Document:

EX-10.9

 Exhibit 10.9 

May 19, 2020 
 Dr. Jeremy Bender 

 

	 	Re:	 Day One Biopharmaceuticals, Inc. – Employment Offer 

Dear Jeremy, 
 Pursuant to our recent
discussions, I am pleased to send you, on behalf of Day One Biopharmaceuticals, Inc. (the “Company”), this letter agreement (the “Agreement”) which sets forth the terms of an offer for employment with
the Company. 
  

	1.	 Position. Duties and Conditions Precedent. 

 

	 	1.1	 Position. Subject to the satisfaction of each of the conditions set forth in paragraph 1.3 below, the
Company agrees to employ you as its Chief Executive Officer and, in this role, you will also serve as the Chief Executive Officer of Day One Biopharmaceuticals Holdings Company, LLC (“Parent”) and DOT Therapeutics – 1,
Inc. (“DOT-1”). Following the Start Date (defined below), you will also be a member of (i) the Company’s Board of Directors (the “Company Board”), (ii)
the Parent’s board of managers (the “Parent Board”) and (iii) DOT-1’s Board of Directors (the “DOT-1
Board”). You accept such employment on the terms and conditions set forth herein and in the Company’s employee handbook and policies as in effect from time to time and you agree to devote such time, energy and skill as is necessary
to properly fulfill your duties and responsibilities. If you cease to serve as an officer of the Company, Parent or DOT-1 for any reason, then you hereby agree to resign from your position as a member of the
Company Board, Parent Board and/or find DOT-1 Board, if and as requested by the Parent Board. 

  

	 	1.2	 Duties. You will report to, and perform the duties and responsibilities which may be assigned to you
from time to time by, the Parent Board. By signing this Agreement, you are representing that you have full authority to accept this position and perform its duties without conflict with any other obligations, including any employment agreement or
restrictive covenant. 

  

	 	1.3	 Conditions Precedent. The employment opportunity with the Company set forth in this Agreement is
contingent upon your satisfaction of each of the following conditions: (a) your execution and delivery to the Company of a Proprietary Information and Inventions Assignment Agreement, which must be signed on or prior to the Start Date and
(b) your delivery to the Company of legally-required proof of your identity and authorization to work in the United States. 

  

	 	1.4	 Start Date. Your employment with the Company will commence on September 1, 2020 (“Start
Date”). 

  

	 	1.5	 At-Will Employment. If you decide to accept our offer of
employment, from and after the Start Date, you will be an at-will employee of the Company, which means that the employment relationship can be terminated by the Company for any reason, at any time, with or
without prior notice and with or without Cause (as defined herein). 

	 	1.6	 Best Efforts. During the term of your employment with the Company, you will devote your best efforts and
substantially all of your business time and attention to the business of the Company and affiliated entities, except for approved vacation periods and reasonable periods of illness or other incapacities permitted by the Company’s general
employment policies; provided that, it is expressly contemplated that, with the prior approval of the Parent Board, you will be able to serve on up to two boards of directors of entities that are not affiliated with the Company.

  

	2.	 Compensation. You shall be compensated by the Company for your employment services as follows:

  

	 	2.1	 Salary. You shall be paid a salary of $425,000 per annum, less applicable withholdings. Your
salary shall be payable in equal installments in accordance with the Company’s normal payroll procedures. 

  

	 	2.2	 Bonus. You shall be entitled to a bonus of up to 40% of your annual base salary. Bonuses will be solely
as determined by the Parent Board and will be based on Company’s and affiliated entities’ performance and personal performance as measured against a set of metrics established by the Parent Board. You must be employed through the date a
bonus is paid in order to be eligible for the bonus. In your first year of employment, the achieved bonus (if any) will be prorated if you are not employed for the full fiscal year and you otherwise satisfy the conditions to receive a bonus.

  

	 	2.3	 Benefits. You shall have the right, on the same basis as other similarly situated employees of the
Company, to participate in, and to receive benefits under, any medical, vision and dental insurance policy adopted and maintained by the Company in accordance with, and subject to the eligibility and other provisions of, such plans and programs and
the Company’s policies. 

  

	 	2.4	 Profits Interest Grant. Following the Start Date, and subject to approval by the Parent Board, the
Parent shall grant you 656,853 Incentive Shares under the Incentive Share Plan for the Parent. 

  

	 	2.4.1	 Vesting Schedule. The Incentive Shares shall vest according to the following schedule: 25% of such
Incentive Shares shall vest on the one-year anniversary of the Start Date and 1/48 of such Incentive Shares vest on the last day of each calendar month after such one-year anniversary date until all such
Incentive Shares have vested, so long as you continue to provide services to any of the Company, the Parent, or DOT-1 or any other subsidiary of the Parent, on each such vesting date. 

 

	 	2.4.2	 Acceleration. Upon termination of your employment by the Company without Cause or termination of your
employment by you for Good Reason, then (i) that number of Incentive Shares outstanding and eligible to vest over the twelve month period following such termination shall become vested upon such termination, and (ii) if such termination
occurs in the twelve months following the consummation of a Specified Change in Control, then 100% of the Incentive Shares will immediately vest, and (iii) if such termination occurs in the twelve months following the consummation of a sale by
the Company of DOT-1 that does not constitute a Specified Change in Control, then you shall be entitled to distribution of the amounts related solely to the sale of
DOT-l, if any, that have been retained 

  
 2 

	 	
by the Company with respect to your Unvested Incentive Shares (as defined in the Parent’s Operating Agreement (defined below)) pursuant to Section 10.05 of the Parent’s Operating
Agreement as of the date of such termination; provided that, for the avoidance of doubt, the vesting of your Unvested Incentive Shares shall not be accelerated pursuant to this clause (iii); and provided further that, any distribution
pursuant to this clause (iii) shall be subject to approval by the Parent Board and the members of Parent of an amendment to the Parent’s Operating Agreement to permit the distribution on Unvested Incentive Shares provided for herein, which
approval the Company will undertake reasonable efforts to procure. The benefits under this Section 2.4.2 shall be provided only if you sign and do not revoke the Release (as described below) and permit the Release to become effective in
accordance with its terms, which must occur no later than the Release Deadline (as defined below). 

  

	 	2.4.3	 Specified Change in Control. A “Specified Change in Control” shall mean
(a) a Deemed Liquidation Event (as defined in that certain Amended and Restated Operating Agreement of the Parent, dated December 16, 2019 (as the same may be amended from time to time the “Parent’s Operating
Agreement”)), or (b) the dissolution, liquidation or winding up of the Parent. 

  

	 	2.4.4	 Terms and Conditions. The term “Participation Threshold” for the Incentive Shares shall have
the meaning set forth in the Parent’s Operating Agreement and shall be determined as of the date that the Incentive Shares are granted to you. As a condition to your initial receipt of the Incentive Shares, you shall execute a joinder to the
Parent’s Operating Agreement as an “Incentive Member” and the Incentive Shares will be subject to the terms, conditions and restrictions set forth in such Operating Agreement, the Parent’s Incentive Share Plan and the Award
Agreement related thereto. 

  

	3.	 Other Severance Benefits/Terms. 

 

	 	3.1	 Salary Continuation & COBRA. If, at any time after the Start Date, your
employment is terminated by the Company without Cause, or by you for Good Reason, and provided in any case such termination constitutes a “separation from service”, as defined under Treasury Regulation
Section 1.409A-l(h)) (a “Separation from Service”) and, provided that you sign and do not revoke a full release of all legal claims in a form attached as Exhibit [_] (as may be
updated for changes in applicable law) within the applicable deadline set forth therein (the “Release”) and permit the Release to become effective in accordance with its terms, which must occur no later than the
“Release Deadline”, as defined in Appendix A, then you shall be eligible to receive the following severance benefits: 

(a) your then-current base salary, subject to withholding and other payroll taxes and obligations, for a twelve (12) month period, paid
over the Company’s normal payroll dates, that shall commence effective no later than on the day after the Release becomes fully effective; 

(b) the target bonus amount for the year in which the termination occurs; and 

  
 3 

 (c) if you timely elect continued coverage under COBRA for yourself and your covered
dependents under the Company’s group health plans following such termination, then the Company shall pay the COBRA premiums necessary to continue such health insurance coverage in effect for yourself and your covered dependents on the
employment termination date from the day after the Release becomes fully effective until the earliest of: (l) the date that is twelve months following the date your employment is terminated; (2) the date that you become eligible for
substantially equivalent health insurance coverage in connection with new employment or self-employment; or (3) the date that you cease to be eligible for COBRA continuation coverage for any reason, including plan termination (such period from
the employment termination date through the earliest of (l)–(3), the “COBRA Payment Period”). 

Notwithstanding the foregoing, if at any time the Company determines that its payment of COBRA premiums on your behalf would result in a
violation of applicable law (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying COBRA premiums pursuant to this
Section 4, the Company shall pay you on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premium for such month, subject to tax withholding and other payroll taxes and
obligations. 
  

	 	3.2	 Definitions. 

  

	 	3.2.1	 Cause. For purposes of this Agreement, “Cause” shall mean (i) your material
breach of the provisions of this Agreement or the Proprietary Information and Inventions Assignment Agreement; (ii) willful misconduct or recklessness resulting in material harm to the business or reputation of the Company, Parent, DOT-1 and/or subsidiary that is majority-owned by Parent; (iii) material violation of Company, Parent DOT-1 and/or subsidiary that is majority-owned by Parent policy or
any state or federal law relating to the workplace environment (including, without limitation, laws relating to sexual harassment or age, sex or other prohibited discrimination) that exposes the Company, Parent
DOT-1 and/or subsidiary that is majority-owned by Parent to potential liability for your acts; (iv) your commission of a felony or any crime involving moral turpitude; or (v) your commission of any
fraud, embezzlement or misappropriation. Notwithstanding the foregoing, prior to a termination for Cause pursuant to clauses (i) or (ii) above, the Company shall provide you with (a) written notice that the Parent Board has identified
actions or a particular event giving rise to Cause and (b) an opportunity to reasonably cure (if reasonably curable) such actions or particular event giving rise to Cause within 30 days of receiving such written notice. 

 

	 	3.2.2	 Good Reason. For purposes of this Agreement, “Good Reason” shall mean any of the
following without your prior written consent, (i) a decrease in your annual base salary by more than ten percent (10%) from the maximum base salary that you have received at any prior time in service with the Company; (ii) a material,
detrimental change to your role with the Company or the Parent including by reason of a reduction of your duties, responsibilities or authority, which shall include (x) any requirement that you no longer report to the Parent Board, (y) any
removal whereby you no longer serve on the Parent Board, or (z) any requirement following a Specified Change in Control where you do not report directly to the board of directors of the ultimate parent company of the acquirer or successor
company; (iii) a material breach by the Company or any affiliate of the Company of this Agreement or any written agreement then in effect between you and the 

  
 4 

	 	
Company and/or any affiliate of the Company or (iv) relocation of your principal workplace by more than thirty-five (35) miles from your then current place of employment. In the event
that you believe Good Reason exists, then you must provide the Parent Board with written notice no later than ninety (90) days after such event or condition that you believe constitutes Good Reason occurs, specifying the alleged Good Reason
event or condition. The Company or an affiliate of the Company, as applicable, will have thirty (30) days to cure such event or condition (if curable), and you must terminate your employment within ten (10) days after the end of such
thirty (30) day cure period if the Company or its affiliate, as applicable, has not cured such event or condition. 

  

	4.	 Indemnification. The Company, Parent and DOT-1 shall indemnify
you to the maximum extent permitted by applicable law. In addition, the Company will cause that each of these entities will cover you under directors and officers insurance policies on terms no less favorable than those provided to other senior
officers and directors of such entities. 

  

	5.	 Entire Agreement. This Agreement constitutes the entire agreement between you and the Company regarding
the terms and conditions of your employment with the Company and it supersedes all prior negotiations, representations or agreements between us, whether written or oral. You acknowledge that you are not relying, and have not relied, on any promise,
representation or statement made by or on behalf of the Company which is not set forth in this Agreement. 

  

	6.	 Representations. You represent that (a) you are not subject to any legal or contractual obligation
that could prevent you from undertaking or performing the functions described herein, (b) you will not, in connection with your employment by the Company, use or disclose to any employee or representative of the Company any confidential,
proprietary and/or trade secret information that you obtained during any prior employment, and (c) you will fully abide by all ongoing obligations (of confidentiality or otherwise) to all prior employers. 

 

	7.	 Guarantee. All benefits and payments hereunder (including, but not limited to, cash payments) are
obligations of the Company. However, the Parent hereby agrees to honor and guarantee all obligations (both benefits and legal obligations) of the Company hereunder as set forth herein as if all such obligations were solely those of the Parent. This
Section 7 shall not be construed to confer a duplication of benefits to you. 

  

	8.	 Termination. Prior to the Start Date, you or the Company shall be entitled to terminate this agreement
upon notice to the other. If the Company terminates this Agreement prior to the Start Date and without Cause then, provided that you sign and do not revoke a Release and permit the Release to become effective in accordance with its terms, the
Company shall pay you a termination fee of $100,000. 

  
 5 

 DAY ONE THERAPEUTICS, INC. 
  

			
	By:	 	 /s/ Julie Grant

		 	Name: Julie Grant
		 	Title: Chief Executive Officer

 PARENT 
  

			
	By:	 	 /s/ Julie Grant

		 	Name: Julie Grant
		 	Title: Chief Executive Officer

 I agree to employment with Day One Therapeutics, Inc. on the terms and conditions set forth in this Agreement.

  

	
	 /s/ Jeremy Bender

	Name: Jeremy Bender

  
 6 

 Appendix A 

This Appendix A is incorporated into the Agreement, as if fully set forth therein. 

Notwithstanding anything in this Agreement to the contrary, the following provisions apply to the extent severance benefits provided in the
Agreement are subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidance thereunder and any state law of similar effect (collectively
“Section 409A”). Severance benefits shall not commence until you have a “Separation from Service” (as defined under U.S. Treasury Regulation
Section 1.409A-l(h), without regard to any alternative definition thereunder). Each installment of severance benefits is a separate “payment” for purposes of Treasury Regulations Section l.409A-2(b)(2)(i), and the severance benefits are intended to satisfy the exemptions from application of Section 409A provided under Treasury Regulations Sections
l.409A-l(b)(4), l.409A-l(b)(5) and 1.409A-l(b)(9). However, if such exemptions are not available and you are, upon Separation
from Service, a “specified employee” for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under Section 409A, the timing of the severance benefits payments shall be delayed
until the earlier of (i) six (6) months and one day after your Separation from Service, or (ii) your death. 
 You shall receive
severance benefits only if you execute and return to the Company the Release within the applicable period set forth therein and permit such Release to become effective in accordance with its terms, which date may not be later than sixty
(60) days following the date of your Separation from Service (such latest permitted date, the “Release Deadline”). If the severance benefits are not covered by one or more exemptions from the application of
Section 409A and the Release could become effective in the calendar year following the calendar year in which your Separation from Service occurs, the Release will not be deemed effective any earlier than the Release Deadline. None of the
severance benefits will be paid or otherwise delivered prior to the effective date of the Release. Except to the minimum extent that payments must be delayed because you are a “specified employee” or until the effectiveness of the Release,
all amounts will be paid as soon as practicable in accordance with the schedule provided herein and in accordance with the Company’s normal payroll practices. 

The severance benefits are intended to qualify for an exemption from application of Section 409A or comply with its requirements to the
extent necessary to avoid adverse personal tax consequences under Section 409A, and any ambiguities herein shall be interpreted accordingly. 

  
 7ck0000889123-ex102_10.htm

EXHIBIT 10.2

 

SECURED PROMISSORY NOTE

 

			
	
$850,000.00
	
 
	
September 30, 2020 

 

FOR VALUE RECEIVED, receipt of which is hereby acknowledged, Redwood Mortgage Investors VIII, a California limited partnership (“Maker”), promises to pay to Redwood Mortgage Investors IX, LLC, a Delaware limited liability company (“Payee”), the principal sum of Eight Hundred and Fifty Thousand Dollars ($850,000.00) (“Principal”) together with interest as provided in this Secured Promissory Note (“Note”) and on the following terms and conditions: 

1. Secured Note. This Note is secured by that certain Pledge and Security Agreement of even date herewith, entered into by and between Maker and Payee (the “Pledge Agreement”). All capitalized terms not otherwise defined herein shall have the meanings given in the Pledge Agreement. 

2. Maturity Date. All unpaid Principal, Interest and any and all other sums payable to Payee under this Note shall be due and payable, in full, on the earlier of: (i) the closing of the Purchase Transaction contemplated in the Pledge Agreement; and (ii) November 30, 2020 (the “Maturity Date”). 

3. Interest. In addition to the repayment of the Principal amount of this Note, Maker shall pay to Payee interest in the amounts provided herein (collectively referred to herein as “Interest”). 

(a) If Principal is repaid to Payee upon the closing of the Purchase Transaction, Interest payable to Payee on the corresponding Maturity Date shall be Interest equal to the sum of following: (i) Interest in an amount equal to the Payee’s Pro Rata Share of the weighted average interest that accrues on the Loans Held for Sale from the date of this Note through the closing of the Purchase Transaction and corresponding Maturity Date; and (ii) Payee’s Pro Rata Share of any prepayment premium payable to Maker in the Purchase Transaction. For the purposes of this Note, the Payee’s “Pro Rata Share” means the fraction, expressed as a percentage, the numerator of which is the aggregate principal balance of the Loans Held for Sale and the denominator of which is the Principal amount of this Note as of the Purchase Transaction closing and corresponding Maturity Date. 

(b) If the Purchase Transaction fails to close by the November 30, 2020, Maturity Date or the provisions of subsection (a) are otherwise inapplicable: (i) Interest payable to Payee on the Maturity Date shall be equal to the Payee’s Pro Rata Share of the weighted average interest that accrues on the Loans Held for Sale from the date of this Note through the Maturity Date; and (ii) Payees Pro Rata Share of the prepayment premium described in subsection (a)(ii) above shall be payable to Maker if and when the Purchase Transaction is closed and the prepayment premium is paid by the purchaser. 

4. Payment. No payments shall be due from Maker under this Note prior to the Maturity Date. On the Maturity Date, Maker shall make a lump sum payment to Payee which shall include all unpaid Principal, all Interest and any and all other sums due under this Note. This Note may be prepaid at any time by paying all unpaid Principal and all Interest payable as of the date of prepayment. All payments made by Maker hereunder shall be applied first to Interest, then to the outstanding Principal.

5. Default. The occurrence of any of the following (each, an “Event of Default”), shall constitute a default hereunder:

(a) Failure of Maker to pay all amounts due under this Note on the Maturity Date. 

(b) Default in the performance of any obligation contained in the Pledge Agreement or any other instrument (including any amendment, modification or extension thereof) given by Maker for the purpose of securing this Note. 

(c) Maker shall commence (or take any action for the purpose of commencing) or Maker shall have commenced against it any proceeding under any bankruptcy, reorganization, readjustment of debt or similar law or stature, a receiver, trustee or custodian is appointed for a substantial part of Maker’s assets, Maker makes assignment for the benefit of creditors, or Maker is otherwise deemed to be insolvent. 

6. Remedies. Upon the occurrence of any Event of Default, Payee, at its option and without further notice, demand, or presentment for payment to Maker or others, may declare immediately due and payable the unpaid Principal balance of this Note and all Interest payable thereon together with all other sums owed by Maker under this Note. Payment of such sums may be enforced and recovered in whole or in part at any time by one or more of the remedies provided to Payee under this Note and the Pledge Agreement. 

 

35701.3 16955818.1

 

7. Remedies Cumulative. The rights and remedies of Payee provided in this Note and the Pledge Agreement are cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion Payee, and may be exercised as often as occasion therefor shall occur. The failure of the Payee to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. 

8. Costs. Maker agrees to pay immediately upon demand all costs, expenses and fees, including without limitation reasonable attorneys’ fees incurred by Payee in any proceeding for the collection of the debt evidenced by this Note, in any litigation or controversy arising from or connected with the enforcement of this Note or the Pledge Agreement, and/or in any proceedings to enforce payment of Maker’s obligations hereunder by an action or participation in, or in connection with, a case or proceeding under Chapter 7, 11 or 13 of the Bankruptcy Code, or any successor statute thereto. 

9. Assignment. This Note may not be assigned, transferred, pledged or hypothecated by Maker without the prior written consent of Payee, which may be withheld by Payee in its sole discretion. Payee shall have the absolute right to assign this Note without Maker’s consent 

10. Severability. If any provision of this Note, or the application of it to any party or circumstance is held to be invalid, such provision shall be ineffective, but the remainder of this Note, and the application of such provision to the other parties or circumstances, shall not be affected thereby. 

 

	
MAKER:
	
REDWOOD MORTGAGE INVESTORS VIII

	
 
	
a California limited partnership

	
 
	
 
	
 

	
 
	
By:
	
Redwood Mortgage Corp.,

	
 
	
 
	
a California corporation, its General Partner

	
 
	
 
	
By:
	
/s/ Michael Burwell
	
 

	
 
	
 
	
 
	
Michael Burwell, President
	
 

 

 

 

 

3

 

35701.3 16955818.1 

 

 

PLEDGE AND SECURITY AGREEMENT 

This Pledge and Security Agreement (this “Agreement”) is made and entered into on September 30, 2020, (“Effective Date”) by and between Redwood Mortgage Investors IX, LLC, a Delaware limited liability company (the “Secured Party”), and Redwood Mortgage Investors VIII, a California limited partnership (“Pledgor”), with reference to the following facts: 

RECITALS 

A. Contemporaneously herewith, Secured Party has made a short term loan to Pledgor in the amount of $850,000 (the “Loan”). which Loan is evidenced by the that certain Secured Promissory Note made by Pledgor in favor of Secured Party and dated as of the Effective Date hereof (the “Secured Note”). 

B. Peldgor is a mortgage fund in the business of making loans secured by California real estate and, as of the Effective Date, Pledgor is holding the loans identified in Exhibit A of this agreement for sale to third parties (the “Loans Held for Sale”). Pledgor has received and is assessing competing bids for the purchase of its Loans Held for Sale and currently expects that a purchase and sale transaction with one of existing bidders will occur and be closed in October or November of 2020 (the “Purchase Transaction”). Pledgor also intends to utilize the proceeds from the Loan Purchase Transaction to: (i) repay all of Pledgor’s obligations due to Western Alliance Bank (“Credit Line Lender”) under its existing credit line with Credit Line Lender (“Credit Line Agreement”) that are secured by the Loans Held for Sale (as applicable) (the “Credit Line Obligations”); and (ii) repay all of the obligations due to Secured Party under the Secured Note. 

D. Secured Party is only willing to make the Loan to Pledgor on the express condition that the Loan and Pledgor’s obligations to Secured Party under the Secured Note be secured by a pledge of Pledgor’ s interest in the Purchase Transaction proceeds (net of the Credit Line Obligations), Pledgor’s right to receive payments under the Loans Held for Sale (after payment of all applicable Credit Line Obligations) and all other Collateral (as defined herein) on the terms set forth in this Agreement. 

AGREEMENT 

NOW, THEREFORE, in consideration of the covenants and agreements set forth herein, the parties hereby agree as follows: 

I. Recitals. The above stated Recitals are true and correct as of the Effective Date and are hereby incorporated into this Agreement in their entirety. 

2. Pledge of Collateral. Pledgor hereby pledges and grants to Secured Party, as collateral security for the prompt and complete payment and performance of the Obligations (as defined in Section 3, below), a first priority security interest in all right title and interest of Pledgor, whether now existing or hereafter from time to time arising or acquired in and to the following (“Collateral”): 

(a) all sale proceeds payable to Pledgor from the Purchase Transaction and any other sale of the Loans Held for Sale to the extent they exceed the Credit Line Obligations with respect the Loans Held For Sale (as applicable); 

(b) all payment premiums payable to Pledgor with respect to the sale of any of the Loans Held for Sale, whether in a currently contemplated Purchase Transaction or otherwise; and 

(c) all payments of principal, interest and other monies due or to become due with respect to the Loans Held for Sale in excess of the Credit Line Obligations payable with respect to any Loans Held For Sale (as applicable); and 

(d) all claims, rights and interests in proceeds, collections, and recoveries with respect to the foregoing. 

3. Secured Obligations. The pledge set forth in Section 2, is made by Pledgor in favor of Secured Party to secure the prompt and complete performance of Pledgor’s obligations under the Secured Note and this Agreement (collectively, the “Obligations”). 

4. Perfection of Security Interest. This Agreement shall constitute a security agreement under California Uniform Commercial Code (“UCC”). Pledgor acknowledges that the perfection of the security interest provided for herein shall be made by filing a financing statement in the form attached hereto as Exhibit B (“Financing Statement”) with the California Secretary of state. Pledgor hereby authorized Secured Party to file the Financing Statement and to take any other actions and make any 

 

	
	
16918003.2 

 

 

other filings Secured Party deems necessary to perfect or continue the perfection of the security interest granted by Pledgor under this Agreement. 

5. Representations and Warranties; Covenants. 

(a) Pledgor hereby represents and warrants to the Secured Party that Pledgor has good title (to the Collateral, free and clear of all claims, pledges, security interests, liens or encumbrances of every nature whatsoever. 

(b) Pledgor agrees that, until the Obligations are fully satisfied, Pledgor will not (whether voluntarily, involuntarily or by operation of law) sell, assign, dispose or otherwise transfer (or attempt to sell, assign, dispose or otherwise transfer), or grant or create (or attempt to grant or create) any security interest, lien, pledge, claim or other encumbrance with respect to, any of the Collateral. Any transfer or encumbrance of any Collateral in violation of this Section 5(b) shall be deemed null and void ab initio. 

6. Rights on Default. Upon the occurrence of a default by Pledgor with respect the Obligations, Secured Party shall have all of the rights and remedies granted to the Secured Party under the UCC and any other applicable laws, and such rights, powers and remedies will be exercisable by the Secured Party with respect to all or any portion of the Collateral. 

7. Further Assurances. Pledgor and Secured Party hereby agree that, from time to time, Pledgor will promptly execute, deliver and file such instruments, certificates and documents and take such further acts as the Secured Party may reasonably request in order to perfect, preserve, protect and defend the pledge or security interest granted or purported to be granted hereunder or to enable the Secured Party to exercise and enforce its rights and remedies hereunder with respect to any or all of Collateral. 

8. Waiver. No failure, forbearance or delay by the Secured Party to insist upon the strict performance of any term, condition, covenant or agreement of this Agreement, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, condition, covenant or agreement or of any such breach, or preclude the Secured Party from exercising any such right, power or remedy at any later time or times. No waiver of any of the provisions contained in this Agreement shall be valid unless made in writing and executed by the waiving party. 

9. Miscellaneous. 

(a) Th is Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to any conflict of laws principles of that or any other jurisdiction. 

(b) This Agreement and the Secured Note constitute the entire agreement between the parties with respect to the subject matter hereof, and supersede any prior agreements with respect to the subject matter hereof. 

(c) If any provision of this Agreement is held to be invalid or unenforceable, the invalidity or enforceability of any such provision shall not affect the validity or enforceability of any other provision hereof. This Agreement may not be assigned by either party without the prior written consent of the other party. Any assignment in violation of this Section 9(c) shall be null and void. This Agreement shall (i) be binding upon the Pledgor’s successors and assigns and (ii) inure to the benefit of the successors and permitted assigns of the Secured party. 

(d) If any dispute between the parties under this Agreement or the Secured Note results in litigation or arbitration, the prevailing party shall be entitled to recover all reasonable costs incurred by such party in connection with such action, including, but not limited to, reasonable attorneys’ fees and expenses and, if Secured Party is the prevailing party, Secured Party’s reasonable collection costs. 

(e) All headings are used herein for convenience of reference only and shall not be used to construe or interpret this Agreement. Unless varied by this Agreement, all terms used herein which are defined by the Delaware Uniform Commercial Code shall have the same meanings hereunder as assigned to them by the Delaware Uniform Commercial Code. 

 

 

 

	
	
16918003.2 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Pledge & Security Agreement effective as of the Effective Date. 

 

	
SECURED PARTY
	
PLEDGOR:

	
 
	
 

	
REDWOOD MORTGAGE INVESTORS IX, LLC
	
REDWOOD MORTGAGE INVESTORS VIII

	
a Delaware limited liability company
	
a California limited partnership

	
 
	
 
	
 
	
 

	
By:
	
Redwood Mortgage Corp.,
	
By:
	
Redwood Mortgage Corp.,

	
 
	
a California corporation, its Manager
	
 
	
a California corporation, its General Partner

	
 
	
By:
	
/s/ Michael Burwell
	
 
	
By:
	
/s/ Michael Burwell

	
 
	
 
	
Michael Burwell, President
	
 
	
 
	
 
	
Michael Burwell, President
	
 

 

 

 

 

	
	
16918003.2 

 

 

 

EXHIBIT A

LOANS HELD FOR SALE

 

					
	
Loan Number.
	
Name of Borrower
	
Original Principal Balance

	
 
	
 
	
 
	
 
	
 

	
4715
	
University J, LLC
	
$
	
1,600,000.00
	
 

	
 
	
 
	
 
	
 
	
 

	
4683
	
Clara J., LLC
	
$
	
2,300,000.00
	
 

 

 

16918003.2

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