Company: RWT-PA
Filing Date: 2025-03-03
Form Type: S-3ASR
Source: 0001104659-25-019828
Chunk: 32

Company: REDWOOD TRUST INC
Filing Date: 2025-03-03
Form: S-3ASR
Chunk 32
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 the preceding sentence will be exchangeable for securities in definitive certificated form registered
in the names that the depositary directs. It is expected that these directions will be based upon directions received by the depositary
from its participants with respect to ownership of beneficial interests in the global securities.

We have obtained the information
in this section and elsewhere in this prospectus concerning DTC and DTC’s book-entry system from sources that are believed
to be reliable, but we take no responsibility for the accuracy of this information.

<div align='center'>22

RESTRICTIONS
ON OWNERSHIP AND TRANSFER AND REPURCHASE OF SHARES</div>

In order that we may meet
the requirements for qualification as a REIT for U.S. federal income tax purposes at all times, our charter prohibits any person from
acquiring or holding beneficial ownership of shares of our common stock or preferred stock, or collectively, capital stock, in excess
of 9.8%, in number of shares or value, of the outstanding shares of the related class of capital stock. For this purpose, the term “beneficial
ownership” means beneficial ownership of capital stock by a person, either directly or constructively, including through application
of the constructive ownership provisions of Section 544 of the Code and related provisions.

Under the constructive ownership
rules of Section 544 of the Code, a holder of a warrant generally will be treated as owning the number of shares of capital stock
into which such warrant may be converted. In addition, the constructive ownership rules generally attribute ownership of securities owned
by a corporation, partnership, estate, or trust proportionately to its stockholders, partners, or beneficiaries, respectively. The rules
may also attribute ownership of securities owned by family members to other members of the same family and may treat an option to purchase
securities as actual ownership of the underlying securities by the optionholder. The rules further provide when securities constructively
owned by a person will be considered to be actually owned for the further application of such attribution provisions. To determine whether
a person holds or would hold capital stock in excess of the 9.8% ownership limit, a person will be treated as owning not only shares
of capital stock actually owned, but also any shares of capital stock attributed to that person under the attribution rules described
above. Accordingly, a person who directly owns less than 9.8% of the shares outstanding may nevertheless be in violation of the 9.8%
ownership limit.

Any acquisition or transfer