Document:

EX-10.4

 Exhibit 10.4 

FORMATION LOAN 
 PROMISSORY NOTE

  

					
	Up to a Maximum of $6,750,000	  		  	 Effective as of
                    , 2005
  

San Francisco, California

 For value received, and in connection with an offering (the “Offering”) of up to $100,000,000 in
units of limited partnership in Redwood Mortgage Investors VIII, a California limited partnership (the “Holder”), Redwood Mortgage Corp., a California corporation (the “Borrower”) promises to pay to Holder up to the principal sum
of NINE MILLION DOLLARS and No/100ths ($9,000,000), 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             , 2005, 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 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 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 partnership interests in the Holder, and all amount payable in connection with unsolicited orders for units received by Borrower, all in accordance with
Section 10.9 of the Sixth Amended and Restated Limited Partnership Agreement of the Holder, dated                      (the “Partnership
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 Partnership Agreement due to the early withdrawal of investors from the Holder. 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 Partnership Agreement due to the early withdrawal of investors from the Holder. 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 the 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. 
 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 rise 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. 

  
 1 

 (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 thereof, 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 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 Michael R. Burwell, Gymno Corporation, a California corporation or Redwood Mortgage Corp., a
California corporation (collectively, the “Initial General Partners”) are removed as general partner(s) of the Holder by the vote of a majority of limited partners of the Holder, and a successor or additional general partner(s) is
thereafter designated, and if such successor or additional general partner(s) begins using any other loan brokerage firm for its placement of mortgage loans, the Borrower will be immediately released from an further obligation under the formation
loan (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 General Partners are removed, no successor general partners 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:	 	  

  
 2 

 ADVANCES AND PAYMENT OF PRINCIPAL* 

 

									
	 Date

By
	 	 Amount of

Advance
	 	 Amount of Principal

Paid or Prepaid
	 	 Unpaid Principal

Amount
	 	 Notation Made

	                    	 	                    	 	                    	 	                    	 	                    
	                    	 	                    	 	                    	 	                    	 	                    
	                    	 	                    	 	                    	 	                    	 	                    
	                    	 	                    	 	                    	 	                    	 	                    
	                    	 	                    	 	                    	 	                    	 	                    
	                    	 	                    	 	                    	 	                    	 	                    
	                    	 	                    	 	                    	 	                    	 	                    
	                    	 	                    	 	                    	 	                    	 	                    
	                    	 	                    	 	                    	 	                    	 	                    
	                    	 	                    	 	                    	 	                    	 	                    
	                    	 	                    	 	                    	 	                    	 	                    
	                    	 	                    	 	                    	 	                    	 	                    
	                    	 	                    	 	                    	 	                    	 	                    
	                    	 	                    	 	                    	 	                    	 	                    
	                    	 	                    	 	                    	 	                    	 	                    

  

	*	Continue on separate sheet if necessary 

  
 3EX-10.1

 Exhibit 10.1 

EXECUTION VERSION 
 THIRD
AMENDMENT 
 TO 

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT 

THIS THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Third Amendment” or this
“Amendment”) is entered into as of April 7, 2016, by and among HERCULES FUNDING II LLC, a Delaware limited liability company (“Borrower”), the lenders identified on the signature page hereof (such lenders,
together with their respective successors and assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), and WELLS FARGO CAPITAL FINANCE, LLC, formerly known as Wells
Fargo Foothill, LLC, a Delaware limited liability company, as the arranger and administrative agent for the Lenders (in such capacity, “Agent”), with reference to the following facts, which shall be construed as part of this Third
Amendment: 
 RECITALS 

A. Borrower, Lenders and Agent have entered into that certain Amended and Restated Loan and Security Agreement dated as of June 29, 2015, as
amended by that certain First Amendment to Amended and Restated Loan and Security Agreement dated as of December 16, 2015 and that certain Second Amendment to Amended and Restated Loan and Security Agreement dated as of March 8, 2016 (as
amended, supplemented, replaced, renewed or otherwise modified from time to time, the “Loan Agreement”), pursuant to which Lenders and Agent are providing financial accommodations to or for the benefit of Borrower upon the terms and
conditions contained therein. Unless otherwise defined herein, capitalized terms or matters of construction defined or established in the Loan Agreement shall be applied herein as defined or established therein. 

B. Borrower, Lenders and Agent have agreed to enter into this Third Amendment in order to add Everbank Commercial Finance, Inc., as a Lender,
to increase the amount of the aggregate Commitments and Maximum Revolver Amount under the Loan Agreement, and to amend certain other provisions of the Loan Agreement. 

C. Immediately prior to the effectiveness of this Third Amendment, Wells Fargo Capital Finance, LLC and AloStar Bank of Commerce are all of
the Lenders under the Loan Agreement. 
 AGREEMENT 

NOW, THEREFORE, in consideration of the continued performance by Borrower of its promises and obligations under the Loan Agreement and the
other Loan Documents, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, Lenders and Agent hereby agree as follows: 

1. Ratification of Existing Loan Documents. Each of the parties acknowledges, confirms, and ratifies the provisions of the Loan
Agreement and the other Loan Documents, which shall be unmodified and shall continue to be in full force and effect in accordance with their terms except as expressly provided under this Third Amendment. 

  
 - 1 - 

 EXECUTION VERSION 

 

 2. Amendments to the Loan Agreement. The Loan Agreement is hereby amended as
follows: 
 2.1 Addition of New Definitions. Section 1.1 of the Loan Agreement is amended by adding in
appropriate alphabetical order the following new definitions: 
 “Third Amendment” means the Third Amendment
to Amended and Restated Loan and Security Agreement, dated as of April 7, 2016, by and among Lenders, Agent and Borrower. 

“Third Amendment Closing Date” means April 7, 2016. 

2.2 Amendment to Definition of Eligible Notes Receivable. Section 1.1 of the Loan Agreement is amended by
deleting the following existing text at the beginning of the definition of the term “Eligible Notes Receivable”: 

“Eligible Notes Receivable” means those Notes Receivable that comply with each of the representations and
warranties respecting Eligible Notes Receivable made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be
modified from time to time by Agent in Agent’s Permitted Discretion; provided further, that so long as no Default or Event of Default has occurred and is continuing, Agent shall first notify and attempt to discuss with Borrower
any such modification that Agent proposes to make to such criteria unless Agent, in its Permitted Discretion, believes that exigent circumstances justify the immediate modification of such criteria. Eligible Notes Receivable shall not
include a Note Receivable (unless specifically determined to be an Eligible Note Receivable by Agent following a review thereof on a case-by-case basis) if: 

and replacing it with the following amended and restated version thereof: 

“Eligible Notes Receivable” means those Notes Receivable that comply with each of the representations and
warranties respecting Eligible Notes Receivable made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be
modified from time to time by Required Lenders in their Permitted Discretion; provided further, that so long as no Default or Event of Default has occurred and is continuing, Required Lenders shall first notify and attempt to discuss
with Borrower any such modification that Required Lenders propose to 

  
 - 2 - 

 EXECUTION VERSION 

 

 
make to such criteria unless Required Lenders, in their Permitted Discretion, believe that exigent circumstances justify the immediate modification of such criteria. Eligible Notes
Receivable shall not include a Note Receivable (unless specifically determined to be an Eligible Note Receivable by Required Lenders following a review thereof on a case-by-case basis) if: 

2.3 Amendment to Note Receivable Balance Limitation in Definition of Eligible Notes Receivable. Section 1.1
of the Loan Agreement is amended by deleting the existing text of clause (aa) in the definition of “Eligible Notes Receivable” and replacing it with the following amended and restated version thereof: 

(aa) such Note Receivable Balance has an outstanding principal amount that exceeds $15,000,000; provided, that such
dollar limitation may be raised or waived by Required Lenders on a case by case basis in their sole discretion, and only the amount in excess of such $15,000,000 or any higher limit agreed to by Required Lenders shall be deemed ineligible solely by
reason of this clause (aa). 
 2.4 Amendment to Concentration Limits in Definition of Eligible
Notes Receivable. Section 1.1 of the Loan Agreement is amended by deleting the existing text of Concentration Limit (6) in the definition of “Eligible Notes Receivable” and replacing it with the following amended and
restated version thereof: 
 (6) The portion of the Preliminary Eligible Notes Receivable Balance consisting of the aggregate
outstanding principal amount of all Eligible Notes Receivable that have a remaining term of more than forty-two (42) months, that exceeds twenty-five (25%) of the Preliminary Eligible Notes Receivable Balance at such time; provided, that such
concentration limit may be waived by Required Lenders on a case by case basis in their sole discretion; 
 2.5 Amendment
to Definition of Required Lenders. Section 1.1 of the Loan Agreement is amended by deleting the existing definition of the term “Required Lenders” and replacing it with the following amended and restated version thereof:

 “Required Lenders” means, at any time, the Lenders whose aggregate Pro Rata Shares constitute more than
fifty percent (50%) of the Commitments, or if the Commitments have been terminated irrevocably, more than fifty percent (50%) of the Obligations then outstanding; provided, however, that at any time when there are two or more Lenders,
“Required Lenders” shall mean two or more Lenders whose aggregate Pro Rata Shares constitute more than fifty percent (50%) of the Commitments, or if the Commitments have been terminated irrevocably, more than fifty percent (50%) of the
Obligations then outstanding; provided further, that the Pro Rata Share or existence of any Defaulting Lender shall be disregarded in any determination of what constitutes Required Lenders. 

  
 - 3 - 

 EXECUTION VERSION 

 

 2.6 Revised Version of Schedule C-1 to Reflect Additional Commitment of
New Lender. Schedule C-1 of the Loan Agreement is amended by deleting the existing version thereof and replacing it with the amended and restated version attached as Exhibit A to this Third Amendment.

 3. Conditions Precedent. Notwithstanding any other provision of this Third Amendment, this Third Amendment shall be of no
force or effect, and Lenders and Agent shall not have any obligations hereunder, unless and until each of the following conditions have been satisfied: 

3.1 Receipt of Executed Third Amendment. Agent shall have received this Third Amendment, duly executed by Borrower,
each Lender, and Agent; 
 3.2 Agent’s Receipt of Fees Due Under the Fee Letter in Connection with Third
Amendment. Agent shall have received from Borrower the additional fees that are due and payable to Agent under the Fee Letter based upon the closing of this Third Amendment, which fees shall be fully-earned on the Third Amendment Closing
Date; 
 3.3 Agent’s Receipt of Closing Fee Due to New Lender in Connection with Third Amendment. Agent
shall have received from Borrower for the account of Everbank Commercial Finance, Inc. the $62,500 closing fee that is due and payable to Everbank Commercial Finance, Inc. upon the closing of this Third Amendment, which fee shall be fully-earned by
Everbank Commercial Finance, Inc. on the Third Amendment Closing Date and shall be forwarded by Agent to Everbank Commercial Finance, Inc. no later than one (1) Business Day after Agent’s receipt of the payment due from Everbank Commercial
Finance, Inc. in connection with the initial Settlement reflecting the Commitment of Everbank Commercial Finance, Inc.; and 

3.4 No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing. 

4. Representations and Warranties Regarding Loan Agreement. Borrower hereby represents and warrants that the representations and
warranties contained in the Loan Agreement were true and correct in all material respects when made and are true and correct in all material respects as of the Third Amendment Closing Date, except to the extent that (a) a particular
representation or warranty by its terms expressly applies only to an earlier date, in which case such representation or warranty was true and correct as of such earlier date, or (b) Borrower has previously advised Agent in writing as
contemplated under the Loan Agreement. Borrower hereby further represents and warrants that no event has occurred and is continuing, or would result from the transactions contemplated under this Third Amendment, that constitutes or would constitute
a Default or an Event of Default. 

  
 - 4 - 

 EXECUTION VERSION 

 

 5. Miscellaneous. 

5.1 Headings. The various headings of this Third Amendment are inserted for convenience of reference only and shall
not affect the meaning or interpretation of this Third Amendment or any provisions hereof. 
 5.2
Counterparts. This Third Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. Delivery
of an executed counterpart of a signature page to this Third Amendment by either (i) facsimile transmission or (ii) electronic transmission in either Tagged Image Format Files (TIFF) or Portable Document Format (PDF), shall be effective as delivery
of a manually executed counterpart thereof. 
 5.3 Interpretation. No provision of this Third Amendment shall be
construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party’s having or being deemed to have structured, drafted or dictated such provision. 

5.4 Complete Agreement. This Third Amendment constitutes the complete agreement between the parties with respect to
the subject matter hereof, and supersedes any prior written or oral agreements, writings, communications or understandings of the parties with respect thereto. 

5.5 GOVERNING LAW. THIS THIRD AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 
 5.6 Effect. Upon the effectiveness of this Third Amendment,
each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof” or words of like import shall mean and be a reference to the Loan Agreement as amended hereby and each reference in the other Loan
Documents to the Loan Agreement, “thereunder,” “thereof,” or words of like import shall mean and be a reference to the Loan Agreement as amended hereby. 

5.7 Conflict of Terms. In the event of any inconsistency between the provisions of this Third Amendment and any
provision of the Loan Agreement, the terms and provisions of this Third Amendment shall govern and control. 
 5.8 No
Novation or Waiver. Except as specifically set forth in this Third Amendment, the execution, delivery and effectiveness of this Third Amendment shall not (a) limit, impair, constitute a waiver by, or otherwise affect any right, power
or remedy of, Agent or Lenders under the Loan Agreement or any other Loan Document, (b) constitute a waiver of any provision in the Loan Agreement or in any of the other Loan Documents or of any Default or Event of Default that may have
occurred and be continuing, or (c) alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Loan Agreement or in any of the other Loan Documents, all of which are ratified and
affirmed in all respects and shall continue in full force and effect. 
 [SIGNATURE PAGE FOLLOWS] 

  
 - 5 - 

 EXECUTION VERSION 

 

 IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment to Amended and
Restated Loan and Security Agreement as of the day and year first above written. 
  

			
	HERCULES FUNDING II LLC,
	a Delaware limited liability company, as Borrower
		
	 By:
	 	 /s/ Mark R. Harris

	Name: Mark R. Harris
	Title: Chief Financial Officer
	
	WELLS FARGO CAPITAL FINANCE, LLC,
	 formerly known as Wells Fargo Foothill, LLC,

a Delaware limited liability company,
 as Agent and a
Lender

		
	By:	 	 /s/ Jeffrey Carberg

	Name: Jeffrey Carberg
	Title: Executive Vice President
	
	ALOSTAR BANK OF COMMERCE,
	as a Lender
		
	By:	 	 /s/ John Thomas

	Name: John Thomas
	Title: Vice President
	
	EVERBANK COMMERCIAL FINANCE, INC.,
	as a Lender
		
	By:  	 	 /s/ Ed McGugan

	Name: Ed McGugan
	Title: Managing Director

  
 - 6 - 

 EXECUTION VERSION 

 

 Exhibit A 

to 
 Third Amendment to
Amended and Restated Loan and Security Agreement 
 Schedule C-1 

 
 Commitments 

(as of Third Amendment Closing Date) 
  

					
	 Lender
	  	Commitment	 
	 Wells Fargo Capital Finance, LLC
	  	$	75,000,000	  
	 AloStar Bank of Commerce
	  	$	20,000,000	  
	 Everbank Commercial Finance, Inc.,
	  	$	25,000,000	  
		  	  
	  
	 
	 Total for All Lenders
	  	$	120,000,000	  
		  	  
	  
	 

  
 - 7 -

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