding as of September 30, 2019		3,558,310
Common units, $0 par value, 1 unit authorized; 1 unit issued and outstanding as of September 30, 2019		–
Retained earnings		–
Members’ equity		3,558,310
Total liabilities and members’ equity	$	3 ,606,833

See Notes to Financial Statements.

F-55

BRELF IV, LLC

Statement of Income (unaudited)

	February 28 (date of inception) through September 30, 2019
Revenue
Interest income	$	102,130
Fee income		22,490
Total revenue		124,620
Expense
Other		933
Total expenses		933
Net income	$	123,687

See Notes to Financial Statements.

F-56

BRELF IV, LLC

Statement of Changes in Members’ Equity (unaudited)

February 28, 2019 (date of inception) through September 30, 2019

	Common Units			Preferred Units (voting)				Retained earnings			Total
	Units	Amount		Units		Amount		Retained earnings			Total
Balance, February 28, 2019	1	$	–		–	$	–	$	–		$	–
Contributions
Cash					35,246		3,524,619		–			3,524,619
Reinvestments					337		33,691		–			33,691
Net income							–		123,687			123,687
Incentive fee allocation to manager							–		(10,293	)		(10,293	)
Distributions							–		(113,394	)		(113,394	)

Balance, September 30, 2019	1	$	–		35,583	$	3,558,310	$	–		$	3,558,310

See Notes to Financial Statements.

F-57

BRELF IV, LLC

Statement of Cash Flows (unaudited)

	February 28 (date of inception) through September 30, 2019
Cash flows from operating Activities
Net Income	$	123,687
Adjustments to reconcile net income to net cash used in operations:
Changes in operating assets and liabilities:
Interest and fees receivable		(3,000	)
Accounts payable and accrued expenses		18,146
Net cash from operating activities		138,833
Cash flows from investing activities
Investments in mortgage notes receivable		(2,667,239	)
Net cash used in investing activities		(2,667,239	)
Cash flows from financing activities
Contributions		3,524,619
Dividends payable, net		30,377
Distributions		(89,996	)
Net cash from financing activities		3,465,000
Net change in cash		936,594
Cash and cash equivalents, beginning of period		–
Cash and cash equivalents, end of period	$	936,594
Supplemental disclosure of non cash investing and financing activities Reinvested distributions	$	33,691

See Notes to Financial Statements.

F-58

BRELF IV, LLC

Notes to Financial Statements

Note 1 - Organization and business

BRELF IV, LLC (the “Company”) is a Washington limited liability company that began operations on February 28, 2019 and operates under a Limited Liability Company Agreement (the “Operating Agreement”) dated January 2, 2019. The Company will have perpetual existence unless terminated pursuant to the provisions of the Operating Agreement. From inception, the Company elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.

The Company is a private real estate lending company that originates primarily commercial and single-family construction and land development mortgages secured by real estate. The primary purpose of the Company is to make short-term, first position construction and development loans secured by deeds of trust on real estate located exclusively in Maryland, Pennsylvania, Virginia, and the District of Columbia.

The Company has an agreement with Broadmark Real Estate Management IV, LLC (the “Manager”) to manage the underwriting, closing, servicing, and disposition of mortgage notes, and perform all general and administrative duties. The Manager is the common unit holder and functions as manager of the Company. The Company derives its revenue from loan origination fees, extension and late fees, and interest income related to mortgage notes underwritten by the Company or the Manager. Fee income is recognized as received, and consists of the Company’s 20% share of origination, renewal and late fees an all loans. The remaining 80% of these fees are paid directly to the Manager, who underwrites and services the loans. Interest income is accrued and recognized as interest becomes due pursuant to the loan terms.

Note 2 - Summary of significant accounting policies

Basis of accounting

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Use of estimates

Subsequent events

The Company has evaluated subsequent events through the date the financial statements were issued.

Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company has a cash management sweep account repurchase agreement whereby its bank nightly sweeps cash, sells the Company specific U.S. Government securities and then repurchases them the next day. The balance in the sweep account at September 30, 2019 was $936,594.

Mortgage notes receivable

F-59

BRELF IV, LLC

Notes to Financial Statements

Loans Held for Investment

Allowance for loan losses

The allowance for loan losses reflects management’s estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The allowance is increased or decreased through the loan loss provision or recovery on the Company’s statement of income, and is decreased by charge-offs when losses are confirmed through the receipt of assets, such as in a pre-foreclosure sale or upon ownership control of the underlying collateral in full satisfaction of the loan upon foreclosure or when significant collection efforts have ceased. The allowance for loan losses is determined on an asset-specific basis.

Real estate property

Real estate property owned by the Company consists of real estate acquired in settlement of loans. Real estate acquired through foreclosure is recorded at fair market value at the time of foreclosure, which generally approximates the carrying value of the loan secured by such property. All other real estate acquisitions are recorded at cost. All costs related to acquisition, development, construction and improvements, including repairs, maintenance and legal costs are capitalized and subsequently measured for impairment.

Income taxes

The Company operates and has elected to be taxed as a REIT. Accordingly, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that the Company makes qualifying distributions to members, and provided that the Company satisfies, on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution and unit ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which the Company lost its REIT qualification. Accordingly, the failure to qualify as a REIT could have a material adverse impact on the Company’s results of operations and amounts available for distribution to members.

F-60

BRELF IV, LLC

Notes to Financial Statements

The dividend paid deduction for qualifying dividends paid to members is computed using the Company’s taxable income as opposed to net income reported in the Statement of Income. Taxable income, generally, will differ from income reported in the Statement of Income because the determination of taxable income is based on tax regulations and GAAP.

For the period from January 1, 2019 through September 30, 2019, the Company was in compliance with all REIT qualification and distribution requirements.

The subsidiaries are a limited liability companies and is classified as partnerships for income tax purposes. The Subsidiaries are considered disregarded entities for federal income tax purposes.

Fair value measurements

•

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

F-61

BRELF IV, LLC

Notes to Financial Statements

Revenue recognition

The Company derives its revenue from loan origination fees, extension and late fees, and interest income related to mortgage notes underwritten by the Company or the Manager. Fee income is recognized as received, and consists of the Company’s 20% share of origination, renewal and late fees an all loans. The remaining 80% of these fees are paid directly to the Manager, who services the loans. Interest income is accrued and recognized as interest becomes due pursuant to the loan terms. The Company targets to collect a five percent origination fee at each initial loan closing for Notes with a 12-month term, and a one percent fee per two-month extension, of which the Manager retains 80% and 20% is remitted to the Company.

Note 3 - Recent accounting pronouncements.

Note 4 - Members’ equity

Pursuant to the terms of the PPM, the Company can offer up to $250,000,000 of preferred membership interests in the Company with a minimum contribution amount of $100,000, subject to Manager discretion in accepting lesser amounts. As of September 30, 2019, there was one common unit issued and outstanding. The Manager is the sole common unit holder of the Company. After one year, preferred unit holders may request redemptions from available cash, subject to the applicable gate and Manager’s sole discretion to establish reserves and to determine cash available for redemptions. All redemption requests made in any calendar quarter are paid from available cash on the first day of the subsequent quarter. The actual redemption amount will be equal to the unit value in effect at the time of the redemption payment, multiplied by the number of units redeemed by the member. No new mortgages will be funded until all outstanding redemption requests from the previous quarters are met, with the exception of draws on construction loans, which will be funded irrespective of outstanding redemption requests. The preferred unit holders have the right by majority vote to replace the Manager.

Preferred unit holders are expected to receive a monthly preferred return, per preferred unit held, determined as of the date the distribution of the preferred return is declared. The preferred return is paid out of the fees and other income received. The preferred return is not guaranteed and is only paid monthly to the extent earned by the Company.

(a)

First, to and among all the members any fee based income (defined as 20% of the loan fee income received from origination points, late fees and renewal fees);

(b)

F-62

BRELF IV, LLC

Notes to Financial Statements

(c)

Thereafter, after deducting expenses, the distribution of residual earnings is as follows:

(i)

Eighty percent (80%) to the preferred unit holders pro rata; and

(ii)

Twenty percent (20%) to the common unit holder.

Note 5- Mortgage notes receivable

The Private Placement Memorandum (“PPM”) for the Company includes specific criteria for mortgages qualified to be investments of the Company, including that all notes be first position liens and that the maximum loan to value ratio be 65%, and prior to funding, all loan packages will include an appraisal by a qualified third-party appraiser. The maximum amount of a single loan may not exceed 10% and the maximum amount to a single borrower may not exceed 15% of the total assets of the Company.

Notes receivable are recorded at their market values, which are approximate to their face amounts, and interest rates generally range from 12% to 12.5%.

A summary of information pertaining to mortgage notes receivable at September 30, 2019:

	September 30, 2019
Total loan commitments	$	3,919,000
Less:
Construction holdbacks		1,173,680
Interest reserves		78,081
Allowance for loan losses		–

Total mortgage notes receivable	$	2,667,239

Defaulted notes

F-63

BRELF IV, LLC

Notes to Financial Statements

Non-accrual on defaulted loans

No interest income is reported on notes that are in default, unless the interest is paid. At September 30, 2019 no loans were in default.

Note 6 – Related party transactions

Related parties include PBRELF I, LLC, BRELF II, LLC, BRELF III, LLC, the related respective management companies and Broadmark Capital, LLC. Amounts payable and receivable to these other related parties were immaterial at September 30, 2019.

Note 7 - Commitments and contingencies

The Company’s commitments and contingencies include usual obligations incurred by real estate investment companies in the normal course of business. In the opinion of management, these matters will not have a material adverse effect on the Company’s financial position and results of operations.

From time to time, the Company is named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial condition or cash flows.

Note 8 - Concentrations of credit risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and mortgage notes receivable.

The Company maintains its cash and cash equivalents with high-credit quality financial institutions. At times, such amounts may exceed federally insured limits. At September 30, 2019 the uninsured cash and cash equivalents balance was approximately $686,594.

The Company’s investments are in originated short-term mortgage notes secured by first deeds of trust, mortgages or legal title in real property in Pennsylvania and Washington D.C. The investments are exposed to various risks, such as market or credit risks.

Note 9 – Fair value measurements

Fair value of financial instruments

Note 10 - Subsequent events

F-64

BRELF IV, LLC

Notes to Financial Statements

In accordance with quarterly redemption rights, holders of preferred units were permitted to request redemptions from available cash at the end of September 2019. The total amount of redemptions requested was approximately $300,000. Following payment of these redemptions and regular monthly distributions in early October 2019, the Fund's cash balance was reduced to approximately $600,000.

F-65

Pyatt Broadmark Management, LLC

Statements of Assets, Liabilities and Members’ Equity (unaudited)

	As of September 30, 2019		As of December 31, 2018
Assets
Current Assets
Cash	$	1,764,190	$	101,634
Fees receivable from escrow		180,387		226,521
Due from related parties		1,653,829		945,990
		3,598,406		1,274,145
Noncurrent Assets
Fixed assets, net of depreciation		221,035		192,262
Organization costs		6,293		6,817
		227,328		199,079
Total Assets	$	3,825,734	$	1,473,224
Liabilities and Members’ Equity
Liabilities
Accrued expenses	$	156,340	$	154,110
Total liabilities		156,340		154,110
Members’ equity
Class A units 850 and 950 units issued and outstanding as of September 30, 2019 and December 31, 2018		200		200
Class P units 150 and 50 units issued and outstanding as of September 30, 2019 and December 31, 2018		–		–
Additional paid in capital		993,614		259,450
Retained earnings		2,675,580		1,059,464
Members’ equity		3,669,394		1,319,114
Total liabilities and members’ equity	$	3,825,734	$	1,473,224

See Notes to Financial Statements.

F-66

Pyatt Broadmark Management, LLC

Statements of Income (unaudited)

	Nine months ended
	September 30, 2019		September 30, 2018
Revenue
Fee income	$	11,613,505	$	10,774,789
Distributions from Fund		3,099,704		2,355,366
Total revenue		14,713,209		13,130,155
Expense
Compensation		1,436,148		1,046,059
Commissions to Broadmark Capital LLC		2,436,922		1,613,176
General and administrative		273,036		365,567
Excise tax expense		209,427		186,323
Legal, audit, insurance		1,715,846		385,912
Depreciation expense		34,308		64,000
Inspection fees		198,919		155,328
Other		5,770		–
Total expenses		6,310,376		3,816,365
Net income	$	8,402,833	$	9,313,790

See Notes to Financial Statements.

F-67

Pyatt Broadmark Management, LLC

Statements of Changes in Members’ Equity (unaudited)

	Class A units					Class P units				Additional paid in capital		Retained earnings			Total
	Units			Amount		Units		Amount
Balance at January 1, 2018		1,000		$	200			$	–	$	–	$	447,496		$	447,696
Net income													9,313,790			9,313,790
Compensation expense related to grant of profits interest		(50	)		–		50		–		259,450		–			259,450
Distributions to members													(7,390,001	)		(7,390,001	)
Balance at September 30, 2018		950		$	200		50	$	–	$	259,450	$	2,371,285		$	2,630,935

	Class A units					Class P units				Additional paid in capital		Retained earnings			Total
	Units			Amount		Units		Amount
Balance at January 1, 2019		950		$	200		50	$	–	$	259,450	$	1,059,464		$	1,319,114
Net income													8,402,833			8,402,833
Compensation expense related to grant of profits interest		(100	)		–		100		–		734,164		–			734,164
Distributions to members													(6,786,717	)		(6,786,717	)
Balance at September 30, 2019		850		$	200		150	$	–	$	993,614	$	2,675,580		$	3,669,394

See Notes to Financial Statements.

F-68

Pyatt Broadmark Management, LLC

Statements of Cash Flows (unaudited)

	Nine months ended
	September 30, 2019			September 30, 2018
Cash flows from operating activities
Net income	$	8,402,833		$	9,313,790
Adjustments to reconcile net income to net cash used in operations:
Depreciation		34,308			64,000
Amortization		524			–
Compensation expense related to grant of profits interest		734,164			259,450
Changes in operating assets and liabilities:
Change in fees receivable from escrow		46,134			162,712
Change in amounts due from related parties		(707,839	)		(598,693	)
Change in accrued expenses		2,230			(387,281	)
Net cash from operating activities		8,512,354			8,813,978
Cash flows from investing activities
Investment in fixed assets		(63,081	)		(278,631	)
Net cash used in investing activities		(63,081	)		(278,631	)
Cash flows from financing activities
Distributions to members		(6,786,717	)		(7,390,001	)
Net cash used in financing activities		(6,786,717	)		(7,390,001	)
Net change in cash and cash equivalents		1,662,556			1,145,346
Cash and cash equivalents, beginning of period		101,634			97,040
Cash and cash equivalents, end of period	$	1,764,190		$	1,242,386

See Notes to Financial Statements.

F-69

Pyatt Broadmark Management, LLC

Notes to Financial Statements

Note 1 - Organization and business

Pyatt Broadmark Management, LLC (the “Company”) is a Washington limited liability company formed on June 28, 2010. The Company operates under a First Amended and Restated Limited Liability Company Agreement (the “Operating Agreement”) dated January 1, 2018. The Company will have perpetual existence unless terminated pursuant to the provisions of the Operating Agreement.

The purpose of the company is to be the managing member of PBRELF I, LLC (the “Fund”), a private real estate lending company, to manage the underwriting, closing, servicing, and disposition of mortgage notes, and perform all general and administrative duties. The primary purpose of the Fund is to make short-term, first position loans secured by deeds of trust on real estate in Washington, Oregon and Idaho. Effective October 1, 2018 the Fund elected to be taxed as a real estate investment trust (“REIT”). As the manager of the Fund, the Company owns a separate class of common units in the Fund, the investors own preferred units.

Ownership rights of the Company are distributed amongst its Members through the issuance of Class A Units and Class P Units. The Class P Units are fully vested as of their grant date, and participate in Company profits in a manner similar to the Class A Units. On January 1, 2019, 100 Class P Units were granted and as of September 30, 2019, 850 Class A Units and 150 Class P Units were issued and outstanding. On January 1, 2018, 50 Class P Units were granted and as of December 31, 2018, 950 Class A Units and 50 Class P Units were issued and outstanding.

Note 2 - Summary of significant accounting policies

Basis of accounting

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Cash

The Company maintains cash in a demand deposit account with a bank. The bank balance may, at times, exceed federally insured limits.

Fees receivable from escrow

Fees receivable from escrow represents fee revenue generated from loans which closed prior to September 30, 2019 and December 31, 2018, but funds were not received until after the respective periods ended.

Due to or from related parties

Amounts due from related parties include unpaid manager distributions, unpaid extension and inspection fees, amounts advanced to Broadmark Real Estate Management II, LLC, Broadmark Real Estate Management III, LLC, and Broadmark Real Estate Management IV, LLC, and amounts owed by Members to the Company.

Fixed assets

Fixed assets are stated at cost. Repairs and maintenance to these assets are charged to expense as incurred; major improvements enhancing the function and/or useful life are capitalized. When items are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gains or losses arising from such transactions are recognized. Depreciation is recorded on the straight-line method over the estimated useful life of the assets which are generally 3 to 7 years.

F-70

Pyatt Broadmark Management, LLC

Notes to Financial Statements

Income taxes

The Company is taxed as a partnership under provisions of the Internal Revenue Code. As such, the tax attributes of the Company are included in the individual tax returns of its members. The accompanying financial statements do not include any provision for income taxes.

Revenue recognition

The Company derives revenue from four sources.

First, the company sources, underwrites and closes loans for the Fund, and is paid 80% of all origination, extension and amendment fees. These fees are earned and recognized in full when the loan is originated, or the loan amendment is signed.

Second, the company receives a monthly management fee from the Fund for ongoing loan servicing. This distribution is defined in the PBRELF I LLC Operating Agreement as 20% of “Distributable Income”. Distributable Income is interest income received in the Fund, less operating expenses and less any portion of interest income used to pay the guaranteed minimum return of 0.05% monthly to the preferred unit holders of the Fund when the Funds 20% of fee-based income is not sufficient to fund the guaranteed minimum payment. The distributions are disclosed on the Statements of Income. The receipt of the Distributable Income by the Company is when revenue is considered earned and recognized.

Third, the Company performs loan servicing for three other Funds in the Broadmark Group of Funds and is reimbursed by the management companies of the other funds for those costs, currently at a rate of 0.0006 multiplied by monthly assets under management for each of the other funds. The receipt of the monthly cost reimbursement is when revenue is considered earned and recognized.

Fourth, the Company also receives 100% of inspection fees, which the Company uses to hire independent inspectors to report on the status of construction projects. These fees are earned and recognized upon each construction draw request.

Share based compensation

The Company expenses the fair value of share-based compensation awards granted to our employees and directors over the period each award vests. Compensation cost is measured using the Black-Scholes model. On January 1, 2019 and 2018, we granted profits interests of 100 and 50 class P units to employees and non-employee Directors, and we measured the compensation costs using the Black-Scholes model utilizing risk-free interest rates of 2.04% and 1.86%, volatilities of 32% and 29%, strike prices of $53,756 and $29,031, and an expected term of one and two years, respectively. The profits interests vested immediately, and the expenses attributed to the grants were $734,165 and $259,450 for the periods ended September 30, 2019 and December 31, 2018, respectively.

Advertising costs

Advertising costs are expensed as incurred or over the period of the campaign/promotion and are not significant.

Use of estimates

Subsequent events

The Company has evaluated subsequent events through the date that the financial statements were issued, see Note 6.

F-71

Pyatt Broadmark Management, LLC

Notes to Financial Statements

Note 3 - Recent accounting pronouncements

The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued. ASUs and assessed them and either determined them to be not applicable or expected to have minimal impact on its financial statements.

Note 4 - Expenses

From time to time, the Company is involved in routine litigation that arises in the normal course of business. There are no pending significant legal proceedings to which the Company is a party for which management believes the ultimate outcome would have a material adverse effect on the Company’s financial position.

Note 5 - Related party transactions

Under an Investment Advisory Agreement dated August 1, 2010, Broadmark Capital LLC raises capital for the Fund. Under this agreement, Broadmark Capital, LLC is paid a commission from the Company of 1% in the month the capital is raised, and after 12 months also receives a “tail” commission of ½% per year, payable in quarterly installments. The commissions to Broadmark Capital, LLC are paid by the Company and disclosed on the Statement of Operations. The entity that owns Broadmark Capital, LLC is also a member of the Company.

Broadmark Capital, LLC leases office space, part of which is occupied by the Company. On a month to month basis the Company pays 80% of the cost of the office lease. Certain other office costs are also shared.

Pyatt Broadmark Management, LLC performs loan closing and loan servicing for the management companies of other funds within the Broadmark group of funds. The Company receives reimbursement of payroll and general and administrative costs associated with these services, currently at a rate of 0.0006 multiplied by monthly assets under management for each of the other funds.

Note 6 - Subsequent Events

On August 9, 2019, the Company entered into a definitive agreement with Trinity Merger Corp. to effectuate a business combination transaction which will combine the Company, Fund, Broadmark Real Estate Management II, LLC, Broadmark Real Estate Management III, LLC, Broadmark Real Estate Management IV, LLC, BRELF II, LLC, BRELF III, LLC, and BRELF IV, LLC into a publicly-traded internally managed Mortgage REIT. The transaction received investor and regulatory approval and closed on November 14, 2019.

F-72

Broadmark Real Estate Management II, LLC

Statements of Assets, Liabilities and Members’ Equity (unaudited)

	As of September 30, 2019		As of December 31, 2018
Assets
Cash	$	1,560,499	$	1,114,173
Fees receivable from escrow		2,000		780,909
Receivables from related parties		712,943		–
Other assets		1,203		127,664
Total assets	$	2,276,645	$	2,022,746
Liabilities and Members’ Equity
Liabilities
Payroll liabilities	$	48,390	$	–
Accounts payable		378,685		577,477
Related party payables		321,480		416,071
Total liabilities		748,555		993,548
Members’ equity
Class A units
10,000 units issued and outstanding as of September 30, 2019 and December 31, 2018		600		600
Additional paid in capital		266,264		266,264
Retained earnings		1,261,226		762,334
Members’ equity		1,528,090		1,029,198
Total liabilities and members’ equity	$	2,276,645	$	2,022,746

See Notes to Financial Statements.

F-73

Broadmark Real Estate Management II, LLC

Statements of Income (unaudited)

	Nine months ended
	September 30, 2019		September 30, 2018
Revenue
Fee income	$	12,840,484	$	10,895,691
Distributions from Fund		4,002,107		2,087,504
Total revenue		16,842,591		12,983,195
Expense
Compensation		2,444,536		1,213,536
Commissions to Broadmark Capital LLC		2,670,822		1,628,926
General and administrative		1,335,296		745,135
Legal, audit, insurance		975,407		79,475
Inspection fees		78,368		87,187
Total expenses		7,504,429		3,754,259
Net income	$	9,338,162	$	9,228,936

See Notes to Financial Statements.

F-74

Broadmark Real Estate Management II, LLC

Statements of Changes in Members’ Equity (unaudited)

	Class A units				Additional paid in capital		(Accumulated deficit) Retained earnings			Total
	Units		Amount

Balance at January 1, 2018		10,000	$	600	$	255,170	$	(80,325	)	$	175,445
Net income								9,228,936			9,228,936
Compensation expense related to restricted units		–				11,094		–			11,094
Distributions to members								(7,379,712	)		(7,379,712	)
Balance at September 30, 2018		10,000	$	600	$	266,264	$	1,768,899		$	2,035,763

	Class A units				Additional paid in capital		Retained earnings			Total
	Units		Amount
Balance at January 1, 2019		10,000	$	600	$	266,264	$	762,334		$	1,029,198
Net income								9,338,162			9,338,162
Distributions to members								(8,839,270	)		(8,839,270	)
Balance at September 30, 2019		10,000	$	600	$	266,264	$	1,261,226		$	1,528,090

See Notes to Financial Statements.

F-75

Broadmark Real Estate Management II, LLC

Statements of Cash Flows (unaudited)

	Nine months ended
	September 30, 2019			September 30, 2018
Cash flows from operating activities
Net income	$	9,338,162		$	9,228,936
Adjustments to reconcile net income to net cash used in operations:
Compensation expense related to restricted units		–			11,094
Changes in operating assets and liabilities:
Change in fees receivable from escrow		778,909			205,594
Change in receivables from related parties		(712,943	)		(1,310	)
Change in other assets		126,461			(795,669	)
Change in accounts payable		(198,792	)		10,632
Change in related party payables		(94,591	)		(714,231	)
Change in payroll liabilities		48,390			–
Net cash from operating activities		9,285,596			7,945,046
Cash flows from financing activities
Distributions to members		(8,839,270	)		(7,379,712	)
Net cash used in financing activities		(8,839,270	)		(7,379,712	)
Net change in cash and cash equivalents		446,326			565,334
Cash and cash equivalents, beginning of period		1,114,173			819,611
Cash and cash equivalents, end of period	$	1,560,499		$	1,384,945

See Notes to Financial Statements.

F-76

Broadmark Real Estate Management II, LLC

Notes to Financial Statements

Note 1 - Organization and business

Broadmark Real Estate Management, LLC (the “Company”) is a Washington limited liability company formed on February 13, 2014. The Company operates under a Second Amended and Restated Limited Liability Company Agreement (the “Operating Agreement”) dated February 13, 2014. The Company will have perpetual existence unless terminated pursuant to the provisions of the Operating Agreement.

The primary purpose of the Company is to be the managing member of BRELF II, LLC (the “Fund”), a private real estate lending company, to manage the underwriting, closing, servicing, and disposition of mortgage notes, and perform all general and administrative duties. The primary purpose of the Fund is to make short-term, first position loans secured by deeds of trust on real estate in Colorado, Utah and Texas. Effective October 1, 2018 the Fund elected to be taxed as a real estate investment trust (“REIT”). As the manager of the Fund, the Company owns a separate class of common units in the Fund, the investors own preferred units.

Ownership rights of the Company are distributed amongst its Members through the issuance of 10,000 Class A Units which as of September 30, 2019 remain outstanding.

Note 2 - Summary of significant accounting policies

Basis of accounting

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Cash

The Company maintains cash in a demand deposit account with a bank. The bank balance may, at times, exceed federally insured limits.

Fees receivable from escrow

Fees receivable from escrow represents fee revenue generated from loans which closed prior to September 30, 2019 and December 31, 2018 but were not received until after the respective periods ended.

Revenue recognition

The Company derives revenue from three sources.

Second, the company receives a monthly management fee from the Fund for ongoing loan servicing. This distribution is defined in the BRELF II LLC Operating Agreement as 20% of “Distributable Income”.

Distributable Income is interest income received in the fund, less operating expenses and less any portion of interest income used to pay the guaranteed minimum return of 0.05% monthly to the preferred unit holders of the Fund when the Funds 20% of fee-based income is not sufficient to fund the guaranteed minimum payment. The distributions are disclosed on the Statements of Income. The receipt of the Distributable Income by the Company is when revenue is considered earned and recognized.

Third, the Company also receives 100% of inspection fees, which the Company uses to hire independent inspectors to report on the status of construction projects. These fees are earned and recognized upon each construction draw request.

F-77

Broadmark Real Estate Management II, LLC

Notes to Financial Statements

Share based compensation

The Company expenses the fair value of restricted unit awards granted to our employees over the period each award vests. There were 1500 units granted during 2014 at $178 per unit, which vested ratably over 48 months. The fair value of restricted unit awards is equal to the fair value of the Company’s units at the date of grant. The units were valued using an internal model with market inputs available on the date of grant. There were no unrecognized compensation costs related to non-vested restricted unit awards at September 30, 2019 or December 31, 2018.

Advertising costs

Advertising costs are expensed as incurred or over the period of the campaign/promotion and are not significant.

Use of estimates

Accordingly, actual results could differ from those estimates.

Subsequent events

The Company has evaluated subsequent events through the date that the financial statements were issued, see Note 6.

Note 3 - Recent accounting pronouncements

Note 4 - Expenses

The Company is responsible for all the operating expenses of the Fund, including loan origination and servicing, with the exception of specific legal, audit and tax preparation and consulting fees, excise taxes and certain bank charges which the Fund absorbs. Under a cost sharing agreement, the Company pays a related entity for performing the majority of the loan servicing and related payroll and general and administrative costs, in exchange for a monthly fee, currently charged at a rate of 0.0006 multiplied by monthly assets under management for the Fund.

Note 5 - Related party transactions

Under an Investment Advisory Agreement dated March 1, 2014, Broadmark Capital LLC raises capital for the Fund. Under this agreement, Broadmark Capital is paid a commission from the Company of 1% in the month the capital is raised, and after 12 months also receives a “tail” commission of ½% per year, payable in quarterly installments. The commissions to Broadmark Capital are paid by the Company and disclosed on the Statement of Income. The entity that owns Broadmark Capital LLC is also a member of the Company.

The Company also reimburses Pyatt Broadmark Management, LLC, a related entity, for services performed. See Note 4.

F-78

Broadmark Real Estate Management II, LLC

Notes to Financial Statements

Note 6 - Subsequent Events

On August 9, 2019, the Company entered into a definitive agreement with Trinity Merger Corp. to effectuate a business combination transaction which will combine the Company, Fund, Pyatt Broadmark Management, LLC, Broadmark Real Estate Management III, LLC, Broadmark Real Estate Management IV, LLC, PBRELF I, LLC, BRELF III, LLC, and BRELF IV, LLC into a publicly-traded internally managed Mortgage REIT. The transaction received investor and regulatory approval and closed on November 14, 2019.

F-79

Broadmark Real Estate Management III, LLC

Statements of Assets, Liabilities and Members’ Equity (unaudited)

	As of September 30, 2019			As of December 31, 2018
Assets
Cash	$	197,026		$	69,247
Due from related party		41,972			22,952
Other assets		–			635
Total assets	$	238,998		$	92,834
Liabilities and Members’ Equity
Liabilities
Payroll liabilities	$	2,168		$	1,419
Accounts payable		1,678			9,323
Related party payables		22,180			187,371
Total liabilities		26,026			198,113
Members’ equity
Class A units
10,000 units issued and 8,968 and 8,875 outstanding as of September 30, 2019 and December 31, 2018		200			200
Additional paid in capital		423,400			241,943
Accumulated deficit		(210,628	)		(347,422	)
Members’ equity		212,972			(105,279	)
Total liabilities and members’ equity	$	238,998		$	92,834

See Notes to Financial Statements.

F-80

Broadmark Real Estate Management III, LLC

Statements of Operations (unaudited)

	Nine months ended
	September 30, 2019		September 30, 2018
Revenues
Fee income	$	741,437	$	289,739
Distributions from Fund		153,236		32,717
Total revenue		894,673		322,456
Expenses
Compensation		365,118		323,946
Commissions to Broadmark Capital LLC		127,660		87,206
General and administrative		140,457		71,055
Legal, audit, insurance		95,544		48,764
Inspection fees		29,100		5,050
Total expenses		757,879		536,021
Net income (loss)	$	136,794	$	(213,565	)

See Notes to Financial Statements.

F-81

Broadmark Real Estate Management III, LLC

Statements of Changes in Members’ Equity (unaudited)

	Class A units				Additional paid in capital		Accumulated deficit			Total
	Units		Amount

Balance at January 1, 2018		8,500	$	200	$	–	$	(62,606	)	$	(62,406	)
Net loss								(213,565	)		(213,565	)
Compensation expense related to restricted units		1,500				181,457		–			181,457
Distributions to members								(1,834	)		(1,834	)
Balance at September 30, 2018		10,000	$	200	$	181,457	$	(278,005	)	$	(96,348	)

	Class A units				Additional paid in capital		Accumulated deficit			Total
	Units		Amount
Balance at January 1, 2019		10,000	$	200	$	241,943	$	(347,422	)	$	(105,279	)
Net income								136,794			136,794
Compensation expense related to restricted units		–				181,457		–			181,457
Distributions to members								–			–
Balance at September 30, 2019		10,000	$	200	$	423,400	$	(210,628	)	$	212,972

See Notes to Financial Statements.

F-82

Broadmark Real Estate Management III, LLC

Statements of Cash Flows (unaudited)

	Nine months ended
	September 30, 2019			September 30, 2018
Cash flows from operating activities
Net income (loss)	$	136,794		$	(213,565	)
Adjustments to reconcile net income to net cash used in operations:
Compensation expense related to restricted units		181,457			181,457
Changes in operating assets and liabilities:
Change in due from related party		(14,014	)		–
Change in other assets		(4,371	)		–
Change in accounts payable		(7,645	)		4,146
Change in related party payables		(165,191	)		109,282
Change in payroll liabilities		749			82
Net cash from operating activities		127,779			81,402
Cash flows from investing activities
Investments in fixed assets		–			(635	)
Net cash used in investing activities		–			(635	)
Cash flows from financing activities		–
Distributions to members		–			(1,834	)
Net cash used in financing activities		–			(1,834	)
Net change in cash and cash equivalents		127,779			78,933
Cash and cash equivalents, beginning of period		69,247			11,466
Cash and cash equivalents, end of period	$	197,026		$	90,399

See Notes to Financial Statements.

F-83

Broadmark Real Estate Management III, LLC

Notes to Financial Statements

Note 1 - Organization and business

Broadmark Real Estate Management III, LLC (the “Company”) is a Washington limited liability company formed on September 11, 2017. The Company operates under a Second Amended and Restated Limited Liability Company Agreement (the “Operating Agreement”) dated October 1, 2017. The Company will have perpetual existence unless terminated pursuant to the provisions of the Operating Agreement.

The primary purpose of the Company is to be the managing member of BRELF III, LLC (the “Fund”), a private real estate lending company, to manage the underwriting, closing, servicing, and disposition of mortgage notes, and perform all general and administrative duties. The primary purpose of the Fund is to make short-term, first position loans secured by deeds of trust on real estate in the South East United States. The Company began operating in October of 2017 although the Fund was not active until 2018. Effective January 1, 2019 the Fund elected to be taxed as a real estate investment trust (“REIT”). As the manager of the Fund, the Company owns a separate class of common shares in the Fund, the investors own Preferred Shares.

Ownership rights of the Company are distributed amongst its Members through the issuance of 10,000 Class A Units which as of September 30, 2019, 8,969 remain outstanding.

Note 2 - Summary of significant accounting policies

Basis of accounting

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Cash

The Company maintains cash in a demand deposit account with a bank. The bank balance may, at times, exceed federally insured limits.

Due to or from related parties

Amounts due to or from related parties include unpaid manager distributions, unpaid extension and inspection fees, amounts advanced from Pyatt Broadmark Management, LLC, and amounts owed by Members to the Company.

Income taxes

Revenue Recognition

The Company derives revenue from three sources.

First, the Company sources, underwrites and closes loans for the Fund, and is paid 80% of all origination, extension and amendment fees. These fees are earned and recognized in full when the loan is originated, or the loan amendment is signed.

Second, the company receives a monthly management fee from the Fund for ongoing loan servicing. This distribution is defined in the BRELF III LLC Operating Agreement as 20% of “Distributable Income”. Distributable Income is interest income received in the Fund, less operating expenses and less any portion of interest income used to pay the guaranteed minimum return of 0.05% monthly to the preferred unit holders of the Fund when the Funds 20% of fee-based income is not sufficient to fund the guaranteed minimum payment. The distributions are disclosed on the Statements of Income. The receipt of the Distributable Income by the Company is when revenue is considered earned and recognized.

F-84

Broadmark Real Estate Management III, LLC

Notes to Financial Statements

Share based compensation

The Company expenses the fair value of restricted unit awards granted to our employees over the period each award vests. There were 1500 units granted on January 1, 2018 at $645 per unit, which vest ratably over 48 months. The fair value of restricted unit awards is equal to the fair value of the Company’s units at the date of grant. The units were valued using an internal model with market inputs available on the date of grant. As of September 30, 2019 and December 31, 2018, there was $544,371 and $725,828, respectively, of total unrecognized compensation cost related to non-vested restricted unit awards.

Advertising costs

Advertising costs are expensed as incurred or over the period of the campaign/promotion and are not significant.

Use of estimates

Subsequent events

The Company has evaluated subsequent events through the date that the financial statements were issued, see Note 6.

Note 3 - Recent accounting pronouncements

Note 4 - Expenses

Loan Servicing services for the company are largely performed by a related party, Pyatt Broadmark Management, LLC (“PBM”). The Company reimburses PBM for these costs, currently at a rate of 0.0006 multiplied by monthly assets under management for the Fund.

Note 5 - Related party transactions

Under an Investment Advisory Agreement dated October 10, 2017, Broadmark Capital LLC raises capital for the Fund. Under this agreement, Broadmark Capital, LLC is paid a commission from the Company of 1% in the month the capital is raised, and after 12 months also receives a “tail” commission of ½% per year, payable in quarterly installments. The commissions to Broadmark Capital are paid by the Company and disclosed on the Statement of Operations. The entity that owns Broadmark Capital, LLC is also a member of the Company.

F-85

Broadmark Real Estate Management III, LLC

Notes to Financial Statements

The Company also reimburses Pyatt Broadmark Management, LLC, a related entity, for services performed. See Note 4.

Note 6 - Subsequent Events

On August 9, 2019, the Company entered into a definitive agreement with Trinity Merger Corp. to effectuate a business combination transaction which will combine the Company, Fund, Pyatt Broadmark Management, LLC, Broadmark Real Estate Management II, LLC, Broadmark Real Estate Management IV, LLC, PBRELF I, LLC, BRELF II, LLC, and BRELF IV, LLC into a publicly-traded internally managed Mortgage REIT. The transaction received investor and regulatory approval and closed on November 14, 2019.

F-86

Broadmark Real Estate Management IV, LLC

Statement of Assets, Liabilities and Members’ Deficit (unaudited)

	As of September 30, 2019
Assets
Cash	$	5,099
Accounts receivable		12,000
Due from related party		18,146
Other assets		5,218
Total assets	$	40,463
Liabilities and Members’ Deficit
Liabilities
Accounts payable	$	117
Related party payables		180,077
Total liabilities		180,194
Members’ deficit
Class A units
1,000 units issued and outstanding as of September 30, 2019		200
Additional paid in capital		292,920
Accumulated deficit		(432,851	)
Members’ deficit		(139,731	)
Total liabilities and members’ deficit	$	40,463

See Notes to Financial Statements

F-87

Broadmark Real Estate Management IV, LLC

Statement of Operations (unaudited)

	Nine months ended September 30, 2019
Revenue
Fee income	$	90,312
Distributions from Fund		10,292
Total revenue		100,604
Expense
Compensation		399,962
Commissions to Broadmark Capital LLC		35,431
Professional fees		85,373
General and administrative		12,104
Inspection fees		585
Total expenses		533,455
Net Loss	$	(432,851	)

See Notes to Financial Statements

F-88

Broadmark Real Estate Management IV, LLC

Statement of Changes in Members’ Deficit (unaudited)

	Class A units				Additional paid in capital		Accumulated deficit			Total
	Units		Amount
Balance at January 1, 2019		–	$	–	$	–	$	–		$	–
Net loss								(432,851	)		(432,851	)
Compensation expense related to restricted units		150				292,920		–			292,920
Contributions		850		200				–			200
Balance at September 30, 2019		1,000	$	200	$	292,920	$	(432,851	)	$	(139,731	)

See Notes to Financial Statements

F-89

Broadmark Real Estate Management IV, LLC

Statement of Cash Flows (unaudited)

	Nine months ended September 30, 2019
Cash flows from operating activities
Net loss	$	(432,851	)
Adjustments to reconcile net income to net cash used in operations:
Compensation expense related to restricted units		292,920
Changes in operating assets and liabilities:
Change in accounts receivable		(12,000	)
Change due from related party		(18,146	)
Change in other assets		(5,218	)
Change in accounts payable		117
Change in related party payables		180,077
Net cash from operating activities		4,899
Cash flows from financing activities
Contributions from members		200
Net cash used in financing activities		200
Net change in cash and cash equivalents		5,099
Cash and cash equivalents, beginning of period		–
Cash and cash equivalents, end of period	$	5,099

See Notes to Financial Statements

F-90

Broadmark Real Estate Management IV, LLC

Notes to Financial Statements

September 30, 2019

Note 1 - Organization and business

Broadmark Real Estate Management IV, LLC (the “Company”) is a Washington limited liability company formed on January 1, 2019. The Company operates under a Limited Liability Company Agreement (the “Operating Agreement”) dated January 1, 2019. The Company will have perpetual existence unless terminated pursuant to the provisions of the Operating Agreement.

The purpose of the Company is to serve as manager of BRELF IV, LLC (the “Fund”), a private real estate lending company, to manage the underwriting, closing, servicing, and disposition of mortgage notes, and perform all general and administrative duties. The primary purpose of the Fund is to make short-term, first position loans secured by deeds of trust on real estate in Maryland, Pennsylvania, Virginia, and the District of Columbia.

Ownership rights of the Company are distributed amongst its Members through the issuance of 1000 Class A Units, which as of September 30, 2019, 875 remain outstanding.

Note 2 - Summary of significant accounting policies

Basis of accounting

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Cash

The Company maintains cash in a demand deposit account with a bank. The bank balance may, at times, exceed federally insured limits.

Fees receivable from escrow

Fees receivable from escrow represents fee revenue generated from loans which closed prior to December 31 but were not received until after the period ended. There were no fees receivable from escrow at September 30, 2019.

Income taxes

Revenue recognition

The Company derives revenue from three sources.

Second, the Company receives a monthly distribution from the Fund. This distribution is defined in the BRELF IV, LLC Operating Agreement as 20% of “Distributable Cash” less any portion of interest income used to pay the preferred return of 0.05% monthly to the preferred unit holders of the Fund when the Fund’s share of fee-based income is less than the amount required to satisfy the preferred return. The distributions are disclosed on the Statements of Operations. The receipt of the monthly distribution by the Company is when revenue is considered earned and recognized.

F-91

Broadmark Real Estate Management IV, LLC

Notes to Financial Statements

September 30, 2019

Share based compensation

The Company expenses the fair value of restricted unit awards granted to our employees over the period each award vests. There were 150 units granted during 2019 at $11,717 per unit, which vest ratably over 48 months. The fair value of restricted unit awards is equal to the fair value of the Company’s units at the date of grant. The units were valued using an internal model with market inputs available on the date of grant. As of September 30, 2019, there was $1,464,602 of total unrecognized compensation cost related to non-vested restricted unit awards.

Advertising costs

Advertising costs are expensed as incurred or over the period of the campaign/promotion and are not significant.

Use of estimates

Subsequent events

The Company has evaluated subsequent events through the date that the financial statements were issued, see Note 5.

Note 3 - Recent accounting pronouncements

The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued, has assessed them, and either determined them to be not applicable or expected to have minimal impact on financial statements.

Note 4 - Expenses

Note 5 - Subsequent Events

On August 9, 2019, the Company entered into a definitive agreement with Trinity Merger Corp. to effectuate a business combination transaction which will combine the Company, Fund, Pyatt Broadmark Management, LLC, Broadmark Real Estate Management II, LLC, Broadmark Real Estate Management III, LLC, Broadmark Real Estate Management IV, LLC, PBRELF I, LLC, BRELF II, LLC, BRELF III, LLC, and BRELF IV, LLC into a publicly-traded internally managed Mortgage REIT. The transaction received investor and regulatory approval and closed on November 14, 2019.

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma combined statements of operations for the nine months ended September 30, 2019 and for the year ended December 31, 2018 are based on the historical financial statements of Trinity and the Company Group after eliminating any inter-company activity of the Company Group (Pro Forma Companies and Manager) and giving pro forma effect to the transactions described in the Merger Agreement (Pro Forma Broadmark Realty) as if they had been completed on January 1, 2018. The following unaudited pro forma condensed combined balance sheets as of September 30, 2019 are based on the historical financial statements of Trinity and the Company Group after eliminating any inter-company transactions within the Company Group (Pro Forma Companies and Management Companies and giving pro forma effect to the transactions described in the Merger Agreement (Pro Forma Broadmark Realty), as if they had been completed on that date.

The following unaudited pro forma combined financial information gives effect to the Business Combination, which consists of the series of transactions pursuant to the Merger Agreement. For accounting and financial reporting purposes, the Business Combination will be accounted for in part as a recapitalization and in part as several acquisitions in accordance with FASB ASC 805 pursuant to which BRELF II will be the accounting acquirer and Trinity, MgCo I, MgCo II, MgCo III, MgCo IV, PBRELF I, BRELF III and BRELF IV will be accounting acquirees. In determining which entity would be the accounting acquirer, management concluded it is BRELF II since it is the largest entity by assets, revenue, and income, and its members will have the largest percentage of voting rights in the combined entity.

The transaction as it relates to Trinity’s interest was deemed a recapitalization primarily because Trinity does not meet the definition of a business acquirer under the accounting standards, its investors will no longer retain control of the company after the Business Combination, by ownership percentage or board control, and its shareholders will continue only as passive investors. The acquisition accounting applies to the Companies and Management Companies, with the assets and liabilities recorded at their current fair market values. Due to the short-term nature of the assets and liabilities of the Companies and Trinity there are not material adjustments required to reflect fair market value. MgCo I, MgCo II, MgCo III and MgCo IV do not have significant assets and liabilities, which results in goodwill being recorded for the amount of fair value paid above the book value of these companies.

Subsequent to the completion of the series of Business Combination transactions, the existing Trinity shareholders hold a 20.2% equity interest and two seats on the board of directors (representing 23.8% of the board) in the newly combined company. The existing Company Group shareholders hold a 70.8% equity interest and two seats on the board of directors (representing 28.6% of the board), including the chairman of the board, in the newly combined company. Members of management of the Company Group will hold all of the senior executive positions of Broadmark Realty.

Each Company and each Management Company is a separate legal entity that has its own equity members. Each Company is supervised by a board of directors that has the authority to remove and replace the applicable Management Company, and each Company Group’s members have the ability to replace directors on the Company Group’s boards of directors. As a result, the historical financial statements of these entities are presented on a separate, not consolidated or combined basis.

The unaudited pro forma adjustments are based on information currently available. The unaudited pro forma combined statement of operations does not purport to represent, and is not necessarily indicative of, what the actual results of operations of the combined company would have been had the transactions in the Merger Agreement taken place on January 1, 2018, nor is it indicative of the consolidated results of operations of the combined company for any future period. The unaudited pro forma combined balance sheet does not purport to represent, and is not necessarily indicative of, what the actual financial condition of the combined company would have been had the transactions in the Merger Agreement taken place on September 30, 2019, nor is it indicative of the consolidated financial condition of the combined company as of any future date.

The unaudited pro forma combined financial information should be read in conjunction with the sections of the Prospectus entitled “Trinity’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “PBRELF I’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “MgCo I’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “BRELF II’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “MgCo II’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “BRELF III’s’ Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “MgCo III’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “BRELF IV’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “MgCo IV’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and notes thereto of Trinity and the Company Group included therein.

The unaudited pro forma combined financial information has been prepared to illustrate the effect of the transactions in the Merger Agreement. It has been prepared for informational purposes only and is subject to a number of uncertainties and assumptions as described in the accompanying notes. The historical financial statements have been adjusted in the unaudited pro forma combined financial information to give effect to pro forma events that are directly attributable to the transactions in the Merger Agreement, that are factually supportable and, expected to have a continuing impact on the results of the Broadmark Realty.

The following unaudited pro forma condensed combined financial information reflects the actual redemption of 7,899,028 shares of Trinity common stock in conjunction with the stockholder vote on the Business Combination contemplated by the Merger Agreement at the Special Meeting held on November 12, 2019, and the redemption of approximately $100.0 million of Company Preferred AUM in conjunction with Companies’ preferred unitholder’s last quarterly redemption opportunity on October 1, 2019, for the periods ending September 30, 2019 and December 31, 2018:

Unaudited Pro Forma Condensed Combined Companies Balance Sheet
As of September 30, 2019
($ in Thousands)

	PBRELF I			BRELF II			BRELF III		BRELF IV		Combined Companies
Assets
Mortgage notes receivable, net	$	325,213		$	460,300		$	16,766	$	2,667	$	804,946
Cash and cash equivalents		131,437			60,728			6,511		937		199,613
Interest and fees receivable		1,854			773			28		3		2,658
Investment in real estate property, net		7,824			—			—		—		7,824
Other receivables		1,853			—			—		—		1,853
Total	$	468,181		$	521,801		$	23,305	$	3,607	$	1,016,894
Liabilities
Accounts payable and accrued expenses	$	1,527		$	880		$	44		18	$	2,469
Dividends payable		3,470			4,618			184		30		8,302
Contributions received in advance		—			—			—		—		—
Total liabilities	$	4,997		$	5,498		$	228	$	48	$	10,771
Preferred units		466,886			516,340			23,074		3,559		1,009,859
Retained earnings (accumulated deficit)		(3,702	)		(37	)		3		0		(3,736	)
Members’ equity	$	463,184		$	516,303		$	23,077	$	3,559	$	1,006,123
Total liabilities and members’ equity	$	468,181		$	521,801		$	23,305	$	3,607	$	1,016,894

Unaudited Pro Forma Condensed Combined Management Companies Balance Sheet
As of September 30, 2019
($ in Thousands)

	MgCo I		MgCo II		MgCo III			MgCo IV			Combined Management Companies
Assets
Cash and cash equivalents	$	1,764	$	1,560	$	197		$	5		$	3,526
Due from related parties		1,654		713		42			18			2,427
Interest and fees receivable		180		2		—			12			194
Other assets		227		1		0			5			233
Total	$	3,825	$	2,276	$	239		$	40		$	6,380
Liabilities
Accounts payable and accrued expenses	$	156	$	379	$	2		$	0		$	537
Payroll liabilities		—		48		2			—			50
Related party payable		—		321		22			180			523
Total liabilities	$	156	$	748	$	26		$	180		$	1,110
Class A units		0		1		0			0			1
Class P units		—		—		—			—			—
Retained earnings (accumulated deficit)		2,675		1,261		(210	)		(433	)		3,293
Additional paid in capital		994		266		423			293			1,976
Members’ equity	$	3,669	$	1,528	$	213		$	(140	)	$	5,270
Total liabilities and members’ equity	$	3,825	$	2,276	$	239		$	40		$	6,380

Unaudited Pro Forma Condensed Combined Companies and Management Companies Balance Sheet
As of September 30, 2019
($ in Thousands)

	Combined Companies			Management Companies		Eliminations / Adjustments				Pro Forma Combined Company Group
Assets
Cash and cash equivalents	$	199,613		$	3,526	$	—			$	203,139
Mortgage notes receivable, net		804,946			—		—				804,946
Due from related parties		—			2,427		(2,427	)	(1a)		—
Interest and fees receivable		2,658			194		—				2,852
Investment in real estate property, net		7,824			—		—				7,824
Other receivables		1,853			—		—				1,853
Other assets		—			233		—				233
Total	$	1,016,894		$	6,380	$	(2,427	)		$	1,020,847
Liabilities
Accounts payable and accrued expenses	$	2,469		$	537	$	(1,904	)	(1a)	$	1,102
Payroll liabilities		—			50		—				50
Dividends Payable		8,302			—		—				8,302
Contributions received in advance		—			—		—				—
Related party payable		—			523		(523	)	(1a)		—
Total liabilities	$	10,771		$	1,110	$	(2,427	)		$	9,454
Preferred units	$	1,009,859			—		—			$	1,009,859
Common units		—			—		—				—
Class A units		—			1		—				1
Retained earnings (accumulated deficit)		(3,736	)		3,293		—				(443	)
Additional paid in capital		—			1,976		—				1,976
Members’ equity	$	1,006,123		$	5,270		—			$	1,011,393
Total liabilities and members’ equity	$	1,016,894		$	6,380	$	(2,427	)		$	1,020,847

Unaudited Pro Forma Condensed Combined Broadmark Realty Balance Sheet
As of September 30, 2019
($ in Thousands)

						Business Combination Adjustments							Redemption Adjustments
	Pro Forma Combined Company Group			Trinity		Pro Forma Adjustments for Business Combination				Broadmark Realty as Adjusted for Business Combination			Pro Forma Adjustments for Redemptions				Broadmark Realty as Adjusted for Redemptions
Assets
Cash and cash equivalents	$	203,139		$	149	$	360,197		(2a)	$	426,485			(82,470	)	(2j)	$	244,039
							75,000		(2b)					(99.976	)	(2k)
							(98,162	)	(2c)
							(93,787	)	(2d)
							(1,000	)	(2e)
							(15,525	)	(2f)
							(3,526	)	(2i)
Mortgage notes receivable, net		804,946			—		—				804,946			—				804,946
Due from related parties		—			—		—				—			—				—
Prepaid expenses		—			74		—				74			—				74
Interest and fees receivable		2,852			—		—				2,852			—				2,852
Investment in real estate property, net		7,824			—		—				7,824			—				7,824
Cash and marketable securities held in Trust Account		—			360,197		(360,197	)	(2a)		—			—				—
Other receivables		1,853			—		—				1,853			—				1,853
Other assets		233			—		—				233			—				233
Goodwill		—			—		162,500		(2c)		162,500			—				162,500
Total	$	1,020,847		$	360,420	$	25,500			$	1,406,767		$	(182,446	)		$	1,224,321
Liabilities
Accounts payable and accrued expenses	$	1,102		$	3,497		—			$	4,599			—			$	4,599
Payroll liabilities		50			—		—				50			—				50
Income taxes payable		—			5		—				5			—				5
Dividends payable		8,302			—		—				8,302			—				8,302
Contributions received in advance		—			—		—				—			—				—
Related party payable		—			1,000		(1,000	)	(2e)		—			—				—
Deferred underwriting fee payable		—			15,525		(15,525	)	(2f)		—			—				—
Total liabilities	$	9,454		$	20,027	$	(16,525	)		$	12,956			—			$	12,956
Common stock subject to possible redemption		—		$	335,393	$	(335,393	)	(2g)		—			—				—
Stockholders’ / members’ equity:
Preferred units		1,009,859			—		(1,009,859	)	(2h)		—			—				—
Common units		—			—		—				—			—				—
Class A units		1			—		(1	)	(2h)		—			—				—
Class P units		—			—		—				—			—				—
Class A common stock		—			0		(0	)	(2g)		—			—				—
Class B common stock		—			1		(1	)	(2g)		—			—				—
Common stock (Par value $0.01 per share)		—			—		393		(2g)		1,489			(79	)	(2j)		1,314
							72		(2b)					(96	)	(2k)		—
							62		(2c)		—			—				—
							962		(2h)		—			—				—
Retained earnings (accumulated deficit)		(443	)		2,898		(2,898	)	(2g)		(3,563	)		—				(3,563	)
							406		(2h)
							(3,526	)	(2i)
Additional paid in capital		1,976			2,101		(93,787	)	(2d)		1,395,885			(82,391	)	(2j)		1,213,614
							337,899		(2g)					(99,880	)	(2k)		—
							74,928		(2b)		—			—				—
							64,276		(2c)		—			—				—
							1,008,492		(2h)		—			—				—
Members’ equity	$	1,011,393		$	5,000	$	377,418			$	1,393,811		$	(182,446	)		$	1,211,365
Total liabilities and members’ equity	$	1,020,847		$	360,420	$	25,500			$	1,406,767		$	(182,446	)		$	1,224,321

Unaudited Pro Forma Condensed Combined Companies Statement of Operations
For the Nine Months Ended September 30, 2019
($ in Thousands)

	PBRELF I		BRELF II			BRELF III		BRELF IV		Combined Companies
Revenue
Interest income	$	31,506	$	36,190		$	1,565	$	102	$	69,363
Fee income		2,887		3,204			175		22		6,288
Total revenue	$	34,393	$	39,394		$	1,740	$	124	$	75,651
Expense
Provision for loan loss / (reversal)		2,944		(168	)		—		—		2,776
Real estate properties, net of gains		347		(168	)		—		—		179
Legal, audit, insurance		258		216			54		—		528
Excise taxes		232		—			—		—		232
Other		15		28			25		1		69
Total expenses	$	3,796	$	(92	)	$	79		1	$	3,784
Provision for income taxes		—		—			—		—		—
Net income	$	30,597	$	39,486		$	1,661	$	123	$	71,867

Unaudited Pro Forma Condensed Combined Management Companies Statement of Operations
For the Nine Months Ended September 30, 2019
($ in Thousands)

	MgCo I		MgCo II		MgCo III		MgCo IV			Combined Management Companies
Revenue
Fee income	$	11,614	$	12,840	$	741		90		$	25,285
Distributions from Company		3,100		4,002		153		10			7,265
Total revenue	$	14,714	$	16,842	$	894		100		$	32,550
Expense
Compensation		1,436		2,445		365		400			4,646
Commissions to Broadmark Capital LLC		2,437		2,671		128		35			5,271
G&A expense		273		1,335		140		12			1,760
Legal, audit, insurance		1,716		975		96		85			2,872
Excise taxes		209		—		—		—			209
Depreciation expense		34		—		—		—			34
Inspection fees		199		78		29		1			307
Other		6		—		—		—			6
Total expenses	$	6,310	$	7,504	$	758	$	533		$	15,105
Net income (loss)	$	8,404	$	9,338	$	136	$	(433	)	$	17,445

Unaudited Pro Forma Condensed Combined Companies and Management Companies Statement of Operations
For the Nine Months Ended September 30, 2019
($ in Thousands)

	Companies		Management Companies		Eliminations / Adjustments				Pro Forma Combined Company Group
Revenue
Interest income	$	69,363		—		—			$	69,363
Fee income		6,228	$	25,285		—				31,573
Distributions from Company		—		7,265	$	(7,265	)	(1a)		—
Total revenue	$	75,651	$	32,550	$	(7,265	)		$	100,936
Expense
Provision for loan loss / (reversal)		2,776		—		—				2,776
Real estate properties, net of gains		179		—		—				179
Compensation		—		4,646		—				4,646
Commissions to Broadmark Capital LLC		—		5,271		—				5,271
G&A Expense		—		1,760		—				1,760
Legal, audit, insurance		528		2,872		—				3,400
Excise taxes		232		209		—				441
Depreciation expense		—		34		—				34
Inspection fees		—		307		—				307
Other		69		6		—				75
Total expenses	$	3,784	$	15,105		—			$	18,889
Net income	$	71,867	$	17,445	$	(7,265	)		$	82,047

Unaudited Pro Forma Condensed Combined Broadmark Realty Statement of Operations
For the Nine Months Ended September 30, 2019
($ in Thousands)

						Business Combination Adjustments						Redemption Adjustments
	Pro Forma Combined Company Group		Trinity			Pro Forma Adjustments for Business Combination				Broadmark Realty As Adjusted for Business Combination		Pro Forma Adjustments for Redemptions				Broadmark Realty as Adjusted for Redemptions
Revenue
Interest income	$	69,363	$	6,120			—			$	75,483		—			$	75,843
Fee income		31,573		—			—				31,573		—				31,573
Total revenue	$	100,936	$	6,120			—			$	107,056		—			$	107,056
Expense
Provision for loan loss / (reversal)		2,776		—			—				2,776		—				2,776
Real estate properties, net of gains		179		—			—				179		—				179
Compensation		4,646		—			466		(3a)		5,112		—				5,112
Commissions to Broadmark Capital		5,271		—			(5,271	)	(3b)		—		—				—
G&A Expense		1,760		5,051			694		(3c)		7,505		—				7,505
Legal, audit, insurance		3,400		—			—				3,400		—				3,400
Excise taxes		441		—			—				441		—				441
Depreciation expense		34		—			—				34		—				34
Inspection fees		307		—			—				307		—				307
Other		75		—			—				75		—				75
Total expenses	$	18,889	$	5,051		$	(4,111	)		$	19,829		—			$	19,829
Provision for income taxes		—		1,316			—				1,316		—				1,316
Net income	$	82,047	$	(247	)	$	4,111			$	85,911		—			$	85,911
Shares of common stock outstanding	na			43,125			90,353				133,479		(17,475	)			116,004
Net income per share	na		$	(0.01	)	na				$	0.64	na			(3d)	$	0.74

Unaudited Pro Forma Condensed Combined Companies Statement of Operations
For the Year Ended December 31, 2018
($ in Thousands)

	PBRELF I			BRELF II		BRELF III		BRELF IV*		Combined Companies
Revenue
Interest income	$	31,795		$	26,084	$	550		—	$	58,429
Fee income		3,623			3,688		104		—		7,415
Total revenue	$	35,418		$	29,772	$	654		—	$	65,844
Expense
Provision for loan loss / (reversal)		1,616			167		—		—		1,783
Real estate properties, net of gains		(398	)		235		—		—		(163	)
Legal, audit, insurance		273			200		—		—		473
Excise taxes		115			—		—		—		115
Other		19			41		17		—		77
Total expenses	$	1,624		$	643	$	17		—	$	2,285
Provision for income taxes		—			—		90		—		90
Net income	$	33,794		$	29,129	$	547		—	$	63,469

*	Inception date of MgCo IV is Feb 28, 2019 and therefore has no financial information for the year ended Dec 31, 2018.

Unaudited Pro Forma Condensed Combined Management Companies Statement of Operations
For the Year Ended December 31, 2018
($ in Thousands)

	MgCo I		MgCo II		MgCo III			MgCo IV*		Combined Management Companies
Revenue
Fee income	$	14,719	$	14,855	$	428			—	$	30,003
Distributions from Company		3,454		3,102		60			—		6,616
Total revenue	$	18,174	$	17,957	$	489			—	$	36,619
Expense
Compensation		1,645		1,850		450			—		3,945
Commissions to Broadmark Capital LLC		2,213		2,300		120			—		4,632
G&A expense		379		1,255		120			—		1,754
Legal, audit, insurance		504		97		66			—		668
Excise taxes		288		—		—			—		288
Depreciation expense		96		—		—			—		96
Inspection fees		206		118		15			—		339
Total expenses	$	5,332	$	5,620	$	770			—	$	11,722
Net income (loss)	$	12,842	$	12,337	$	(281	)		—	$	24,897

*	Inception date of MgCo IV is February 28, 2019 and therefore has no financial information for the year ended December 31, 2018.

Unaudited Pro Forma Condensed Combined Companies and Management Companies Statement of Operations
For the Year Ended December 31, 2018
($ in Thousands)

	Total Companies			Total Management Companies		Eliminations / Adjustments				Pro Forma Combined Company Group
Revenue
Interest income	$	58,429			—		—			$	58,429
Fee income		7,415			30,003		—				37,418
Distributions from Company		—			6,616		(6,616	)	(1b)		—
Total revenue	$	65,844		$	36,619	$	(6,616	)		$	95,846
Expense
Provision for loan loss / (reversal)		1,783			—		—				1,783
Real estate properties, net of gains		(163	)		—		—				(163	)
Compensation		—			3,945		—				3,945
Commissions to Broadmark Capital LLC		—			4,632		—				4,632
G&A expense		—			1,754		—				1,754
Legal, audit, insurance		473			668		—				1,140
Excise taxes		115			288		—				403
Depreciation expense		—			96		—				96
Inspection fees		—			339		—				339
Other		77			—		—				77
Total expenses	$	2,284		$	11,722		—			$	14,006
Provision for income taxes		90			—		—				90
Net income	$	63,469		$	24,897	$	(6,616	)		$	81,750

Unaudited Pro Forma Condensed Combined Broadmark Realty Statement of Operations

For the Year Ended December 31, 2018
($ in Thousands)

						Business Combination Adjustments							Redemption Adjustments
	Pro Forma Combined Company Group			Trinity		Pro Forma Adjustments for Business Combination				Broadmark Realty as Adjusted for Business Combination			Pro Forma Adjustments for Redemptions				Broadmark Realty as Adjusted for Redemption
Revenue
Interest income	$	58,429		$	4,534		—			$	62,963			—			$	62,963
Fee income		37,418			—		—				37,418			—				37,418
Total revenue	$	95,846		$	4,534		—			$	100,380			—			$	100,380
Expense
Provision for loan loss		1,783			—		—				1,783			—				1,783
Real estate properties, net of gains		(163	)		—		—				(163	)		—				(163	)
Compensation		3,945			—		621		(3a)		4,567			—				4,567
Commissions to Broadmark Capital		4,632			—		(4,632	)	(3b)		—			—				—
G&A expense		1,754			553		926		(3c)		3,232			—				3,232
Legal, audit, insurance		1,140			—		—				1,140			—				1,140
Excise taxes		403			—		—				403			—				403
Depreciation expense		96			—		—				96			—				96
Inspection fees		339			—		—				339			—				339
Other		77			—		—				77			—				77
Total expenses	$	14,006		$	553	$	(3,085	)		$	11,474			—			$	11,474
Provision for income taxes		90			836		—				926			—				926
Net income	$	81,750		$	3,145	$	3,085			$	87,980			—			$	87,980
Shares of common stock outstanding	na				43,125		61,007				104,132			(17,597	)			86,535
Net income per share	na			$	0.07	na				$	0.84		na			(3d)	$	1.02

Note 1. Basis of Presentation:

Overview:

The pro forma adjustments have been prepared as if the Business Combination had been consummated on September 30, 2019 in the case of the unaudited pro forma condensed combined balance sheet and on January 1, 2018, the beginning of the earliest period presented, in the case of the unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2019 and the year ended December 31, 2018.

On the Closing Date, the Company consummated the previously announced Business Combination, following the Special Meeting, where the stockholders of Trinity considered and approved, among other matters, a proposal to adopt the Merger Agreement, by and among the Trinity Parties and the Company Group entities, and approve the transactions contemplated by the Merger Agreement. Pursuant the terms and subject to the conditions set forth in the Merger Agreement, (i) Merger Sub I merged with and into Trinity, with Trinity being the surviving entity of the Trinity Merger, (ii) immediately following the Trinity Merger, each of the Broadmark Companies merged with and into Merger Sub II, with Merger Sub II being the surviving entity of the Company Merger, and (iii) immediately following the Company Merger, each of the Management Companies merged with and into Trinity, with Trinity being the surviving entity of the Management Company Merger, and, as a result, Merger Sub II and Trinity became wholly owned subsidiaries of the Company. In connection with the consummation of the business combination, the Company was renamed Broadmark Realty Capital Inc. For a description of the Business Combination and the Merger Agreement, see the sections of the Prospectus entitled “Summary of the Joint Proxy Statement/Prospectus—Parties to the Business Combination” beginning on page 1 of the Prospectus, “Summary of the Joint Proxy Statement/Prospectus—The Business Combination” beginning on page 2 of the Prospectus, “The Business Combination” beginning on page 62, and “The Merger Agreement” beginning on page 87 of the Prospectus.

The Business Combination will be accounted for in part as a recapitalization and in part as several business acquisitions in accordance with ASC 805; with BRELF II being the accounting acquirer of the remaining Companies, the Management Companies and Trinity. Upon closing the Business Combination preferred unit holders of the Companies will be issued common stock of Broadmark Realty at a conversion price deemed substantially equivalent to the Companies member’s equity, which approximates the fair market value of their interests.

Total consideration under ASC 805 was $162.5 million, consisting of $152.5 million of consideration for the Management Companies paid $91.2 million in cash and $61.3 million of Broadmark Realty common stock, and, payment of $10 million of fees and expenses related to the termination of certain referral agreements the Management Companies have in place with a related entity, Broadmark Capital, which is excluded from this acquisition. Broadmark Capital was paid by $7 million in cash and $3 million of Broadmark Realty common stock. For financial reporting and accounting purposes in accordance with ASC 805, MgCo I, MgCo II, MgCo III, and MgCo IV are deemed acquired entities by BRELF II, and accordingly the assets and liabilities are recorded at their fair market value. Due to the limited nature of balance sheet accounts, the majority of the fair market value adjustments relates to the recording of goodwill ($162.5 million will be paid to the owners of MgCo I, MgCo II, MgCo III, and MgCo IV).

For the pro forma condensed combined balance sheet and statements of operations for the nine months ended September 30, 2019, total shares of Broadmark Realty common stock were determined using an assumed share price of $10.44, which reflects the value of the funds held in the Trust Account per share of Trinity Class A common stock, as of September 30, 2019.

For the pro forma condensed combined statements of operations for the year ended December 31, 2018, total shares of Broadmark Realty common stock were determined using an assumed share price of $10.31, which reflects the value of the funds held in the Trust Account per share of Trinity Class A common stock, as of December 31, 2018.

Upon closing the Business Combination, and following actual redemptions of approximately 7.9 million shares, the owners of shares of Trinity Class A common stock were issued 26.6 million shares (on a one-for-one basis) of Broadmark Realty common stock valued at $277.7 million based upon the assumed share price of $10.44 at September 30, 2019, and valued at $274.2 million based upon the assumed share price of $10.31 at December 31, 2018.

Upon closing the Business Combination, the owners of shares of Trinity Class B common stock were issued 4.8 million shares of Broadmark Realty common stock valued at $50.4 million based upon the assumed share price of $10.44 at September 30, 2019, and valued at $49.7 million based upon the assumed share price of $10.31 at December 31, 2018.

For the purposes of the pro forma condensed combined financial statements, the Companies and Management Companies have been prepared to reflect the combined historical pro forma operations of the Company Group. Below represents adjustments to the unaudited pro forma combined Companies and Management Companies balance sheet and statements of operations adjustments:

1(a) Represents elimination of related party entries.

1(b) Represents elimination of distributions paid from Companies to Management Companies.

Note 2. Unaudited pro forma combined balance sheet adjustments

The unaudited pro forma condensed combined balance sheet as of September 30, 2019 of Broadmark Realty reflects the following adjustments assuming the Business Combination occurred on the same date.

2(a) Represents release of cash and marketable securities held in trust account of Trinity to cash and cash equivalents, prior to redemptions.

2(b) Represents $75.0 million of proceeds raised through the Private Placement, as defined in the Merger Agreement, issuance of 7.2 million shares (based upon an assumed share price of $10.44) of Broadmark Realty common stock in connection with the Business Combination.

2(c) Total consideration under ASC 805 of $162.5 million, consisting of $152.5 million in consideration paid for the Management Companies and payment of $10 million in fees and expenses related to the termination of certain referral agreements. The consideration paid for the Management Companies consists of cash consideration of $91.2 million and the issuance of approximately 5.9 million shares of Broadmark Realty common stock valued at $61.3 million (based upon an assumed share price of $10.44 per share) to equity owners of the Management Companies. The consideration paid for the fees and expenses related to the termination of certain referral agreements consists of cash consideration of $7.0 million and the issuance of approximately 287 thousand shares of Broadmark Realty common stock valued at $3.0 million (based upon an assumed share price of $10.44 per share) to equity owners of the Management Companies. At the closing of the Merger Agreement, the Management Companies will have immaterial net book values, with no material tangible assets and the total consideration paid of $162.5 million will be recorded as goodwill.

The $64.3 million increase in additional paid in capital is comprised of the $162.5 million of goodwill less the $91.2 million of cash paid for the Management Companies and $7.0 million of cash paid for contract termination fees and expenses, less $64.3 million of stock issued to equity owners of the Management Companies at par value of $0.01 per share.

The following table provides an estimate of the allocation of fair market value being paid for the Management Companies. Since BRELF II has been deemed the accounting acquirer, the equity issued in exchange for members preferred units in the Companies will be recorded as direct reduction of additional paid in capital. As outlined in the table below, MgCo I, MgCo II, MgCo III, and MgCo IV have no tangible book value resulting in goodwill being recorded for the total consideration being paid.

Purchase Price Allocation⁽¹⁾	Allocation (%)			Purchase Price		Tangible Book Value⁽²⁾		Goodwill
MgCo I		48.5	%	$	78,869	$	—		78,869
MgCo II		49.6	%	$	80,552	$	—	$	80,552
MgCo III		1.8	%	$	2,970	$	—	$	2,970
MgCo IV		0.1	%	$	108	$	—	$	108
Total		100.0	%	$	162,500	$	—	$	162,500

(1)

The purchase price allocation is dependent upon certain valuation and other studies that have not yet been completed. Accordingly, the pro forma purchase price allocation is subject to further adjustments as additional information becomes available and as additional analyses and final valuations are conducted following the completion of the business combination. There can be no assurances that these additional analyses and final valuations will not result in significant changes to the estimates of fair value set forth below.

(2)	After a pre-closing final liquidating distribution by the Management Companies (see adjustment 2(i)), the Management Companies will have immaterial net book values.

2(d) Represents the payment of estimated costs related to the transactions outlined in the Merger Agreement and the Warrant Cash Payment paid to warrant holders in connection with the Warrant Amendment. The following table provides a breakout between the transaction costs and the Warrant Cash Payment.

Transaction Costs	Amount
Transaction costs	$	27,107
Warrant Cash Payment ($1.60 per public and PIPE warrant)	$	66,679
Total Transaction Costs	$	93,787

2(e) Represents the repayment of the $1.0 million Trinity Sponsor Loan, payable at the completion of the Business Combination.

2(f) Represents the payment of deferred underwriters’ fees of Trinity, payable at the completion of the Business Combination.

2(g) Represents the retirement of all shares of Trinity common stock, prior to redemptions, in exchange for the issuance of 39.3 million shares of Broadmark Realty common stock on a one-for-one share basis. Also represents the elimination of Trinity’s historical retained earnings in connection with the completion of the Business Combination.

BRELF II has been deemed the accounting acquirer of Trinity, and Trinity’s assets and liabilities are short-term in nature and their fair market value approximates historical cost, requiring no fair value adjustment to be recorded.

2(h) Represents the retirement of all preferred member units of the Companies in exchange for the issuance of 96.2 million shares of Broadmark Realty common stock (based upon an assumed share price of $10.44), and the retirement of all Class A units of the Management Companies in exchange for the consideration paid for the Management Companies. Also represents the elimination of the Broadmark Group's historical retained earnings, with the exception of the accounting acquirer, BRELF II, in connection with the completion of the Business Combination.

BRELF II has been deemed the accounting acquirer of the Companies. The Companies’ assets and liabilities are short-term in nature and their fair market value approximates historical cost, requiring no fair value adjustment to be recorded.

2(i) Represents the final liquidating distribution of the Management Companies’ pre-closing cash balance (100% of cash balance) of approximately $3.5 million.

2(j) Represents the actual redemption of 7,899,028 shares of Trinity Class A common stock by its stock holders, equating to approximately $82.5 million (based upon an assumed share price of $10.44).

2(k) Represents the approximately $100.0 million in redemptions of Company preferred AUM by the Companies’ unitholders in conjunction with the Companies’ preferred unitholder’s last quarterly redemption opportunity on October 1, 2019.

Note 3. Unaudited pro forma combined income statement adjustments

The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2019 and for the year ended December 31, 2018 and as of September 30, 2019 of Broadmark Realty reflects the following adjustments assuming the Business Combination occurred on January 1, 2018:

3(a) Represents additional compensation expense for Broadmark Capital employees to be hired by Broadmark Realty at the closing of the merger. The compensation amounts were previously incurred under financial advisory/investment banking agreements with Broadmark Capital as commissions to Broadmark Capital. The financial advisory/investment banking agreements with Broadmark Capital will be terminated at the closing of the Business Combination. (See adjustment 3b). The amounts are based upon actual annual historical amounts incurred by Broadmark Capital during the year end December 31, 2018.

3(b) Represents elimination of commissions to Broadmark Capital expenses incurred under four financial advisory/investment banking agreements with the Company Group, all of which will be terminated at closing of the Business Combination.

3(c) Represents additional general and administrative expense to be incurred by Broadmark Realty at the closing of the merger. These amounts were previously incurred under a cost sharing agreement with Broadmark Capital and included in commissions to Broadmark Capital expenses of which the cost sharing agreement will be terminated at the closing of the Business Combination and contractual obligations transferred to Broadmark Realty (See adjustment 3b). The amounts are based upon actual annual historical amounts incurred by Broadmark Capital during the year end December 31, 2018.

3(d) The pro forma basic and diluted net income per share calculations are based on the historical weighted average ordinary shares of Trinity and the issuance of additional ordinary shares in connection with the Business Combination, assuming the ordinary shares were outstanding since January 1, 2018. Shares issued to the Company Group are based on the average balance of Company Preferred AUM over the respective periods, the equity component of the Management Company consideration and payment related to the termination of certain referral agreements. As the Business Combination, including related proposed equity purchases, is being reflected as if it had occurred at the beginning of the period presented, the calculation of weighted average ordinary shares outstanding for basic and diluted net income (loss) per ordinary share assumes that the ordinary shares issuable in connection with the transactions have been outstanding for the entire period presented. This calculation is retroactively adjusted to eliminate the 7,899,028 shares of Trinity common stock redeemed in conjunction with the stockholder vote on the Business Combination contemplated by the Merger Agreement at the Special Meeting held on November 12, 2019, and the redemption of approximately $100.0 million of Company Preferred AUM in conjunction with Companies’ preferred unitholder’s last quarterly redemption opportunity on October 1, 2019, for the entire periods. No additional instruments were considered to be dilutive and therefore have not been included within the weighted average ordinary share calculation.

TRINITY MERGER CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References in this Trinity Merger Corp. Management’s Discussion and Analysis of Financial Condition and Results of Operations (this “Trinity MD&A”) to the “Company,” “our,” “us” or “we” refer to Trinity Merger Corp. References to our “management” or our “management team” refer to our officers and directors, references to the “Sponsor” refers to HN Investors LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this Trinity MD&A. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Trinity MD&A includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Trinity MD&A regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “will,” “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

We are a blank check company incorporated on January 24, 2018 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On May 17, 2018, we closed our Initial Public Offering with the sale of 34,500,000 Units, generating gross proceeds of $345,000,000. Although we are not limited to a particular industry or sector for purposes of consummating a Business Combination, we are focusing our search on acquiring an operating company or business with a real estate component (such as a business within the hospitality, lodging, gaming, real estate or property services, or asset management industries).

We intend to effectuate our Business Combination using cash from the proceeds of our Initial Public Offering and the sale of the Private Placement Warrants that occurred simultaneously with the completion of our Initial Public Offering, our capital stock, debt or a combination of cash, stock and debt.

We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.

On August 9, 2019, we entered into the Merger Agreement to effect a business combination with PubCo, Merger Sub I and Merger Sub II; the Broadmark Companies; and the Management Companies.

On August 9, 2019, PubCo entered into a subscription agreement with the PIPE Investors, pursuant to which it will issue and sell to the PIPE Investors approximately $75.0 million of its common stock immediately prior to the consummation of the business combination.

On August 9, 2019, the Company entered into a promissory note with the Sponsor. The aggregate principal amount of the promissory note is $1,000,000. Proceeds will be used to pay the Company’s business combination transaction expenses. The promissory note is payable at the earlier of the closing of the business combination and the liquidation of Company prior to the consummation of the Company’s initial business combination.

See Note 6 in Item 1 above for a description of the Merger Agreement, the PIPE Investment and the transactions contemplated thereby.

On November 12, 2019, we announced that Trinity’s stockholders approved the Business Combination and that Trinity’s warrant holders approved the previously announced amendment to Trinity’s public warrants.

On November 17, 2019, we announced the completion of our previously announced Business Combination. In connection with the completion of the Business Combination, Broadmark Realty Capital Inc.’s shares of common stock began trading on the New York Stock Exchange on November 15, 2019 under the ticker symbol “BRMK”, and its warrants, exercisable for one-quarter of one share at an exercise price of $2.875 per one-quarter share ($11.50 per whole share), began trading on that date on the NYSE Amex under the ticker symbol “BRMK WS”. In light of the closing of the Business Combination, Trinity canceled the special meeting of Trinity’s stockholders that had been previously scheduled for November 15, 2019 to vote on an amendment to its certificate of incorporation to extend the deadline to complete Trinity’s initial business combination.

Results of Operations

Our only activities from inception to September 30, 2019 were organizational activities, those necessary to prepare for our Initial Public Offering and identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on cash and marketable securities held after the Initial Public Offering. We are incurring expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for expenses in connection with pursuing a Business Combination.

For the three months ended September 30, 2019, we had net loss of $1,646,737, which consists of operating costs of $3,129,871 and a provision for income taxes of $375,168, offset by interest income on marketable securities held in the Trust Account of $1,858,302.

For the nine months ended September 30, 2019, we had net loss of $246,866, which consists of operating costs of $5,050,505 and a provision for income taxes of $1,316,125, offset by interest income on marketable securities held in the Trust Account of $6,119,764.

For the three months ended September 30, 2018, we had net income of $1,225,421, which consists of interest income on marketable securities held in the Trust Account of $1,820,909, offset by operating costs of $223,597 and a provision for income taxes of $371,891.

For the period from January 24, 2018 (inception) through September 30, 2018, we had net income of $1,665,746, which consists of interest income on marketable securities held in the Trust Account of $2,596,644, offset by operating costs of $406,603 and a provision for income taxes of $524,295.

Liquidity and Capital Resources

On May 17, 2018, we closed our Initial Public Offering of 34,500,000 Units, which includes the full exercise by the underwriters of their over-allotment option in the amount of 4,500,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $345,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 12,350,000 Private Placement Warrants to our Sponsor at a price of $1.00 per Private Placement Warrant, generating gross proceeds of $12,350,000.

Following the Initial Public Offering, a total of $351,900,000 was placed in the Trust Account. We incurred $19,880,231 in Initial Public Offering related costs, including $3,450,000 of underwriting fees, $15,525,500 of deferred underwriting fees and $905,231 of other costs.

As of September 30, 2019, we had cash and marketable securities held in the Trust Account of $360,197,326, substantially all of which is invested in U.S. treasury bills with an original maturity of 30 days or less. Interest income earned on the balance in the Trust Account may be available to us to pay taxes. During the nine months ended September 30, 2019, we withdrew approximately $1,556,000 of interest income to pay for our franchise and income taxes.

As of September 30, 2019, we had cash of approximately $149,000 held outside the Trust Account, which is available for use by us to cover the costs associated with identifying a target business, negotiating a Business Combination, due diligence procedures and other general corporate uses. In addition, as of September 30, 2019, we had accounts payable and accrued expenses of $3,496,840.

For the nine months ended September 30, 2019, cash used in operating activities amounted to $3,057,843. Net loss of $246,866 was affected by interest earned on marketable securities held in the Trust Account of $6,119,764. Changes in our operating assets and liabilities provided cash of $3,308,787.

For the period from January 24, 2018 (inception) through September 30, 2018, cash used in operating activities amounted to $866,307. Net income of $1,665,746 was offset by interest earned on marketable securities held in the Trust Account of $2,596,644. Changes in our operating assets and liabilities provided cash of $64,591.

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting commissions) to complete our initial Business Combination. We may withdraw interest to pay franchise and income taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the Trust Account is expected to be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, properties or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.

In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial Business Combination, our Sponsor, officers and directors or their respective affiliates may, but are not obligated to, loan us funds as may be required by us. If we complete our initial Business Combination, we would repay such loaned amounts. In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant, at the option of the lender. The warrants would be identical to the Private Placement Warrants.

We will need to raise additional capital through loans or additional investments from our sponsor, stockholders, officers, directors, or third parties. Our officers, directors and sponsor may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a going concern.

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2019. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative support. We began incurring these fees on May 14, 2018 and will continue to incur these fees monthly until the earlier of the completion of a Business Combination and the Company’s liquidation.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have not identified any critical accounting policies.

Recent accounting standards

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our condensed consolidated financial statements.

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates.

COMPANY GROUP MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis contains forward-looking statements and involves numerous risks and uncertainties, including those described under the heading “Risk Factors.” Actual results may differ materially from those contained in any forward-looking statements. You should read this discussion and analysis together with the consolidated financial statements and related notes included elsewhere in this Report for each of PBRELF I, BRELF II, BRELF III, BRELF IV and MgCo I, MgCo II, MgCo III and MgCo IV. In this “Company Group Management’s Discussion and Analysis of Financial Condition and Results of Operations,” references to the “Company Group,” refers to the Companies and the Management Companies and their respective subsidiaries, collectively.

PBRELF I, LLC. PBRELF I, LLC (“PBRELF I”) commenced operations in 2010 with a focus on originating loans in the Pacific Northwest region of the United States. PBRELF I is managed by Pyatt Broadmark Management, LLC (“MgCo I”). At September 30, 2019, PBRELF I had 119 loans outstanding with an aggregate face value of approximately $522.2 million.

BRELF II, LLC. BRELF II, LLC, referred to herein as “BRELF II,” commenced operations in 2014 with a focus on the Mountain West region of the United States. BRELF II is managed by Broadmark Real Estate Management II, LLC, referred to herein as “MgCo II.” At September 30, 2019, BRELF II had 108 loans outstanding with an aggregate face value of approximately $632.5 million.

BRELF III, LLC. BRELF III, LLC, referred to herein as “BRELF III,” commenced operations in 2018 with a focus on the Southeast region of the United States. BRELF III is managed by Broadmark Real Estate Management III, LLC, referred to herein as “MgCo III.” At September 30, 2019, BRELF III had 38 loans outstanding with an aggregate face value of approximately $28.9 million.

BRELF IV, LLC. BRELF IV, LLC, referred to herein as “BRELF IV,” commenced operations in 2019 with a focus on the Mid-Atlantic region of the United States. BRELF IV is managed by Broadmark Real Estate Management IV, LLC, referred to herein as “MgCo IV.” At September 30, 2019, BRELF IV had five loans outstanding with an aggregate face value of approximately $3.9 million.

PBRELF I and BRELF II elected to be taxed as REITs in 2018, and BRELF III expects to elect to be taxed as a REIT with the filing of its tax return for 2019. BRELF IV anticipates electing to be taxed as a REIT with the filing of its tax return for 2019, assuming it is in compliance with the various tests for qualification as a REIT.

Results from Operations

Nine Months Ended September 30, 2019 as compared to the Nine Months Ended September 30, 2018

Total Revenue and Total Investment Income

PBRELF I’s total revenues and total investment income for the nine months ended September 30, 2019 and September 30, 2018, respectively, consisted of interest income on the loans that it funded and fee income which represented 20% of fee based income. PBRELF I experienced demand from qualified borrowers for its capital in excess of available lending capacity between the periods ending September 30, 2018 and September 30, 2019. During those periods, PBRELF’s Manager, MgCo I, raised new capital by issuing additional preferred units in PBRELF I, and deployed that capital in a manner that grew the total principal and face amount of mortgage notes receivable, and the interest earned thereon. The number of loans outstanding and their average face amount for PBRELF I as of September 30, 2019 was 119 and $4.4 million respectively compared with 119 and $3.4 million respectively as of September 30, 2018. The following table sets forth the components of total revenue and total investment income earned by PBRELF I in the nine months ended September 30, 2019 and September 30, 2018, respectively ($ in thousands):

For the Nine Months Ended

Total revenue increased $9.5 million, or 43.2%, to $31.5 million for the nine months ended September 30, 2019 from $22.0 million for the nine months ended September 30, 2018. During the nine months ended September 30, 2019, PBRELF I originated 54 new loans representing approximately $197.7 million in total principal commitment with an average commitment per loan of approximately $3.7 million and with the largest individual loan commitment amounting to $18.8 million. During the same period, PBRELF I had 55 loans repaid representing approximately $148.2 million in total principal commitment and representing an average commitment per loan of $2.7 million. By comparison, for the nine months ended September 30, 2018, PBRELF I originated 65 new loans representing approximately $241.5 million in total principal commitment with an average commitment per loan of approximately $3.7 million and with the largest individual loan commitment amounting to $23.2 million. During the same period in 2018, PBRELF I had 57 loans repaid representing approximately $146.7 million in total principal commitment and representing an average commitment per loan of $2.6 million.

Interest income increased $9.5 million, or 43.2%, to $31.5 million for the nine months ended September 30, 2019 from $22.0 million for the nine months ended September 30, 2018. The increase is primarily attributable to a net increase in average loans outstanding during the period.

Fee income increased $235 thousand, or 8.9%, to $2.9 million for the nine months ended September 30, 2019 from $2.7 million for the nine months ended September 30, 2018. The increase is primarily attributable to an increase in the aggregate size of the outstanding principal and the extension fees assessed to maturing loans during the period ending September 30, 2019 when compared to the period ending September 30, 2018.

The following table sets forth the components of total expenses for PBRELF I in the nine months ended September 30, 2019 and September 30, 2018, respectively ($ in thousands):

For the Nine months Ended

Increase / (Decrease)

Provision for (reversal of) loan losses

Real estate properties, net of gains

Excise taxes and licenses

Total expenses for PBRELF I increased $3.2 million, or 496.7%, to $3.8 million for the nine months ended September 30, 2019 from $636 thousand for the nine months ended September 30, 2018.

The increase in total expenses is primarily related to the additional provision for loan losses related to defaulted mortgage loans receivables of $2.9 million compared to $407 in the period ending September 30, 2018.

For the nine months ended September 30, 2019, PBRELF I generated approximately $30.6 million in net income, representing an increase of $6.6 million, or 27.5%, as compared to the net income of $24.0 million for the nine months ended September 30, 2018. The increase is primarily attributable to an increase in average loans outstanding during the nine month period ended September 30, 2019 compared to the prior year period.

Liquidity and Capital Resources

PBRELF I’s primary liquidity needs include ongoing commitments to fund its lending activities and future funding obligations, making distributions to its members and funding other general business needs. PBRELF I’s primary sources of liquidity and capital resources to date have been derived from $466.9 million in preferred unit issuances including $11.0 million of reinvested distributions as of September 30, 2019. Since inception on June 28, 2010, and as of September 30, 2019, PBRELF I has not utilized and does not have any borrowings. As of September 30, 2019, PBRELF I’s cash and cash equivalents was $131.4 million.

PBRELF I seeks to meet its long-term liquidity requirements, such as real estate lending needs, including future construction draw commitments and member redemptions, through its existing cash resources, equity contributions, reinvested distributions and return of capital from investments, including loan repayments. PBRELF I is not required to sell real estate mortgages in order to pay redemption proceeds. As of September 30, 2019, PBRELF I had $484.8 million of loan commitments, of which $325.2 million were funded and outstanding, net of $4.0 million allowance for loan losses.

As a REIT, PBRELF I is required to distribute at least 90% of its annual REIT taxable income to its members, including taxable income where PBRELF I does not receive corresponding cash. PBRELF I intends to distribute all or substantially all of its REIT taxable income in order to comply with the REIT distribution requirements of the Code and to avoid federal income tax and the non-deductible excise tax.

PBRELF I typically makes monthly distributions of distributable cash as described herein.

Sources and Uses of Cash

The following table sets forth changes in cash and cash equivalents for the nine months ended September 30, 2019 and September 30, 2018 ($ in thousands):

For the Nine months Ended

Net cash received from / (used by)

Operating activities

Investing activities

Financing activities

Net increase / (decrease) in cash & cash equivalents

Nine months Ended September 30, 2019 as compared to the Nine months Ended September 30, 2018

At September 30, 2019 and September 30, 2018, PBRELF I had $155.6 million and $128.9 million of unfunded loan commitments, respectively. This increase is primarily attributable to an increase in lending operations.

Net cash received from operating activities was $32.9 million for the nine months ended September 30, 2019 compared to net cash received in operating activities of $24.2 million for the nine months ended September 30, 2018. The increase is primarily attributable to an increase in lending operations.

Net cash used in investing activities was $22.0 million for the nine months ended September 30, 2019 compared with net cash used in investing activities of $73.5 million for the nine months ended September 30, 2018. Less cash used is due to less new loans funded, slower repayment of existing loans, and fewer construction draw disbursements.

Net cash received from financing activities was $76.6 million for the nine months ended September 30, 2019 as compared to $67.7 million for the nine months ended September 30, 2018. The primary cash inflows for the nine months ended September 30, 2019 were $147.1 million of capital from the sale of preferred units to unit holders and $8.4 million of capital received in advance, offset by $40.0 million of redemptions and $22.3 million of distributions to holders of preferred units. The primary cash inflows for the nine months ended September 30, 2018 were $88.0 million of capital from the sale of preferred units to unit holders, $4.1 million of capital received in advance, offset by $8.6 million of redemptions and $16.2 million of distributions to holders of preferred units.

Contractual Obligations and Commitments

The following table illustrates the contractual obligations and commercial commitments of the PBRELF I by due date as of September 30, 2019 ($ in thousands):

Payments Due by Period

Operating Lease Obligations

Unfunded loan commitments

Off-Balance Sheet Arrangements

The Company Group has not entered into any off-balance sheet transactions, arrangements or other relationships with unconsolidated entities or other persons that are likely to affect liquidity or the availability of the Company Group’s requirements for capital resources.

Nine months Ended September 30, 2019 as compared to the Nine months Ended September 30, 2018

MgCo I revenue consisted of fee income, which represented 80% of fee based income, and distributions from PBRELF I with respect to its common interest equal to 20% of distributable cash in excess of the preferred return. The following table sets forth the total revenue earned by MgCo I in the nine months ended September 30, 2019 and September 30, 2018 ($ in thousands):

For the Nine months Ended

Increase / (Decrease)

Distributions from PBRELF I

Total revenue increased by $1.6 million, or 12.1%, to $14.7 million for the nine months ended September 30, 2019 from $13.1 million for the nine months ended September 30, 2018. During the nine months ended September 30, 2019, MgCo I originated $197.7 million in principal amount of loans with an average commitment per loan of $3.7 million. By comparison, during the nine months ended September 30, 2018, MgCo I originated $241.5 million in principal commitment with an average commitment per loan of $3.7 million.

Fee income increased by $838 thousand, or 7.8%, to $11.6 million for the nine months ended September 30, 2019 from $10.7 million for the nine months ended September 30, 2018. The increase in Fee income is primarily attributable to an increase in extension activity during the period.

Distributions from PBRELF I increased by $745 thousand, or 31.6%, to $3.1 million for the nine months ended September 30, 2019 from $2.4 million for the nine months ended September 30, 2018. The increase is primarily attributable to an increase in the average net principal amount of loans outstanding during third quarter 2019 compared to third quarter 2018.

The following table sets forth the components of Total expenses for MgCo I in the nine months ended September 30, 2019 and September 30, 2018, respectively ($ in thousands):

For the Nine months Ended

Increase / (Decrease)

Commissions to Broadmark Capital LLC

General and administrative

Legal, audit, insurance

Depreciation expense

Total expenses increased by $2.5 million, or 65.4%, to $6.3 million for the nine months ended September 30, 2019 from $3.8 million for the nine months ended September 30, 2018. The increase between reporting periods is primarily attributable to an increase of $1.3 million, or 344.6%, in legal, audit, insurance expense, some of which was related to the Business Combination, and is non-recurring in nature, as well as an increase in $824 thousand, or 51.1% in Commissions to Broadmark Capital LLC.

Net income decreased by $0.9 million, or (9.7%), to $8.4 million for the nine months ended September 30, 2019 from $9.3 million for the nine months ended September 30, 2018. The decrease is primarily attributable to an increase in Commissions to Broadmark Capital LLC, and Legal, audit, insurance expenses partially offset by an increase in Fee income and Distributions from PBRELF I.

Liquidity and Capital Resources

MgCo I’s capital sources include cash flow from operating activities, comprised of 80% of fee based income as well as distributions from PBRELF I equal to 20% of distributable cash in excess of the preferred return. MgCo I does not have any borrowings.

MgCo I’s primary uses of liquidity include operating expenses and distributions. On a monthly basis, MgCo I’s Board of Managers determines an appropriate distribution amount based upon numerous factors, including cash flow from operating activities, availability of existing cash balances, general economic conditions and economic conditions that more specifically impact MgCo I’s business or prospects. Future distributions are subject to adjustment based upon the evaluation of the factors described above, as well as other factors that MgCo I’s Board of Managers may, from time-to-time, deem relevant to consider when determining an appropriate common stock dividend.

MgCo I believes that its existing sources of funds should be adequate for purposes of meeting its liquidity needs. Unrestricted cash as of September 30, 2019 was approximately $1.8 million.

Sources and Uses of Cash

The following table sets forth changes in cash and cash equivalents for the nine months ended September 30, 2019 and September 30, 2018 ($ in thousands).

For the Nine months Ended

Net cash received from / (used by)

Operating activities

Investing activities

Financing activities

Net increase / (decrease) in cash & cash equivalents

Nine months Ended September 30, 2019 as compared to the Nine months Ended September 30, 2018

Net cash received from operating activities was $8.5 million for the nine months ended September 30, 2019 compared to net cash received from in operating activities of $8.8 million for the nine months ended September 30, 2018. The decrease is primarily attributable to the decrease in net income.

Net cash used in investing activities was $63 thousand for the nine months ended September 30, 2019 as compared to $279 thousand for the nine months ended September 30, 2018. The company does not have meaningful investment requirements to operate the business.

Net cash used in financing activities was $6.8 million for the nine months ended September 30, 2019 as compared to $7.4 million for the nine months ended September 30, 2018. The decrease is a result of decreased distributions to members.

Nine Months Ended September 30, 2019 as compared to the Nine Months Ended September 30, 2018

BRELF II’s total revenue for the nine months ended September 30, 2019 and September 30, 2018, respectively, consisted of interest income on the loans that it funded and fee income which represented 20% of fee based income. The following table sets forth the components of Total revenue earned by BRELF II in the nine months ended September 30, 2019 and September 30, 2018, respectively ($ in thousands).

Increase / (Decrease)

Total revenue increased $19.5 million, or 97.8%, to $39.4 million for the nine months ended September 30, 2019 from $19.9 million for the nine months ended September 30, 2018. During the nine months ended September 30, 2019, BRELF II originated 34 new loans representing approximately $195.6 million in total principal commitment with an average commitment per loan of approximately $5.8 million and with the largest individual loan commitment amounting to $33.5 million. During the same period, BRELF II had 36 loans repaid representing approximately $78.1 million in total principal commitment and representing an average commitment per loan of $2.2 million. By comparison, for the nine months ended September 30, 2018, BRELF II originated 67 new loans representing approximately $249.0 million in total principal commitment with an average commitment per loan of approximately $3.7 million and with the largest individual loan commitment amounting to $18.6 million. During the same period in 2018, BRELF II had 48 loans repaid representing approximately $65.5 million in total principal commitment and representing an average commitment per loan of $1.4 million.

Interest income increased $18.9 million, or 109.6%, to $36.2 million for the nine months ended September 30, 2019 from $17.3 million for the nine months ended September 30, 2018. The increase is a primarily attributable to an increase in the average principal loan balance outstanding during the period.

Fee income increased by $555 thousand, or 21.0%, to $3.2 million for the nine months ended September 30, 2019 from $2.6 million for the nine months ended September 30, 2018. The increase is primarily attributable to an increase in the volume of loans originated during the period.

The following table sets forth the components of Total expenses for BRELF II in the nine months ended September 30, 2019 and September 30, 2018, respectively ($ in thousands).

For the Nine Months Ended

Increase / (Decrease)

Provision for loan losses

Real estate properties, net of gains

Total expenses for BRELF II decreased $686 thousand or (115.3)%, to $(91) thousand for the nine months ended September 30, 2019 from $595 thousand for the nine months ended September 30, 2018. The decrease is primarily attributable to a reversal of provisional charges for loan losses in the amount of $167 thousand and the reversal of real estate properties expenses in the amount of $168 thousand due to the recovery of reserves related to the sale of owned real estate property.

The provisional charges for loan losses are primarily attributable to BRELF II’s REIT status election on October 1, 2018, which caused it to cease to use the guidelines of the Financial Accounting Standards Board’s Accounting Standards Codification Topic 946 (“ASC 946”).

Due to BRELF II’s REIT election on October 1, 2018, the financial statements as of and for the year ended December 31, 2018 reflect Net Income in accordance with accounting principles generally accepted under U.S. GAAP.

For the nine months ended September 30, 2019, BRELF II generated $39.5 million in Net income, representing an increase of $20.2 million, or 104.4%, as compared to Net income of $19.3 million for the nine months ended September 30, 2018. The increase is primarily attributable to an increase the average principal amount of loans outstanding during the period and to increase loan volume origination activity compared to the same period a year ago.

Liquidity and Capital Resources

BRELF II’s primary liquidity needs include ongoing commitments to fund its lending activities and future funding obligations, make distributions to its members and fund other general business needs. BRELF II’s primary sources of liquidity and capital resources to date have been derived from $516.3 million in preferred unit issuances as of September 30, 2019. Since inception on February 13, 2014, and as of September 30, 2019, BRELF II has not utilized and does not have any borrowings. As of September 30, 2019, BRELF II’s cash and cash equivalents was $60.7 million.

BRELF II seeks to meet its long-term liquidity requirements, including funding needs, including future construction draw commitments, and member redemptions through its existing cash resources, equity contributions, reinvested distributions and return of capital from investments, including loan repayments. BRELF II is not required to sell real estate mortgages to meet its liquidity needs. As of September 30, 2019, BRELF II’s had $614.6 million of loan commitments, of which $460.3 million were funded and outstanding.

As a REIT, BRELF II is required to distribute at least 90% of its annual REIT taxable income to its members, including taxable income where BRELF II does not receive corresponding cash. BRELF II intends to distribute all or substantially all of its REIT taxable income in order to comply with the REIT distribution requirements of the Code and to avoid federal income tax and the non-deductible excise tax.

BRELF II typically makes monthly distributions of distributable cash as described herein. Distributions of distributable cash, fee based income, and the preferred return are not guaranteed, and are only paid to the extent earned.

Sources and Uses of Cash

The following table sets forth changes in cash and cash equivalents for the nine months ended September 30, 2019 and September 30, 2018 ($ in thousands).

For the Nine Months Ended

Net cash received from / (used by)

Operating activities

Investing activities

Financing activities

Net increase / (decrease) in cash & cash equivalents

Nine Months Ended September 30, 2019 as compared to the Nine Months Ended September 30, 2018

At September 30, 2019 and September 30, 2018, BRELF II had $154.3 million and $153.9 million of unfunded loan commitments, respectively.

Net cash received from operating activities was $39.3 million for the nine months ended September 30, 2019 compared to net cash received from operating activities of $19.9 million for the nine months ended September 30, 2018. The increase is primarily attributable to an increase in lending operations.

Net cash used in investing activities was $180.2 million for the nine months ended September 30, 2019 compared with net cash used in investing activities of $124.8 million for the nine months ended September 30, 2018. The increase is primarily attributable to an increase in lending operations.

Net cash received from financing activities was $138.8 million for the nine months ended September 30, 2019 as compared to $123.0 million for the nine months ended September 30, 2018. The primary cash inflows for the nine months ended September 30, 2019 were $194.4 million of capital from sale of preferred units to unit holders, offset by 16.0 million of capital received in advance, $15.5 million of redemptions and $25.9 million of distributions to holders of preferred units. The primary cash inflows for the nine months ended September 30, 2018 were $127.8 million of capital from the sale of preferred units to unit holders and $10.4 million of capital received in advance, offset by $12.8 million of distributions and $3.7 million of redemptions by holders of preferred units.

Nine Months Ended September 30, 2019 as compared to the Nine Months Ended September 30, 2018

MgCo II revenue consisted of fee income, which represented 80% of fee based income, and distributions from BRELF II with respect to its common interest equal to 20% of distributable cash in excess of the preferred return. The following table sets forth the total revenue earned by MgCo II for the nine months ended September 30, 2019 and September 30, 2018 ($ in thousands).

Increase / (Decrease)

Distributions from BRELF II

Total revenue increased by $3.9 million, or 29.7%, to $16.8 million for the nine months ended September 30, 2019 from $12.9 million for the nine months ended September 30, 2018. During the nine months ended September 30, 2019, MgCo II originated $195.6 million in principal commitment with an average commitment per loan of $5.8 million. By comparison, during the nine months ended September 30, 2018, MgCo II originated $249.0 million in principal commitment with an average commitment per loan of $3.7 million.

Fee income increased by $1.9 million, or 17.9%, to $12.8 million for the nine months ended September 30, 2019 from $10.9 million for the nine months ended September 30, 2018. The increase is primarily attributable to an increase in the volume of loan originations during the period.

Distributions from BRELF II increased by $1.9 million, or 91.8%, to $4.0 million for the nine months ended September 30, 2019 from $2.1 million for nine months ended September 30, 2018. The increase is primarily attributable to an increase in the average net principal amount of loans outstanding during the period.

The following table sets forth the components of Total expenses for MgCo II for the nine months ended September 30, 2019 and September 30, 2018, respectively ($ in thousands).

For the Nine Months Ended

Increase / (Decrease)

Commissions to Broadmark Capital LLC

General & administrative expense

Legal, audit, insurance

Total expenses increased by $3.7 million, or 99.9%, to $7.5 million for the nine months ended September 30, 2019 from $3.8 million for the nine months ended September 30, 2018. The increase is primarily attributable to an increase of $1.2 million, or 101.4%, in compensation expense, an increase of $1.0 million, or 64.0%, in placement agent fees paid to Broadmark Capital for referring investors in BRELF II and an increase of $896 thousand in legal, audit, insurance expense.

Net income increased by $109 thousand, or 1.2%, to $9.3 million for the nine months ended September 30, 2019 from $9.2 million for the nine months ended September 30, 2018. Net Income increased primarily as a result of increased fee income resulting from increased volumes of loan originations and extension fees during the period.

Liquidity and Capital Resources

MgCo II’s capital sources include cash flow from operating activities, comprised of 80% of fee based income as well as distributions from BRELF II equal to 20% of distributable cash in excess of the preferred return. MgCo II does not have any borrowings.

MgCo II’s primary uses of liquidity include operating expenses and distributions. On a monthly basis, MgCo II’s Board of Managers determines an appropriate distribution amount based upon numerous factors, including cash flow from operating activities, availability of existing cash balances, general economic conditions and economic conditions that more specifically impact MgCo II’s business or prospects. Future distributions are subject to adjustment based upon the evaluation of the factors described above, as well as other factors that MgCo II’s Board of Managers may, from time-to-time, deem relevant to consider when determining an appropriate common stock dividend.

MgCo II believes that its existing sources of funds should be adequate for purposes of meeting its liquidity needs.

Sources and Uses of Cash

The following table sets forth changes in cash and cash equivalents for the nine months ended September 30, 2019 and the nine months ended September 30, 2018 ($ in thousands).

For the Nine Months Ended

Net cash received from / (used by)

Operating activities

Financing activities

Investing activities

Net increase / (decrease) in cash & cash equivalents

Nine Months Ended September 30, 2019 as compared to the Nine Months Ended September 30, 2018

Name of Investor:			State/Country of Formation or Domicile:

By:

Name:

Title:

Name in which Shares are to be registered (if different):			Date: _______________, 2019
Investor’s EIN:

Business Address-Street:			Mailing Address-Street (if different):

City, State, Zip:			City, State, Zip:

Attn:__________________			Attn:__________________

Telephone No.:			Telephone No.:
Facsimile No.:			Facsimile No.:

Subscription Amount: $			Reference Price (as defined in the Merger Agreement)

Optional Subscription Amount: $

	For the Nine Months Ended September 30,				Increase / (Decrease)
	2019		2018		$		%
Interest income	$	31,506	$	22,001	$	9,505		43.2	%
Fee income		2,887		2,652		235		8.9	%
Other		—		—		—
Total Revenue	$	34,393	$	24,653	$	9,740		39.5	%

	Payments Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Operating Lease Obligations	$	—	$	—	$	—	$	—	$	—
Unfunded loan commitments		155,276		151,107		4,169		—		—
Total	$	155,276	$	151,107	$	4,169	$	—	$	—

	For the Nine Months Ended September 30,				Increase / (Decrease)
	2019		2018		$		%
Interest income	$	36,190	$	17,265	$	18,925		109.6	%
Fee income		3,204		2,649		555		21.0	%
Total Revenue	$	39,394	$	19,914	$	19,480		97.8	%

	For the Nine Months Ended September 30, 2019		January 24, 2018 (date of inception) through September 30, 2018²		Increase / (Decrease)
	For the Nine Months Ended September 30, 2019				$		%
Interest income	$	1,565	$	276	$	1,289		467.0	%
Fee income		174		71		103		145.1	%
Total Revenue	$	1,739	$	347	$	1,392		401.2	%

	February 28, 2019 (date of inception) through September 30, 2019
Interest income	$	102
Fee income		23
Total Revenue	$	125

	February 28, 2019 (date of inception) through September 30, 2019
Other	$	1
Total Expense	$	1

	For the Nine months ended September 30, 2019
Fee income	$	91
Distributions from BRELF IV		10
Total Revenue	$	101