Document:

Exhibit 10.7

 

 

PROTOKINETIX, INCORPORATED

DIRECTOR CONSULTING AGREEMENT

This DIRECTOR CONSULTING AGREEMENT (the “Agreement”) is made and entered into as of December 23, 2015 and made effective as of January 1, 2016 (the “Effective Date”), by and between ProtoKinetix, Incorporated, a Nevada corporation (“Company”), and Edward P. McDonough, an individual (the “Director”).

WHEREAS, the Company is a bio-technology company in the business of developing anti-aging glycoproteins (“AAGP”) for the purpose of enhancing cell survival and health in various applications including transplant procedures, engraftment of tissue and cell preservation; and

WHEREAS, the Company and the Director entered into an agreement to perform directorial services for the Company due to his profession as a certified public accountant and his financial experience effective July 1, 2015 (the “Prior Director Agreement”); and

WHEREAS, the Company and the Director desire to supersede the Prior Consulting Agreement and enter into a new agreement to perform certain services for the Company and the Director has agreed to provide such services, on the terms and conditions set forth herein.

AGREEMENT:

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Director agree as follows:

1.            Services.

(a)            General Services.  During the Term (as defined below) of this Agreement the Director will provide the Company with such services as specified herein on a proactive basis or as the Company may request, from time to time, as is normally expected of a director of a public company including but not limited to the following (the “Services”):

(i)      Act as chairman of the Company’s audit committee;

(ii)     Provide advice in the evaluation of qualified, capable, reputable individuals, to fill director and management positions and thereby attempt to develop a superior management and operational capability for the Company;

(iii)    Provide advice in the preparation by the Company of information presentations, planning of approaches and analysis of financial proposals and presentations for the solicitation of expressions of interest of, contracting of, and closing of financings with potential investors;

(iv)    Provide advice with respect to corporate structuring and financing, including mergers, reverse mergers, spin-offs, acquisitions and dispositions;

(v)     Provide advice with respect to public company issues;

(vi)    Provide advice in the identification and development of strategic alliances, partnerships, and joint ventures; and

 

 

 

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(vii)   Provide such other advice as the board or management may reasonably request.

Notwithstanding anything to the contrary herein, the Director shall not be required to spend any set number of hours, but shall use commercially reasonable efforts to fulfill its obligations hereunder.

2.            Compensation.

(a)            Expenses.  Promptly upon the completion of each month of Services, but no later than the 10th day of the following month, the Director shall provide the Company with an invoice for Permitted Expenses (defined below).  Such invoice shall be accurate, complete, and include sufficient detail and receipts to substantiate amounts due hereunder.  Amounts due shall be payable within 30 business days of the Company’s receipt of a correct and undisputed invoice from the Director.  “Permitted Expenses” include the following: (i) when requested by the Company, reasonable expenses for travel, and (ii) other expenses specifically approved by the Company in writing.  Notwithstanding the above, the Company will not be responsible for any single expense in excess of $500 or aggregate expenses in any one month of more than $2,000 without prior written approval of the Company.

(b)            Stock Option.  On the Effective Date, the Director will receive an option to purchase 1,000,000 shares of common stock of the Company pursuant to the Company’s 2015 Stock Option and Stock Bonus Plan and the Stock Option Agreement between the Company and the Director dated January 1, 2016.

3.            Ownership.  (a) Ownership of Work Products.  To the extent that the Services provided hereunder include original material subject to copyright (referred to as “Work Product”), the Director agrees that the Services are done as a “work for hire” as that term is defined under U.S. copyright law, and that as a result, the Company shall own all copyrights in and to the Work Product.  To the extent that the Work Product does not qualify as a work for hire under applicable law, and to the extent that the Work Product includes material subject to copyright, patent, trade secret, or other proprietary right protection, the Director hereby assigns to the Company, its successors and assigns, all right, title and interest in and to the Work Product, including all copyrights, patents, trade secrets, and other proprietary rights therein (including renewals thereof).  The Director shall execute and deliver such instruments and take such other action as may be required and requested by the Company to carry out the assignment contemplated by this paragraph.  To the extent permitted by applicable law, the Director hereby waives all moral rights in and to the Work Product.

(b)            License for Prior Works.  By incorporating into any Services any original work or authorship created prior to this Agreement (“Prior Works”), the Director thereby grants the Company a worldwide, perpetual, nonexclusive, transferable license to use, distribute, publish, or publicly display such Prior Works and modify such Prior Works as incorporated into the Services.

(c)            Ownership of Equipment.  Unless otherwise expressly set forth elsewhere in this Agreement, any and all tangible equipment, materials, documentation, or other items provided by the Company in connection with this Agreement shall remain the property of the Company.

 

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(d)            Ownership of Intellectual Property.  The Company shall retain title to and all rights in all intellectual property provided by the Company in connection with the Services, including, but not limited to, any know-how related to the Services or products provided or developed in the course of the Director’s Services or the creation of Work Product, such as hardware, software, data, media or other tools or technologies.

4.            Confidentiality.

(a)            Nature of Confidential Information.  In this Agreement, “Confidential Information” includes, but is not limited to, information, whether or not in written form, which has a business purpose and is not known or generally available from sources outside the Company or typical of industry practice, including but not limited to, the Company’s internal structure, financial affairs, programs, software systems, procedures, manuals, confidential reports, marketing methods, the amount, nature and type of services and methods used and preferred by the Company’s vendors and customers and the fees paid by such persons or entities; the identity of the Company’s present and prospective customers and vendors; customer and vendor lists; any data relating to a customer or vendor of the Company; the Company’s business arrangements and costs; and information regarding earnings, forecasts, reports and technical data of the Company, provided that Confidential Information does not include:

(i)      Information that is in the public domain at the date hereof or becomes part of the public domain after the date hereof through no act or omission of the Director;

(ii)     Information which the Director can prove was in its possession prior to the date hereof and was not acquired by the Director from the Company or any person under a confidentiality obligation to the Company;

(iii)    Documents or information independently developed by or for the Director; and

(iv)    Information received by the Director without restriction as to disclosure from a third party who has the lawful right to disclose the same.

(b)            Agreement to Keep Information Confidential.  The Director acknowledges the confidential and proprietary nature of the Confidential Information, shall keep all Confidential Information in strict confidence and will not disclose or dispose of any Confidential Information to any third party.  The Director may, however, disclose the Confidential Information to its officers, employees, advisers and agents who need to know the Confidential Information for the purposes of the evaluating and assessing the Confidential Information.  All individuals receiving any Confidential Information under this Agreement shall be directed by the Director to treat the Confidential Information confidentially pursuant to the terms of this Agreement.  Nothing in this Agreement prevents the Director from disclosing any Confidential Information as may be required by applicable law, regulation, court order or securities regulatory authority.

 

 

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(c)            No-Trade.  The Director acknowledges that it may be in possession of material nonpublic information which is considered to be any information concerning the Company that is both (i) material (meaning the average investor would want to know such information before deciding whether to buy, sell or hold securities of the Company, or, in other words, information that could affect the market price of Company securities); and (ii) nonpublic (meaning the information has not been disclosed in the Company’s filings with the SEC or in a press release issued by the Company that has been broadly disseminated to the investing public).  Information is not considered public until the second business day after such disclosure in an SEC filing or press release.  If such material nonpublic information is disclosed to the public, the Director may not trade in Company securities until the second business day after such disclosure (i.e., the second day after the applicable SEC filing or press release).  The prohibition on trading while in possession of Material Nonpublic Information continues for as long as any information the Director has is both material and non-public and can continue even after the Director’s engagement with the Company has terminated.

(d)            Compliance with Laws.  The Director shall comply with all laws, whether federal, provincial or state, applicable to the Director position or Services provided.  The Director may, at his option, retain counsel experienced in these matters to work with the Director and the fees and disbursements of such counsel and accountants will be paid for by the Company, provided that the Director has obtained the prior written approval of the Company to incur such expenses.

5.            Termination.

(a)            Term. This Agreement shall commence as of the Effective Date and continue until December 31, 2016 (the “Term”).

(b)            Survival.  In the event of termination of this Agreement for any reason, Sections 3 through 6 shall survive indefinitely.

6.            Indemnification.

(a)            Indemnification.  Each party agrees to indemnify and save the other, its  affiliates and their respective directors, officers, consultants and agents (each an “Indemnified Party”) harmless from and against any and all losses, claims, actions, suits, proceedings, damages liabilities or expenses of whatsoever nature or kind, including any investigation expenses incurred by any Indemnified Party to which an Indemnified Party may become subject by reason of breach of this Agreement or of law by the defaulting party.  Notwithstanding the above, the Company shall indemnify and hold harmless the Director from and against any claims, damages, losses or expenses incurred by the Director which arise out of any acts or omissions taken in good faith by the Director in connection with or related to the Director’s performance of the Services.

7.            General Terms.

(a)            Return of Work Product.  The Director agrees, promptly upon completion of the Services or other termination of this Agreement, to deliver to the Company all Work Product and to return all notes, designs, code, storage devices, documents and any other Company materials, including Confidential Information.  The Director shall not retain any such materials without the Company’s written approval.

 

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(b)            No Employer-Employee Relationship.  The Company and the Director understand, acknowledge, and agree that the Director’s relationship with the Company will be that of an “independent contractor” and not that of an employee.  The Director will be an “independent contractor” and the Director will be entitled to work at such times and places as the Director determines appropriate, will not be under the direction or control of the Company or the manner in which the Director performs the Services.  The Director will not be entitled to any of the benefits which the Company may make available to its employees (which benefits may in the future include, but not be limited to, group health or life insurance, profit-sharing or retirement benefits).

(c)            Taxes.  The Director is and will be solely responsible for, and will file, on a timely basis, all tax returns and payments required to be filed with, or made to, any federal, state or local tax authority (including, but not limited to Social Security, federal, state, Medicare, and all of other taxes) with respect to the performance of Services and receipt of fees under this Agreement.  No part of the compensation payable to the Director will be subject to withholding by the Company for the payment of any social security, federal, state or any other employee payroll taxes.  If required by the Company, the Director shall prepare and sign such documents affirming the Director’s citizenship and residency for tax purposes.

(d)            Client Solicitation.  While providing Services to the Company, the Director shall not solicit work, remuneration or other benefits of any kind directly from any the Company contacts or affiliates without the express, prior written consent of the Company.

(e)            Notices.  All notices, demands, requests, or other communications that may be or are required to be given, served, or sent by any party to any other party pursuant to this Agreement shall be in writing and shall be sent by email, next-day courier, or mailed by first-class, registered or certified mail, return receipt requested, postage prepaid, or transmitted by hand delivery, addressed as follows:

 

	
 

	

If to the Company:

ProtoKinetix, Incorporated

Attn:  Clarence E. Smith, President & CEO

9176 South Pleasants Highway

St. Marys, WV  26170

Tel:            304-299-5070

Email:       csmith@protokinetix.com

If to the Director:

Edward P. McDonough

1226 Washington Avenue

Parkersburg, WV  26101

Tel:            304-428-8091

Email:       ed.mcdonough@mepb.com

	

With a copy to:

Burns Figa & Will PC

Attn: Victoria B. Bantz, Esq.

6400 S. Fiddlers Green Cir., #1000

Greenwood Village, CO  80111

Tel: 303-796-2626

Email: vbantz@bfwlaw.com

 

 

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(f)            Assignment.  This Agreement may not be assigned by either party without prior written consent of the other.

(g)            Entire Agreement. This Agreement, not including any other agreement pursuant to which securities of the Company are issued to the Director, represents the entire agreement between the parties and supersedes all prior negotiations, representations, agreements, arrangements, and understandings, if any, either written or oral, between the parties with respect to the subject matter of this Agreement, none of which shall be used to interpret or construe this Agreement.  If any term, covenant, condition or provision of this Agreement or the documents and instruments executed and delivered in connection herewith is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

(h)            Law Governing.  This Agreement shall be construed and enforced in accordance with the laws of the state of Nevada even though the Director may perform services or reside in other states or countries.

(i)            Amendments.  Neither party may amend this Agreement or rescind any of its existing provisions without the prior written consent of the other party.

(j)            Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and will become effective and binding upon the parties at such time as all of the signatories hereto have signed a counterpart of this Agreement.  All counterparts so executed shall constitute one Agreement binding on all of the parties hereto, notwithstanding that all of the parties are not signatory to the same counterpart.  In all other respects, this Agreement shall continue to remain in full force and effect.  Facsimile or .pdf transmissions containing signatures shall be considered delivery and shall be deemed binding.

(k)            Remedies. As the violation by the Director of the provisions of Sections 3 and/or 4 of this Agreement would cause irreparable injury to the Company, and there is no adequate remedy at law for such violation, the Company shall have the right to seek specific performance or injunctive relief against the Director without the posting of a bond or other security.  The remedies available with respect to the rights and obligations under this Agreement are cumulative, and this section shall not be construed to limit in any manner whatsoever any other rights or remedies that may be available for any breach of this Agreement.

8.            Venue.  All disputes arising out of or relating to this Agreement and all actions to enforce this Agreement shall be adjudicated in the state or federal courts sitting in Denver, Colorado.  The parties hereto irrevocably submit to the jurisdiction of such courts in any suit, action or proceeding relating to any such dispute.  So far as is permitted under applicable law, this consent to personal jurisdiction shall be self-operative and no further instrument or action, other than service of process or as permitted by law, shall be necessary in order to confer jurisdiction upon the undersigned in any such court.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have executed this Director Consulting Agreement on the date first written above.

	
ProtoKinetix, Incorporated

 

 

 

By:

 

/s/ Clarence E. Smith  

Clarence E. Smith, President and CEO

	
Director:

 

 

 

 

/s/ Edward P. McDonough                                                                                    

Edward P. McDonough

 

 

 

 

 

7EX-4.1

 Exhibit 4.1 

FORM OF SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY 

REDWOOD MORTGAGE INVESTORS IX, LLC 

A DELAWARE LIMITED LIABILITY COMPANY 

The undersigned hereby applies to purchase units in REDWOOD MORTGAGE INVESTORS IX, LLC (the “company”) in
accordance with the terms and conditions of the limited liability company operating agreement attached as Appendix A to the prospectus dated. 

1.     Representations and Warranties. The undersigned represents and warrants to the company
and its managers as follows: 
 (a)         I have received the prospectus dated
April 29, 2015, and I accept and agree to be bound by the terms and conditions of the organizational documents of the company. 

(b)        I am aware that this subscription may be rejected in whole or in part by
the managers in their sole and absolute discretion; that my investment, if accepted, is subject to certain risks described in part in “RISK FACTORS” set forth in the prospectus; and that there will be no public market for units, and
accordingly, it may not be possible for me to readily liquidate my investment in the company. 

(c)        I understand that units may not be sold or otherwise disposed of without
the prior written consent of the managers, which consent may be granted or withheld in their sole discretion, that any transfer is subject to numerous other restrictions described in the prospectus and in the limited liability company operating
agreement, and that if I am a resident of California or if the transfer occurs in California, any such transfer is also subject to the prior written consent of the California Commissioner of Business Oversight. I have liquid assets sufficient to
assure myself that such purchase will cause me no undue financial difficulties and that I can provide for my current and anticipated future needs and possible personal contingencies, or if I am the trustee of a retirement trust, that the limited
liquidity of the units will not cause difficulty in meeting the trust’s obligations to make distributions to plan participants in a timely manner. 

(d)        I am of the age of majority (as established in the state in which I am
domiciled) if I am an individual, and in any event, I have full power, capacity, and authority to enter into a contractual relationship with the company. If acting in a representative or fiduciary capacity for a corporation, partnership or trust, or
as a custodian or agent for any person or entity, I have full power or authority to enter into this subscription agreement in such capacity and on behalf of such corporation, partnership, trust, person or entity. 

(e)        I am buying the units solely for my own account, or for the account of a
member or members of my immediate family or in a fiduciary capacity for the account of another person or entity and not as an agent for another. 

(f)        I acknowledge and agree that counsel representing the company, the managers
and their affiliates does not represent me and shall not be deemed under the applicable codes of professional responsibility to have represented or to be representing me or any of the members in any respect. 

(g)        If I am buying the units in a fiduciary capacity or as a custodian for the
account of another person or entity, I have been directed by that person or entity to purchase the unit(s), and such person or entity is aware of my purchase of units on their behalf, and consents thereto and is aware of the merits and risks
involved in the investment in the company. 

  
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 BY MAKING THESE REPRESENTATIONS, THE INVESTOR HAS NOT WAIVED ANY RIGHT OF ACTION AVAILABLE
UNDER APPLICABLE FEDERAL OR STATE SECURITIES LAWS INCLUDING BUT NOT LIMITED TO THE SECURITIES ACT OF 1933. 

2.      Power of Attorney. The undersigned hereby irrevocably constitutes and appoints the
managers, and each of them, either one acting alone, as his true and lawful attorney-in-fact, with full power and authority for him, and in his name, place and stead, to execute, acknowledge, publish and file: 

(a)        The limited liability operating agreement and any amendments thereto or
cancellations thereof required under the laws of the State of Delaware; 

(b)        Any other instruments, and documents as may be required by, or may be
appropriate under, the laws of any state or other jurisdiction in which the company is doing or intends to do business; and 

(c)        Any documents which may be required to effect the continuation of the
company, the admission of an additional or substituted member, or the dissolution and termination of the company. 
 The
power of attorney granted above is a special power of attorney coupled with an interest, is irrevocable, and shall survive the death or incapacity of the undersigned or, if the undersigned is a corporation, partnership, trust or association, the
dissolution or termination thereof. The power of attorney shall also survive the delivery of an assignment of units by a member; provided, that where the assignee thereof has been approved by the managers for admission to the company as a
substituted member, such power of attorney shall survive the delivery of such assignment for the sole purpose of enabling the managers to execute, acknowledge, file and record any instrument necessary to effect such substitution. 

3.        Acceptance. This subscription agreement will be accepted or rejected
by the managers within thirty (30) days of its receipt by the company. The managers also reserve the right to revoke its acceptance within such thirty (30) day period. Upon acceptance, this subscription will become irrevocable and
non-cancelable and subscription funds are non-refundable for any reason. The undersigned is obligated to purchase the number of units specified herein, for the purchase price of $1 per unit. The managers will return a countersigned copy of this
subscription agreement to accepted members, which copy (together with my canceled check) will be evidence of my purchase of units. 

4.        Payment of Subscription Price. The full purchase price for units is
$1 per unit, payable in cash concurrently with delivery of this subscription agreement. I understand that my subscription funds will be deposited into a subscription account upon receipt, but that I will not be admitted as a member of the company
until this subscription agreement has been accepted by the managers. If my subscription is accepted, I will be admitted as a member of the company not later than the last day of the calendar month following the date my subscription was accepted. In
the interim, my subscription funds will earn interest at money market account rates. Such interest will be returned to me after I am admitted to the company. 

5.        THE UNDERSIGNED AGREES TO INDEMNIFY AND HOLD REDWOOD MORTGAGE INVESTORS
IX, LLC, A DELAWARE LIMITED LIABILITY COMPANY, AND ITS MANAGERS AND OTHER AGENTS AND EMPLOYEES HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, AND DAMAGES, INCLUDING, WITHOUT LIMITATION, ALL ATTORNEYS’ FEES WHICH SHALL BE
PAID AS INCURRED) WHICH ANY OF THEM MAY INCUR, IN ANY MANNER OR TO ANY PERSON, BY REASON OF THE FALSITY, INCOMPLETENESS OR MISREPRESENTATION OF ANY INFORMATION FURNISHED BY THE UNDERSIGNED HEREIN OR IN ANY DOCUMENT SUBMITTED HEREWITH. 

  
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 6.        Signature. The
undersigned represents that: (a) I have read the foregoing and that all the information provided by me is accurate and complete; and (b) I will notify the manager(s) immediately of any material adverse change in any of the information set
forth herein which occurs prior to the acceptance of my subscription. 
 Type of Ownership: (check one) 

 

							
	     [  ]
	  	INDIVIDUAL	  	*  [  ]	  	IRA (Investor and Custodian must sign)
				
	     [  ]
	  	 TRUST (Trustee signature required)

(Title page, Successor Trustee page and signature pages of the Trust Agreement must be enclosed)
	  	*  [  ]	  	ROTH IRA (Investor and Custodian must sign)
		  	  		  	
		  	  	*  [  ]	  	SEP/IRA (Investor and Custodian must sign)
				
	 *  [  ]
	  	JOINT TENANTS WITH RIGHTS OF SURVIVORSHIP	  	[  ]	  	PENSION PLAN (Trustee signature required)
				
	 *  [  ]
	  	COMMUNITY PROPERTY	  	[  ]	  	PROFIT SHARING PLAN (Trustee signature required)
				
	 *  [  ]
	  	TENANTS IN COMMON	  	[  ]	  	401(k) (Trustee signature required)
				
	     [  ]
	  	 TOD – Transfer On Death

(must be titled as an Individual or as
 Joint Tenants only –
special form required)
	  	[  ]	  	OTHER (Please describe)
		  	  		  	
		  	  		  	 

 * Two or more signatures required 
  

							
	 1.      INVESTOR NAME AND ADDRESS
	  	 Complete this section for all accounts. If asset is in a qualified plan Item 2 must also be completed. All checks and correspondence
will go to this address unless another address is listed in Items 2 or 5 below.

		  	 [  ] Mr.        
[  ] Mrs.        [  ] Ms.         [   ] Dr.

				
		  	 	  	 	  	 
		  	 Name as it will appear on the account (How title should be held)

				
		  		  		  	
		  	(Additional Name(s) if held in joint tenancy, community property, tenants-in-common)
				
		  		  		  	
		  	Street Address	  	 	  	 
				
		  		  		  	
		  	City	  	State	  	    Zip Code
				
		  		  		  	
		  	Home Phone Number	  		  	 Social Security #/Taxpayer ID#

				
		  		  		  	A Social Security Number or Tax ID is required for all accounts.
		  	Alternate Phone Number	  		  
				
		  		  		  	

  
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	 2.     CUSTODIAN REGISTRATION
	  	Name of Custodian:	  	
		  		  	Please print here the exact name of Custodian
		  		  		  	
		  	 Address
	  	 	  	 
				
		  		  		  	
		  	 City
	  	State	  	Zip Code
				
		  		  		  	
		  	 Taxpayer ID#
	  		  	 Client Account Number

				
		  		  		  	
	(X)	  	 CUSTODIAN SIGNATURE
	  	
		  		  	
	 3.     INVESTMENT

Minimum initial investment 5,000 units ($5,000); minimum additional investment for existing member 1,000 units ($1,000). Partial unit
purchases are acceptable.
	  	  
 Number of units to be purchased

 
 Amount of payment enclosed

 
 Please make check payable to Redwood Mortgage Investors IX, LLC
	  		  	  

                       
                                         
                            

 

                       
                                         
                            

		  	 Check one: [  ] Initial Investment
	  		  	 [  ] Additional Investment

	
	A completed Subscription Agreement is required for each initial and additional investment
		
	 4.     DISTRIBUTIONS
	  	 Please check one of the following. Please note that all custodial account distributions not reinvested pursuant to the Distribution Reinvestment Plan
will be directed to the custodian listed in Item 2.

		
		  	 Check One:  [  ] I elect to participate in the Distribution Reinvestment Plan (DRP) with
              respect to all of my Units.

		
		  	 [  ]    I elect to have distributions paid with respect to all of my
Units.

		
		  	 [  ]    I elect to participate in the DRP with respect to
                         of my Units and to have distributions paid to me with respect to
                         of my Units.

  

							
	 5.     ALTERNATE ADDRESS FOR DISTRIBUTIONS
	  	If cash distributions are to be sent to an address other than that listed in Item 1 or 2, please enter the information here. All other communications will be mailed to the investor’s registered address of
record under Item 1. In no event will the company or its affiliates be responsible for any adverse consequences of direct deposits.
			
		  	______________________________	  	___________________
		  	Name	  		  	Client Account #
		
		  	____________________________________________________________________________
		  	Address	  		  	
		
		  	____________________________________________________________________________
		  	City	  	State	  	Zip Code
		
	 DIRECT DEPOSIT (Electronic Funds

Transfer)
	  	Check one:                     Checking  
[  ]                 Savings [  ]
		
		  	(Must attach original voided check for checking account deposits, deposit slip for savings account deposits)

  
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	6.	  	SIGNATURES                      Please read and initial each of the representations below:
					
		  		  		  	    Investor    	  	 Joint

    Investor    

				
	(a)	  	I have received the Prospectus for the company, and I accept and agree to be bound by the terms and conditions of the Prospectus	  	__________	  	__________
				
	(b)	  	I have a net worth (exclusive of home, furnishings, auto) of $70,000 and an annual gross income of at least $70,000 or a net worth of $250,000 (exclusive of home, furnishings, auto) or I meet
the higher suitability requirements imposed by my state of residence as set forth in the prospectus (including any supplements thereto) under “Investor Suitability Standards.”	  	__________	  	__________
				
	(c)	  	I am purchasing the units for my own account, and I acknowledge that there is no public market for the units.	  	__________	  	__________
				
	(d)	  	I acknowledge my acceptance as a member is subject to the discretion of the manager(s) as agreed to under Section 1(b). The acceptance process includes, but is not limited to, reviewing
the Subscription Agreement for completeness and signatures, conducting an Anti-Money Laundering check as required by the USA Patriot Act and payment of the full purchase price of the shares.	  	__________	  	__________
				
	(e)	  	I have been informed by the participating broker-dealer firm specified herein, if any, of all pertinent facts relating to the lack of liquidity or marketability of this investment.	  	__________	  	__________
	
	You do not waive any right you may have under the Securities Act of 1933, the Securities Exchange Act of 1934 or any state securities law by executing the Subscription Agreement. A sale of units may not be completed
until after you have been in receipt of the final Prospectus for at least five (5) business days. If your Subscription Agreement is accepted, we will return to you a countersigned copy of the Subscription Agreement, which will constitute
confirmation of your purchase of units.
			
		  		  	IN WITNESS WHEREOF, the undersigned has executed below this              day of
                    , 20        , at
                                        
(City)
			
		  		  	Investor’s primary residence is in                       (State)
			
		  	(X)	  	________________________________________
		  		  	(Investor Signature and Title)
			
		  	(X)	  	________________________________________
		  		  	(Investor Signature and Title)	  	

  

							
	7.	  	 REGISTERED REPRESENTATIVE/
 FINANCIAL
ADVISOR INFORMATION
	  	 The registered representative or advisor, by signing below, certifies that he or she has reasonable grounds to believe, on the basis of
information obtained from the investor concerning his or her investment objectives, other investments, financial situation and needs and any other information known by the selling broker-dealer, if any, that investment in the units is suitable for
the investor and that suitability records are being maintained; and that he or she has informed the investor of all pertinent facts relating to the liquidity and marketability of the units.

  
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	 	  	 	  	Original Signatures Required
			
		  		  	Registered Representative/Advisor
				
		  		  	Name	  	 
				
		  		  	Street Address	  	 
				
		  		  	City, State, Zip Code	  	 
				
		  		  	Phone Number	  	 
				
		  		  	Email	  	 
			
		  	X	  	___________________________________________
		  		  	Registered Representative/Advisor Signature
			
	8.	  	BROKER-DEALER INFORMATION	  	 The undersigned broker-dealer hereby certifies that (i) a copy of the prospectus, as amended and/or supplemented to date, has been delivered
to the above investor the requisite number of days prior to the date the Subscription Agreement was delivered to the company; and (ii) that the appropriate suitability determination as set forth in the prospectus has been made and that the
appropriate records are being maintained.

				
		  		  	Broker-Dealer Name	  	 
				
		  		  	Street Address	  	 
				
		  		  	City, State, Zip Code	  	 
			
		  	X	  	___________________________________________
		  		  	 Broker-Dealer Authorized Signature

(required on all applications by broker-dealer affiliated representatives)

  

					
		 	  

Registered Investment Advisor (RIA) and Non-Commission Sales

 
 [    ] Please check
the box if this investment is made through an RIA charging no commission on this sale or otherwise is made with no commission paid to the RIA or participating broker-dealer.

 
 This option is not available through all
broker-dealers. Please contact Redwood Mortgage Investors for more information.
  

(If an owner or principal or any member of the RIA firm is a FINRA licensed registered representative affiliated with a
broker-dealer, the transaction should be conducted through that broker-dealer for administrative purposes, not through the RIA.)
  
	 	

  
 6 

 Complete this page only if this is an RIA/non-commission sale 

REGISTERED INVESTMENT ADVISOR INFORMATION 

Are you a Registered Investment Advisor (“RIA”) under applicable state or federal
law?             [  ] YES            [  ] NO 

Broker-Dealer Affiliated?   [  ] YES    [  ] NO     Broker-Dealer Name
                                         
    
 The advisor certifies (i) that if the advisor is affiliated with a FINRA firm, that all fees received by him
in connection with this transaction will be run through the books and records of the FINRA member firm in compliance with NASD Notice to Members 96-33, NASD Rule 3040 and FINRA Rule 3270; (ii) that if the investor has elected to pay client
fees from earnings, the advisor hereby represents and warrants that he is a registered investment advisor under applicable federal and/or state securities laws; (iii) that, if applicable, the advisor understands and acknowledges that neither
the company or the managers shall have any liability to him with respect to any client fees paid from members’ earnings under the authorization agreement and that the managers and the company in no way guarantee that there will be sufficient
cash for distribution to members and, thus in the case of a signed authorization agreement, sufficient cash for the member to pay the client fees from earnings; and (iv) that, in any dispute between the advisor and the member regarding payment
of client fees, the company and the managers will respect the wishes of the member and that the managers and the company will have no liability to the advisor as a result thereof. 

Please check applicable box. 
 [  ]
Yes, client fees paid. If client fees are to be paid, the AUTHORIZATION TO MAKE PAYMENTS OF CLIENT FEES (below) must be completed and signed by the investor and the advisor. 

[  ] No client fees paid from earnings or distributions 
  

	
	  

REDWOOD MORTGAGE INVESTORS IX, LLC

	AUTHORIZATION TO MAKE PAYMENTS OF CLIENT FEES
	
FOR MEMBERS WHO UTILIZE THE SERVICES OF REGISTERED INVESTMENT ADVISORS

 

 By signing this authorization the undersigned hereby authorizes and directs the company to pay
to the person or entity set forth below as the payee an estimated annual amount equal to         % (not more than 2% annually) of the undersigned’s capital account (“client fees”). All
client fees payable will be calculated on a monthly basis based upon the capital account balance of the member at the end of the month, and such client fees shall be paid to the advisor on a monthly basis. The capital accounts of the members who
elect to pay client fees through the company will be less than the capital accounts of members who do not pay client fees or who do not pay client fees through the company. 

The undersigned acknowledges and agrees that neither the company nor the manager(s) shall have any liability for disbursements
made pursuant to this authorization. The undersigned acknowledges that all periodic cash distributions by the company are non-cumulative. Further, the undersigned acknowledges that the manager(s) is/are in no way guaranteeing that there will be
sufficient cash flow for periodic cash distributions or that such distributions will be sufficient to make the payments authorized by this agreement. In the event of insufficient earnings, the company and the manager(s) shall have no liability to
the undersigned or the payee. The undersigned further acknowledges and agrees that the company is authorized to comply with this request unless and until this authorization is expressly revoked in writing. 

 

					
	PAYEE (ADVISOR) 1	 		  	INVESTOR
			
	 	 		  	 
	Name of Payee - Please Print	 		  	Name of Investor - Please Print
			
	 	 		  	 
	Authorized Signature of Payee	 		  	Signature of Investor
			
	 	 		  	 
	Firm Name	 		  	Signature of Joint Investor (if applicable)

  
  

1 If the advisor is affiliated with a FINRA broker-dealer firm, all fees received by
him or her in connection with this transaction will be run through the books and records of the FINRA member in compliance with NASD Notice to Members 96-33, NASD Rule 3040 and FINRA Rule 3270. 

  
 7 

											
	(Office Use Only)
			
	9.	  	ACCEPTANCE	  	This subscription accepted
		  	This subscription will not be an effective agreement until it or a facsimile is signed by a manager of Redwood Mortgage Investors IX, LLC, a Delaware Limited Liability Company	  	 REDWOOD MORTGAGE INVESTORS IX, LLC,

A Delaware Limited Liability Company
 1825 S. Grant Street, Suite
250
 San Mateo, CA 94402
 (650) 365-5341

			
		  		  	By: ________________________________________________
						
		  		  	Investor #:	  	___________	  	Date Entered:	  	___________
						
		  		  	Check Amount:	  	  $                    	  	Check Date:	  	___________
						
		  		  	Check Number:	  	___________	  		  	

  
 8 

 SPECIAL NOTICE FOR CALIFORNIA RESIDENTS ONLY 

COMMISSIONER’S RULE 260.141.11 

260.141.11 Restriction on Transfer 
  

	(a)	 The issuer of any security upon which a restriction on transfer has been imposed pursuant to Section 260.141.10 or 260.534 shall cause a copy
of this section to be delivered to each issuee or transferee of such security at the time the certificate evidencing the security is delivered to the issuee or transferee. 

 

	(b)	 It is unlawful for the holder of any such security to consummate a sale or transfer of such security, or any interest therein, without the prior
written consent of the Commissioner (until this condition is removed pursuant to Section 260.141.12 of these rules), except: 

  

	(1)	 to the issuer; 

  

	(2)	 pursuant to the order or process of any court; 

  

	(3)	 to any person described in Subdivision (i) of Section 25102 of the Code or Section 260.105.14 of these rules; 

 

	(4)	 to the transferor’s ancestors, descendants or spouse, or any custodian or trustee for the account of the transferor or the transferor’s
ancestors, descendants, or spouse; or to a transferee by a trustee or custodian for the account of the transferee or the transferee’s ancestors, descendants or spouse; 

 

	(5)	 to holders of securities of the same class of the same issuer; 

 

	(6)	 by way of gift or donation inter vivos or on death; 

  

	(7)	 by or through a broker-dealer licensed under the Code (either acting as such or as a finder) to a resident of a foreign state, territory or country
who is neither domiciled in this state to the knowledge of the broker-dealer, nor actually present in this state if the sale of such securities is not in violation of any securities law of the foreign state, territory or country concerned;

  

	(8)	 to a broker-dealer licensed under the Code in a principal transaction, or as an underwriter or member of an underwriting syndicate or selling
group; 

  

	(9)	 if the interest sold or transferred is a pledge or other lien given by the purchaser to the seller upon a sale of the security for which the
Commissioner’s written consent is obtained or under this rule not required; 

  

	(10)	 by way of a sale qualified under Sections 25111, 25112, 25113, or 25121 of the Code, of the securities to be transferred, provided that no order
under Section 25140 or subdivision (a) of Section 24143 is in effect with respect to such qualification; 

  

	(11)	 by a corporation to a wholly owned subsidiary of such corporation, or by a wholly owned subsidiary of a corporation to such corporation;

  

	(12)	 by way of an exchange qualified under Section 25111, 25112 or 25113 of the Code, provided that no order under Section 25140 or
subdivision (a) of Section 25143 is in effect with respect to such qualification; 

  

	(13)	 between residents of foreign states, territories or countries who are neither domiciled nor actually present in this state; 

 

	(14)	 to the State Controller pursuant to the Unclaimed Property Law or to the administrator of the unclaimed property law of another state; or

  

	(15)	 by the State Controller pursuant to the Unclaimed Property Law or by the administrator of the unclaimed property law of another state if, in either
such case, such person (i) discloses to potential purchasers at the sale that transfer of the securities is restricted under this rule, (ii) delivers to each purchaser a copy of this rule, and (iii) advises the Commissioner of the
name of each purchaser; 

  

	(16)	 by a trustee to a successor trustee when such transfer does not involve a change in the beneficial ownership of the securities;

  
 9 

	(17)	 by way of an offer and sale of outstanding securities in an issuer transaction that is subject to the qualification requirement of
Section 25110 of the Code but exempt from that qualification requirement by subdivision (f) of Section 25102; provided that any such transfer is on the condition that any certificate evidencing the security issued to such transferee
shall contain the legend required by this section. 

  

	(c)	 The certificates representing all such securities subject to such a restriction on transfer, whether upon initial issuance or upon any transfer
thereof, shall bear on their fact a legend, prominently stamped or printed thereon in capital letters of not less than 10-point size, reading as follows: 

“IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY
CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER’S RULES.” 

  
 10 

 Instructions for completing Subscription Agreement 

Redwood Mortgage Investors IX, LLC 

Please follow these instructions and complete each section carefully, as failure to do may result in rejection of your Subscription
Agreement. 
 Type of Ownership (page 2) 

Check the appropriate box to indicate what type of investment you are making. Note under each classification any additional signatures or
documents that may be required. If the investment type you are making is not listed, enter it in the section titled OTHER. 
 Item 1. Investor Name
and Address 
 Enter the full name of the investor. For trust accounts and non-custodial qualified plans enter the name of the
trustee(s) on the first line and the trust or plan name on the second line. On custodial accounts this section must be completed for the benefit plan investor; custodial information is entered in Item 2. 

Enter the investor’s mailing address, phone and Social Security Number or Tax ID Number. If the investment is made in more than one name,
only one Tax ID Number will be used and should be that of the first person listed. 
 Item 2. Custodian Registration 

Custodian should complete this section, entering all pertinent information and signing accordingly. 

Item 3. Investment 
 Enter the
number of units purchased and the dollar amount of the investment. 
 Mark whether the investment is an initial or additional investment.

 Item 4. Distributions 
 Check
the appropriate box to indicate whether the investor elects to participate in the Distribution Reinvestment Plan of the company or to have earnings distributed monthly. 

Each investor who elects to have distributions reinvested agrees to notify the company and the broker-dealer named in the Subscription
Agreement in writing if at any time he or she fails to meet the applicable suitability standards or he or she is unable to make any other representations and warranties as set forth in the prospectus or Subscription Agreement. 

Item 5. Special Address for Distributions 

If distributions are to be sent to an address other than that provided in Item 1 or 2, provide the name, address and account number. 

If distributions are to be made to a checking or savings account via electronic funds transfer, check the appropriate box and attach an
original voided check for checking accounts or an original deposit slip for savings accounts. 
 Your request for EFT deposit may be rejected if it is not
accompanied by the proper bank document as indicated above. 

  
 11 

 Item 6. Signatures 

You are required to execute your own Subscription Agreement and our manager(s) will not accept any Subscription Agreement that has been
executed by someone other than you unless, in the case of fiduciary accounts, the person has been given your legal power of attorney to sign on your behalf, and you meet all of the conditions in the Prospectus and the Subscription Agreement. 

The investor initials each representation separately. If investment is held jointly or severally all investors must initial the
representations. 
 Enter the date, city and state the Subscription Agreement was signed. If investment is held jointly or severally
all investors must sign the Subscription Agreement. Only original signatures will be accepted. 
 Item 7. Registered
Representative/Financial Advisor Information 
 The registered representative or financial advisor must complete and sign this section. 

Registered Investment Advisors should also complete and sign this section. 

Item 8. Broker-Dealer Information 
 All pertinent
broker-dealer information must be included. 
 Subscription Agreements for commission sales must be signed by both the
registered representative and the broker-dealer. Please note that if the registered representative is authorized to sign on behalf of the broker-dealer they must sign section 7 and 8. 

The Subscription Agreement may be rejected if it is not fully completed and signed. 

Only an original, completed and signed Subscription Agreement will be accepted. Photocopied or otherwise duplicated Subscription
Agreements cannot be accepted. 
 Registered Investment Advisor and Non-Commission Sales 

For sales made by RIAs or other non-commission sales, check the box at the end of Item 8 indicating as such. RIAs must also complete page
6 of the Subscription Agreement. 
 If the RIA is taking client fees paid from member earnings he or she must complete the AUTHORIZATION TO
MAKE PAYMENTS OF CLIENT FEES and both the RIA and the investor must sign the authorization. 
 Item 9. Acceptance 

Item 9 is for Redwood Mortgage Investors office use only 

Forward the completed and signed original Subscription Agreement along with your payment to the following address. Wiring instructions are
available. Please contact Investor Services for current wiring instructions. 
 Mailing Address 

Redwood Mortgage Investors IX, LLC 

1825 S. Grant Street, Suite 250 

San Mateo, CA 94402 
 If you
have any questions or require additional assistance in completing the Subscription 
 Agreement, please contact Investor Services at
(800) 659-6593, option 5. 

  
 12

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