Company: RWT-PA
Filing Date: 2025-08-25
Form Type: 8-K
Source: 0001104659-25-082532
Chunk: 1

Company: REDWOOD TRUST INC
Filing Date: 2025-08-25
Form: 8-K
Item: Item 2.03
Chunk 1
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Before March 15, 2027,
holders will have the right to convert their Notes only upon the occurrence of certain events. From and after March 15, 2027, holders
may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately before
the maturity date. The Company will have the right to elect to settle conversions either entirely in cash or in a combination of cash
and shares of its common stock, $0.01 par value per share (the “ Common Stock”). However, upon conversion of any Notes, the
conversion value, which will be determined over an “ Observation Period” (as defined in the Indenture) consisting of 25 trading
days, will be paid in cash up to at least the principal amount of the Notes being converted. The conversion rate of the Notes is 95.6823
shares of Common Stock per $1,000 principal amount of Notes, which is equivalent to a conversion price of approximately $10.45 per share.
The conversion price represents a premium of approximately 78.0% over the closing price of the Company’s Common Stock on August 21.
2025. The conversion rate is subject to adjustment in certain circumstances.

Upon the occurrence of a fundamental
change (as defined in the Indenture) involving the Company, holders of the Notes may require the Company to repurchase all or a portion
of their Notes for cash at a price equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest
to, but excluding, the fundamental change repurchase date.

The Company will have the
right to redeem the Notes, in whole or in part, at its option at any time, and from time to time, prior to maturity, to the extent, and
only to the extent, necessary to preserve its status as a real estate investment trust (“ REIT”) for U. S. federal income tax
purposes. In addition, subject to the partial redemption limitation described below, the Company will have the right to redeem the Notes,
in whole or in part, at its option on or after June 16, 2025, but only if the last reported sale price per share of the Company’s
Common Stock exceeds 130% of the conversion price for a specified period of time. A redemption pursuant to the provision described in
the preceding sentence is referred to as a “ Provisional Redemption.” Pursuant to the partial redemption limitation, the Company