Exhibit 10.10

GUARANTY

THIS GUARANTY, dated July 16, 2014, is given by Redwood Trust, Inc., a Maryland
corporation (the “Guarantor”), in favor of the Federal Home Loan Bank of Chicago
(“FHLB Chicago”), an instrumentality of the United States of America, located at
200 E. Randolph Drive, Chicago, Illinois 60601.

1.    Unconditional Guaranty.  In consideration of and to induce FHLB Chicago to
make advances and other extensions of credit to RWT Financial, LLC (“Member”)
pursuant to that certain Advances, Collateral Pledge, and Security Agreement of
even date herewith (the “ACPS Agreement”), which is and will be to the direct
interest and advantage of the Guarantor, the Guarantor unconditionally
guarantees to FHLB Chicago, and its successors and assigns, the prompt payment
when due of all of the Member’s present and future obligations and liabilities
of any kind to FHLB Chicago arising out of the ACPS Agreement heretofore, now,
or hereafter made, incurred or created, whether voluntary or involuntary and
however arising, whether direct or acquired by FHLB Chicago by assignment or
succession, whether originally incurred by or assumed by the Member, absolute or
contingent, liquidated or unliquidated, determined or undetermined, and whether
the Member may be liable individually or jointly with others, or whether
recovery upon such Obligations may be or hereafter become barred by any statute
of limitations, or whether such Obligations may be or hereafter become otherwise
unenforceable (any and all such obligations and liabilities, the “Obligations”).

This Guaranty is unconditional and shall not be affected by the genuineness,
validity, regularity or enforceability of the Obligations or any instrument
evidencing any Obligations, or by the existence, validity, enforceability,
perfection, or extent of any collateral therefor, or by any circumstance
relating to the Obligations which might otherwise constitute a defense to this
Guaranty. This Guaranty is absolute and unconditional and shall remain in full
force and effect and be binding upon the Guarantor and its successors and
assigns so long as the ACPS Agreement remains in full force and effect. If at
any time any payment by the Member in respect of any Obligations is rescinded or
must otherwise be returned for any reason whatsoever, in whole or in part, the
Guarantor shall remain liable hereunder in respect of such Obligations as if
such payment had not been made, and this Guaranty shall remain in full force and
effect or shall be reinstated (as the case may be) with respect to such
Obligations.

This is a guaranty of payment and not a guaranty of collection, and the
Guarantor agrees that FHLB Chicago may resort to the Guarantor for payment of
any of the Obligations whether or not FHLB Chicago has proceeded against any
other obligor principally or secondarily liable for any Obligations, including
the Member, or against any collateral for the Obligations, and whether or not
FHLB Chicago has pursued any other remedy available to it. FHLB Chicago shall
not be obligated to file any claim relating to the Obligations, including any
claim in the event that the Member becomes subject to a bankruptcy,
reorganization or similar proceeding, and the failure of to file any such claim
shall not affect the Guarantor’s obligations hereunder. The Guarantor also
specifically waives all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
acceptance, and all other notices whatsoever with respect to this Guaranty and
of the existence, creation, or incurring of new or additional Obligations. This
Guaranty shall not be deemed to supersede or replace any other guaranties given
to FHLB Chicago by the Guarantor; and the Obligations guaranteed hereby shall be
in addition to any other obligations guaranteed by the Guarantor pursuant to any
other agreement or guaranty given to FHLB Chicago and other guaranties of the
Obligations.

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2.  Consents.  The Guarantor agrees that FHLB Chicago may at any time, and from
time to time (a) extend the time of payment of or renew any of the Obligations,
(b) receive and hold security for the payment of any Obligations and enforce,
waive, release, fail to perfect, sell or otherwise dispose of any such security,
(c) release or substitute any other guarantor of any Obligations, or (d) make
any agreement with the Member or with any other party or person liable on any of
the Obligations, for the extension, renewal, payment, compromise, discharge or
release of the Obligations (in whole or in part), or for any modification of the
terms thereof or of any agreement between FHLB Chicago and the Member or any
such other party or person, without in any way impairing or affecting this
Guaranty for any outstanding Obligations. The Guarantor authorizes FHLB Chicago,
without notice or demand and without affecting its liability hereunder, from
time to time, to assign or transfer the Obligations, to waive, forbear, indulge
or take other action or inaction in respect of this Guaranty or the Obligations,
or to exercise or not exercise any right or remedy hereunder or otherwise with
respect to the Obligations.

3.  Rights; Expenses.  No failure by FHLB Chicago to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by FHLB Chicago of any right,
remedy or power hereunder preclude any other or future exercise of any right,
remedy or power. Each and every right, remedy and power hereby granted to FHLB
Chicago or allowed by law or other agreement shall be cumulative and not
exclusive of any other right, remedy or power. The Guarantor agrees to pay on
demand all reasonable out-of-pocket expenses (including the reasonable fees and
expenses of FHLB Chicago’s counsel) in any way relating to the enforcement or
protection of FHLB Chicago’s rights under this Guaranty.

4.  Benefit; Member.  The Guarantor will benefit from FHLB Chicago entering
transactions with the Member pursuant to the ACPS Agreement, and the Guarantor
has determined that the execution and delivery by the Guarantor of this Guaranty
is necessary and convenient to the conduct, promotion and attainment of the
business of the Guarantor and/or the achievement of some pecuniary and/or other
benefit. The Guarantor acknowledges and agrees that it shall have the sole
responsibility for obtaining from the Member such information concerning the
Obligations and the Member’s financial conditions or business operations as the
Guarantor may require, and that FHLB Chicago has no duty at any time to disclose
to the Guarantor any such information. The Guarantor acknowledges and agrees
that it is not necessary for FHLB Chicago to inquire into the powers of the
Member or of the officers, directors, partners or agents acting or purporting to
act on its behalf, the appropriateness of any transaction for the Member, or the
purpose of any transaction, and any Obligations made or created in reliance upon
the professed exercise of such powers shall be guaranteed hereunder.

5.  Subrogation.  The Guarantor shall not exercise any rights which it may have
or acquire by way of subrogation until all of the Obligations are paid in full
to FHLB Chicago. If any amounts are paid to the Guarantor in violation of the
foregoing limitation, then such amounts shall be held in trust for the benefit
of FHLB Chicago and shall forthwith be paid to FHLB Chicago to reduce the amount
of outstanding Obligations, whether matured or unmatured. Subject to the
foregoing, upon payment of all of the Obligations to FHLB Chicago, the Guarantor
shall be subrogated to the rights of FHLB Chicago against the Member, and FHLB
Chicago agrees to take at the Guarantor’s expense such actions as the Guarantor
may reasonably require to implement such subrogation.

6.  Subordination.  The Guarantor agrees: (a) to subordinate the obligations now
or hereafter owed by the Member to the Guarantor (the “Subordinated Debt”) to
any and all Obligations of the Member to FHLB Chicago now or hereafter existing
while this Guaranty is in effect;

 

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provided, that the Guarantor may receive principal and interest payments on the
Subordinated Debt so long as (i) no “Event of Default” exists with respect to
any sums then due and payable by the Member to FHLB Chicago with respect to the
Obligations; (ii) no event or condition which constitutes or which with notice
or the lapse or time would constitute an “Event of Default” with respect to the
Obligations shall be continuing on or as of the payment date; and (iii) such
principal and interest payments on the Subordinated Debt do not cause or would
with notice or the lapse of time cause Member to be in default under the
Advances Agreement; (b) it will either place a legend indicating such
subordination on every note, ledger page or other document evidencing any part
of the Subordinated Debt or deliver such documents to FHLB Chicago; and
(c) except as permitted by this Section 6, it will not request or accept payment
of or any security for any part of the Subordinated Debt, and any proceeds of
the Subordinated Debt paid to the Guarantor, through error or otherwise, shall
immediately be forwarded to the Bank by the Guarantor, properly endorsed to the
order of FHLB Chicago, to apply to the Obligations.

7.   Assignment; Termination.   The Guarantor shall not assign its rights,
interest, duties or obligations hereunder to any other person without FHLB
Chicago’s prior written consent, and any purported transfer without that consent
shall be void. None of the terms or provisions of this Guaranty may be waived,
amended, supplemented or otherwise modified, and no consent with respect to any
departure by the Guarantor from the terms hereof shall be effective, except as
set forth in a written instrument executed by the Guarantor and FHLB Chicago.

8.   Taxes.   All payments by the Guarantor hereunder will be made in full
without set-off or counterclaim and free and clear of and without withholding or
deduction for or on account of any present or future taxes, duties or other
charges, unless the withholding or deduction of such taxes or duties is required
by law. In any such event, however, the Guarantor shall (a) promptly notify FHLB
Chicago in writing of such requirement, (b) pay to the relevant authorities the
full amount required to be deducted or withheld (including the full amount
required to be deducted or withheld from any additional amount paid to FHLB
Chicago pursuant to this paragraph), (c) promptly forward to FHLB Chicago an
official receipt (or a certified copy) evidencing such payment, and (d) pay to
FHLB Chicago such additional amounts as may be necessary in order that the net
amount received by FHLB Chicago after such withholding or deduction shall equal
the full amounts of moneys which would have been received by FHLB Chicago in the
absence of such withholding or deduction. The Guarantor will pay all stamp,
registration, documentation, or other similar taxes payable in connection with
this Guaranty and will keep FHLB Chicago indemnified against failure to pay the
same.

9.   Payments.   The Guarantor hereby guarantees that the Obligations will be
paid to FHLB Chicago without set-off or counterclaim, in lawful currency of the
United States of America.

10.     Representations.   The Guarantor represents and warrants: (i) that it
has the corporate power to execute this Guaranty and any other document executed
or delivered in connection with this Guaranty; (ii) that all the necessary
corporate actions have been taken to permit it to give this Guaranty; (iii) that
the persons executing this guaranty are duly empowered to do so on the behalf of
the Guarantor; (iv) that the execution or performance of this Guaranty is not a
breach or violation of any instrument concerning the Guarantor or any agreement
to which the Guarantor is a party or any law or regulation to which the
Guarantor is subject; (v) that there is not pending or, to its knowledge,
threatened against it or any of its affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect its ability to perform its
obligations under this Guaranty; (vi) that all applicable information that is
furnished in writing by or on behalf of it to FHLB Chicago

 

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pursuant to this Guaranty as of the date of the information, is true, accurate
and complete in all material respects; (vii) that all governmental and other
consents that are required to have been obtained by it with respect to this
Guaranty have been obtained and are in full force and effect and all conditions
of any such consents have been complied with; and (viii) that this Guaranty
constitutes a valid, binding and enforceable agreement against the Guarantor in
accordance with its terms.

11.  Delivery Obligations.   The Guarantor shall deliver to FHLB Chicago such
information as FHLB Chicago may request from time to time, including without
limitation, copies of the quarterly unaudited or annual audited financial
statements (prepared in accordance with generally accepted accounting principles
in the country in which the entity to which they relate is organized) pertaining
to the Guarantor’s financial condition, such quarterly reports to be provided
within forty-five (45) calendar days after the end of each fiscal quarter and
such annual reports to be provided within sixty (60) calendar days after the end
of each fiscal year. Such information shall be true, complete, and accurate in
all material respects. For the avoidance of doubt, quarterly and annual
financial statements required to be delivered hereunder shall be deemed to be
delivered by Guarantor to FHLB Chicago upon, the filing of such financial
statements with the U.S. Securities and Exchange Commission; provided however,
if Guarantor delays its filing beyond the time frames set forth in this
Section 11, it will promptly notify Bank of such delay.

12.  Default.   If any of the following events occur, a default (“Default”)
under this Guaranty shall exist: (a) failure of timely payment or performance of
the Obligations (after giving effect to applicable grace periods); (b) a breach
of any agreement or representation of Guarantor contained or referred to in this
Guaranty; (c) the appointment of a receiver for, assignment for the benefit of
creditors of, or the commencement of any insolvency or bankruptcy proceeding by
or against the Guarantor; and/or (d) FHLB Chicago determines in good faith, in a
commercially reasonable manner, that the prospects for payment or performance of
the Obligations by Guarantor are impaired or a material adverse change has
occurred in the business or prospects of the Guarantor, financial or otherwise.

If a Default occurs, the Obligations shall be due immediately and payable,
without notice, and FHLB Chicago may exercise any rights and remedies as
provided in this Guaranty, or as provided at law or equity. The Guarantor shall
pay interest on the Obligations from such Default at the highest rate of
interest charged on any of the Obligations.

13.  Governing Law; Jurisdiction.   (A) THIS GUARANTY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE STATUTORY AND COMMON LAW OF THE UNITED STATES
AND, TO THE EXTENT FEDERAL LAW INCORPORATES STATE LAW, THE LAWS (EXCLUSIVE OF
THE CHOICE OF LAW PROVISIONS) OF THE STATE OF ILLINOIS. WITH RESPECT TO ANY
SUIT, ACTION OR PROCEEDING CONCERNING THIS GUARANTY, THE GUARANTOR SUBMITS TO
THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS, OR IF SUCH ACTION OR PROCEEDING MAY NOT BE BROUGHT IN
FEDERAL COURT, THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS LOCATED
IN THE CITY OF CHICAGO. THE GUARANTOR SPECIFICALLY AND IRREVOCABLY WAIVES
(I) ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURTS, (II) ANY CLAIM THAT THE SAME
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, AND (III) THE RIGHT TO OBJECT

 

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THAT SUCH COURTS DO NOT HAVE JURISDICTION OVER IT. THE GUARANTOR WAIVES PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY ILLINOIS LAW, INCLUDING, WITHOUT LIMITATION, BY
REGISTERED MAIL DIRECTED TO THE GUARANTOR’S PERSONAL RESIDENCE.

(b)      TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR BY EXECUTION
HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS GUARANTY. THIS PROVISION IS A MATERIAL INDUCEMENT TO
FHLB CHICAGO TO ACCEPT THIS GUARANTY.

14.  Miscellaneous.  (a) This Guaranty contains the entire and exclusive
agreement of the parties hereto with reference to the matters discussed herein.
This Guaranty supersedes all prior drafts and communications with respect
thereto. The headings of paragraphs herein are inserted only for convenience and
shall in no way define, describe or limit the scope or intent of any provision
of this Guaranty. If any term or provision of this Guaranty shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Guaranty.

(b)      Regardless of any other provision of this Guaranty, if for any reason
the effective interest on any of the Obligations should exceed the maximum
lawful interest, the effective interest shall be deemed reduced to and shall be
such maximum lawful interest, and any sums of interest which have been collected
in excess of such maximum lawful interest shall be applied as a credit against
the unpaid principal balance of the Obligations. Monies received from any source
by FHLB Chicago for application toward payment of the Obligations may be applied
to such Obligations in any manner or order deemed appropriate in the sole
discretion of FHLB Chicago.

 

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IN WITNESS WHEREOF, this Guaranty has been duly executed and delivered by the
Guarantor to FHLB Chicago as of the date first above written.

 

REDWOOD TRUST, INC. By: /s/ Christopher J. Abate Name:  Christopher J. Abate
Title:  Chief Financial Officer Date:  July 16, 2014

Address for notices:

Redwood Trust, Inc.

One Belvedere Place, Suite 300

Mill Valley, California 94941

Attention:  Secretary

Email:  notices@redwoodtrust.com

and to:

Redwood Trust, Inc.

One Belvedere Place, Suite 300

Mill Valley, California 94941

Attention:  Treasurer

Email:  notices@redwoodtrust.com

With a copy to:

Kaye Scholer LLP

Three First National Plaza

70 West Madison Street, Suite 4200

Chicago, Illinois 60602

Attention:  Daniel J. Hartnett

Email:   daniel.hartnett@kayescholer.com

 

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