exhibit10_6toamend2.htm


    Exhibit
10.6

    


    FORMATION
LOAN PROMISSORY NOTE

    


    


    


    Up to a
Maximum of
$10,500,000                                                                                                                                Effective
as of       , 2009

     

            Redwood
City, California

     

    For value
received, and in connection with an offering (the “Offering”) of up to
$150,000,000 in units in Redwood Mortgage Investors IX, LLC, a Delaware limited
liability company (the “Holder”), Redwood Mortgage Corp., a California
corporation (the “Borrower”) promises to pay to Holder up to the principal sum
of TEN MILLION FIVE HUNDRED THOUSAND DOLLARS and No/100ths ($10,500,000), or so
much thereof as shall have been advanced by Holder to Borrower (the “Principal
Amount”) under this promissory note (this “Note”) on or before the termination
date of the Offering (the “Termination Date”).  This Note shall be
effective as
of             ,
2009, the effective date of the Offering, and does not supersede, replace, amend
or modify any other notes made by the Borrower in favor of the Holder or other
obligations of the Borrower to the Holder.  Prior to the Termination
Date, and upon Borrower’s written request to Holder, Holder agrees to make
advances of up to the Principal Amount (the “Advances”) to the Borrower so long
as no Event of Default (as defined below) has occurred under this
Note.  Holder acknowledges and agrees that all Advances under this
Note shall be memorialized on a written addendum hereto, as supplemented from
time to time, with each Advance memorialized on the addendum being initialed by
the Borrower when and as made.  The Principal Amount, or any portion
thereof that is advanced under this Note, shall not accrue any
interest.

    


    1.           The
Principal Amount advanced to Borrower hereunder shall be used by Borrower for
the sole and exclusive purpose of paying selling commissions owed by Borrower in
connection with the offer and sale of units of limited liability company
interests in the Holder (“Units”), and all amounts payable in connection with
unsolicited orders for Units received by Borrower, all in accordance with
Section 11.12 of the Amended and Restated Limited Liability Company Operating
Agreement of the Holder, dated January 26, 2009 (the “Operating
Agreement”).

    


    2.           All
payments of the Principal Amount (or such portion thereof that has been advanced
to Borrower under this Note) shall be in lawful money of the United States of
America and shall be paid to Holder at its principal office located at 900
Veterans Blvd., Suite 500, Redwood City, California 94063.  Prior to
the Termination Date, all payments of the Principal Amount owing hereunder shall
be paid in annual installments equal to 1/10 of the Principal Amount outstanding
as of December 31 of each year, reduced by the amount of any withdrawal
penalties received by the Holder in accordance with Section 8.1 of the Operating
Agreement due to the early redemption of Units.  Each payment of the
Principal Amount prior to the Termination Date shall be made on or before
December 31 of the following year.  Upon the Termination Date, the
Principal Amount outstanding shall be amortized over ten years, with payments
being made on or before December 31 of each year in equal annual installments of
1/10 of the Principal Amount outstanding as of the Termination Date, reduced by
the amount of any withdrawal penalties received by the Holder in accordance with
Section 8.1 of the Operating Agreement due to the early redemption of
Units.  Each payment of the Principal Amount after the Termination
Date shall be made on or before December 31 of the following
year.  Any balance owing under this Note shall be due and payable on
or before December 31 of the year immediately following the ten year anniversary
of Termination Date (the “Maturity
Date”).  The Borrower may prepay all or any part of the
Principal Amount owing under this Note at any time without any penalty or
interest.

    


    3.           The
Borrower agrees to pay on demand all reasonable, actual costs and expenses, if
any (including, without limitation, reasonable counsel fees and expenses), of
the Holder in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Note and all related agreements and the
other certificates or documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Note.  The obligations of the
Borrower under this Section 3 shall survive the termination of this Note and the
repayment of the Principal Amount.


    
      
         


      

      
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    4.           This
Note shall be unsecured.

    


    5.           The
Borrower hereby waives demand, notice, presentment, protest and notice of
dishonor.

    


    
      	
              6.  

            	
              Any
      of the following shall constitute an “Event of Default” under this Note,
      and shall give to the remedies provided in Section 7
  below:

            


    

    


    
      	
              a)  

            	
              Any
      failure by the Borrower to pay when due all or any portion of the
      Principal Amount owing under this
Note;

            


    

    


    
      	
              b)  

            	
              Borrower’s
      use of the Principal Amount for any purpose other than as permitted in
      Section 1, above.

            


    

    


    
      	
              c)  

            	
              If
      the Borrower (i) admits in writing its inability to pay generally its
      debts as they mature, or (ii) makes a general assignment for the benefit
      of creditors, or (iii) is adjudicated a bankrupt or insolvent, or (iv)
      files a voluntary petition in bankruptcy, or (v) takes advantage, as
      against its creditors, of any bankruptcy law or statute of the United
      States of America or any state or subdivision thereof now or hereafter in
      effect, or (vi) has a petition or proceeding filed  against it
      under any provision of any bankruptcy or insolvency law or statute of the
      United States of America or any state or subdivision therefore, which
      petition or proceeding is not dismissed within thirty (30) days after the
      date of the commencement thereof, (vii) has a receiver, liquidator,
      trustee, custodian, conservator, sequestrator or other such person
      appointed by any court to take charge of its affairs or assets or business
      and such appointment is not vacated or discharged within thirty (30) days
      thereafter, or (viii) takes any action in furtherance of any of the
      foregoing.

            


    

    


    7.           If
any Event of Default shall occur and be continuing, Holder shall, in addition to
any and all other available rights and remedies, have the right, at Holder’s
option, to: (a) declare the entire unpaid principal balance of this Note and all
other sums due by the Borrower hereunder, without notice to Borrower, to be
immediately due and payable: and (b) pursue any and all available remedies for
the collection of such principal to enforce its rights as described herein; and
in such case Holder may also recover all costs of suit and other expenses in
connection therewith, including reasonable attorney’s fees for collection and
the right to equitable relief (including, but not limited to, injunctions) to
enforce Holder’s rights as set forth herein (as described herein).

    


    8.           In
the event that all or any one or more of Gymno Corporation, a California
corporation, or Redwood Mortgage Corp., a California corporation (collectively,
the “Initial Managers”) are removed as managers(s) of the Holder by the vote of
a majority of members of the Holder, and a successor or additional manager(s) is
thereafter designated, and if such successor or additional manager(s) begins
using any other loan brokerage firm for its placement of mortgage loans, the
Borrower will immediately be released from all further obligation under this
Note (except for a proportionate share of the principal installment due at the
end of that year, pro rated according to the number of days
elapsed).  In addition, if all of the Initial Managers are removed, no
successor manager(s) are elected, the Holder is liquidated and the Borrower is
no longer receiving any payments for services rendered, the amounts owing under
this Note shall be forgiven and the Borrower shall be released and held harmless
from any further obligation under this Note.

    


    9.           The
terms of this Note shall be construed in accordance with the laws of the State
of California, as applied to contracts entered into by California residents
within the State of California, which contracts are to be performed entirely
within the State of California.

    


    10.           Any
term of this Note may be amended or waived with the written consent of the
Borrower and Holder.  This Note may not be assigned without the prior
written consent of the Borrower, which shall not be unreasonably withheld or
delayed.

    


    Redwood Mortgage Corp., a California
corporation

    


    By:      _______________________________________

    Name:  _______________________________________

    Title:    _______________________________________


    
      
         


      

      
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    ADVANCED
AND PAYMENT OF PRINCIPAL*

    


    


    


    


    
      	
              Date

            	
              Amount
      of Advance

            	
              Amount
      of Principal

              Paid
      or Prepaid

            	
              Unpaid
      Principal

              Amount

            	
              Notation
      Made By

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      


    

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    ________________________

    


    *
Continue on separate sheet if necessary

    


    


    



    
      
         


      

      
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