Formation Loan definition

Formation Loan. The term "Formation Loan" means a loan to Redwood Mortgage, an affiliate of the General Partners, equal to the amount of the sales commissions. Redwood Mortgage will pay all sales commissions from the Formation Loan. The Formation Loan will be unsecured, will not bear interest and will be repaid in annual installments.
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Formation Loan means a loan to Redwood Mortgage Corp. in connection with the Offering, equal to the amount of the Sales Commissions and all amounts payable in connection with any unsolicited sales. Redwood Mortgage Corp. will pay all Sales Commissions and all amounts payable in connection with any unsolicited sales from the Formation Loan. The Formation Loan will be unsecured, will not bear interest and will be repaid in annual installments. During the Offering period, Redwood Mortgage Corp. will make annual installments of one-tenth of the principal balance of the Formation Loan as of December 31 of the prior year; such payment will be due and payable by December 31 of the following year. Prior to the termination of the Offering, the principal balance of the Formation Loan will increase as additional sales of Units are made each year. Upon completion of the Offering, the balance of the Formation Loan will be repaid in ten (10) equal annual installments of principal, without interest, commencing on December 31 of the year following the year the Offering terminates.
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Examples of Formation Loan in a sentence

  • Prospective investors whose subscriptions are accepted will be admitted into the Partnership only when their subscription funds are required by the Partnership to fund a Mortgage Investment, or the Formation Loan, to create appropriate reserves or to pay organizational expenses or other proper Partnership purposes.

  • The Formation Loan will be unsecured, will not bear interest and will be repaid in annual installments.

  • Redwood Mortgage at its option may prepay all or any part of the Formation Loan.

  • This portion shall be determined by the ratio between the initial amount of the Formation Loan and the total amount of the organizational and syndication costs incurred by the Partnership in this offering of Units.

  • The amount of the annual installment payment to be made by Redwood Mortgage during the offering stage, will be determined by the principal balance of the Second Formation Loan on December 31 of each year.

  • In the event that all of the General Partners are removed, no other General Partners are elected, the Partnership is liquidated and Redwood Mortgage is no longer receiving payments for services rendered, the debt on the Formation Loan shall be forgiven by the Partnership and Redwood Mortgage will be immediately released from any further obligation under the Formation Loan.

  • The First Formation Loan will be repaid in ten (10) equal annual installments of principal without interest, commencing on December 31 of the year in which the offering terminates.

  • The principal balance of the Second Formation Loan will increase as additional sales of Units are made each year.

  • Subscribers shall be admitted as Limited Partners when their subscription funds are required by the Partnership to fund a Mortgage Investment, or the Formation Loan, to create appropriate reserves or to pay organizational expenses, as described in the Prospectus.

  • The Second Formation Loan will be repaid as follows: Upon the commencement of this offering, Redwood Mortgage shall make annual installments of one-tenth of the principal balance of the Formation loan as of December 31 of each year.