Company: RWT-PA
Filing Date: 2025-03-03
Form Type: S-3ASR
Source: 0001104659-25-019828
Chunk: 56

Company: REDWOOD TRUST INC
Filing Date: 2025-03-03
Form: S-3ASR
Chunk 56
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ging transaction was extinguished or disposed
of. To the extent that we do not properly identify such transactions as hedges or we hedge with other types of financial instruments,
the income from those transactions is not likely to be treated as qualifying income for purposes of the gross income tests. We intend
to structure any hedging transactions in a manner that does not jeopardize our status as a REIT.

Rents from Real Property

To the extent that
we own real property or interests therein, rents we receive from a tenant will qualify as “rents from real property” for
the purpose of satisfying the gross income tests described above only if all of the following conditions are met:

| · | The                                                                                              
 amount of rent is not based in whole or in part on the income or profits of any person. However, 
 an amount we receive or accrue generally will not be excluded from the term “rents               
 from real property” solely because it is based on a fixed percentage or percentages              
 of receipts or sales or if it is based on the net income of a tenant which derives substantially 
 all of its income with respect to such property from subleasing of substantially all of such     
 property, to the extent that the rents paid by the subtenants would qualify as rents from        
 real property if we earned such amounts directly;                                                |

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| · | Neither                                                                                               
 we nor an actual or constructive owner of 10% or more of our capital stock actually or constructively 
 owns 10% or more of the interests in the assets or net profits of a non-corporate tenant,             
 or, if the tenant is a corporation, 10% or more of the total combined voting power of all             
 classes of stock entitled to vote or 10% or more of the total value of all classes of stock           
 of the tenant. Rents we receive from such a tenant that is a TRS of ours, however, will not           
 be excluded from the definition of “rents from real property” as a result of                          
 this condition if at least 90% of the space at the property to which the rents relate is              
 leased to third parties, and the rents paid by the TRS are substantially comparable to rents          
 paid by our other tenants for comparable space;                                                       |

| · | Rent                                                                                        
 attributable to personal property leased in connection with a lease of real property is not 
 greater than 15% of the total rent received under the lease. If this condition is not met