TRUST AGREEMENT
This
TRUST AGREEMENT, dated as of July 29, 2010, by and between Redwood Trust Inc., a
Maryland corporation (the “Sponsor”), and Xxxxx Fargo Delaware Trust Company,
N.A., a national banking association, as Delaware trustee (the “Delaware
Trustee”).
The
Sponsor and the Delaware Trustee hereby agree as follows:
1. The
trust created hereby (the "Trust") shall be known as Redwood Capital Trust II,
in which name the Sponsor or the Delaware Trustee, to the extent provided
herein, may engage in the transactions contemplated hereby, make and execute
contracts, and xxx and be sued.
2. The
Sponsor hereby assigns, transfers, conveys and sets over to the Delaware Trustee
the sum of One Dollar ($1.00). The Delaware Trustee hereby
acknowledges receipt of such amount in trust from the Sponsor, which amount
shall constitute the initial trust estate. The Delaware Trustee
hereby declares that they will hold the trust estate in trust for the
Sponsor. It is the intention of the parties hereto that the Trust
created hereby constitutes a statutory trust under Chapter 38 of Title 12 of the
Delaware Code, 12 Del.
C. § 3801, et seq. (the "Statutory
Trust Act"), and that this document constitutes the governing instrument of the
Trust. The Delaware Trustee is hereby authorized and directed to
execute and file a certificate of trust with the Delaware Secretary of State in
accordance with the provisions of the Statutory Trust Act.
3. The
Sponsor and the Delaware Trustee will enter into an Amended and Restated Trust
Agreement (herein the "Amended and Restated Trust Agreement"), satisfactory to
each such party, to provide for the contemplated operation of the Trust created
hereby and the issuance of capital securities of the Trust (the "Capital
Securities") and common securities of the Trust (the "Common
Securities"). Prior to the execution and delivery of such Amended and
Restated Trust Agreement, the Delaware Trustee shall not have any duty or
obligation hereunder or with respect to the trust estate, except as otherwise
required by this Trust Agreement, applicable law or as the Sponsor directs in
order to obtain, prior to such execution and delivery, any licenses, consents or
approvals required by applicable law or otherwise including, but not limited to,
the filing of the certificate of trust in accordance with Section 2
hereof. Notwithstanding the foregoing, the Delaware Trustee may take
all actions deemed proper and necessary to effect the transactions contemplated
herein.
4. The
Sponsor is hereby authorized (i) to file with the Securities and Exchange
Commission (the "Commission") and execute, in each case on behalf of the Trust,
(a) the Registration Statement on Form S-3 (the "1933 Act Registration
Statement") (including any post-effective amendments to the 1933 Act
Registration Statement) relating to the registration under the Securities Act of
1933, as amended (the "1933 Act"), of the Capital Securities of the Trust and
certain other securities of the Sponsor; (b) any preliminary prospectus or
prospectus or supplement thereto relating to the Capital Securities required to
be filed pursuant to Rule 424 under the 1933 Act; and (c) to the extent deemed
advisable by the Sponsor, a Registration Statement on Form 8-A (the "1934 Act
Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Capital Securities of
the Trust under the Exchange Act of 1934, as amended; (ii) to the extent deemed
advisable by the Sponsor, to file with one or more national securities exchanges
(each, an "Exchange") or the Financial Industry Regulatory Authority ("FINRA")
and execute on behalf of the Trust a listing application or applications and all
other applications, statements, certificates, agreements and other instruments
as shall be necessary or desirable to cause the Capital Securities to be listed
on any such Exchange or the Nasdaq National Market ("NASDAQ"); (iii) to file and
execute on behalf of the Trust such applications, reports, surety bonds,
irrevocable consents, appointments of attorney for service of process and other
papers and documents as shall be necessary or desirable to register the Capital
Securities under the securities or blue sky laws of such jurisdictions as the
Sponsor, on behalf of the Trust, may deem necessary or desirable; and (iv) to
execute on behalf of the Trust any agreements relating to the issuance of the
Capital Securities. In the event that any filing referred to in
clauses (i), (ii) and (iii) above is required by the rules and regulations of
the Commission, any Exchange, FINRA or state securities or blue sky laws to be
executed on behalf of the Trust by one or more trustees, the Sponsor shall
appoint an administrative trustee (the “Administrative Trustee”), and in its or
his capacity as a trustee of the Trust, any such Administrative Trustee is
hereby authorized and, to the extent so required, directed to join in any such
filing and to execute on behalf of the Trust any and all of the foregoing, it
being understood that the Delaware Trustee, in its capacity as a trustee of the
Trust, shall not be required to join in any such filing or execute on behalf of
the Trust any such document. In connection with the filings referred
to above, the Sponsor and the Trust hereby constitute and appoint any such
Administrative Trustee as its and their true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for the Sponsor or
Trust or in the Sponsor's or the Trust's name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to the 1933 Act Registration Statement and the 1934 Act Registration Statement
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Commission, any Exchange, FINRA and
administrators of the State securities or blue sky laws, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as the Sponsor or the Trust might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their respective substitute or substitutes, shall
do or cause to be done by virtue hereof.
5. The
number of trustees initially shall be one (1) and thereafter the number of
trustees shall be such number as shall be fixed from time to time by a written
instrument signed by the Sponsor, which may increase or decrease the number of
trustees; provided, however, that to the extent required by the Statutory Trust
Act, one of the trustees of the Trust shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and otherwise meets
the requirements of applicable Delaware law. Subject to the foregoing, the
Sponsor is entitled to appoint or remove without cause any trustee at any
time. The Delaware Trustee may resign upon thirty (30) days' prior
notice to the Sponsor.
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6. (a) The
Delaware Trustee and its officers, directors, agents and servants (collectively,
the "Fiduciary Indemnified Persons") shall not be liable, responsible or
accountable in damages or otherwise to the Trust, the Sponsor or any holder of
the Capital Securities (the Trust, the Sponsor and any holder of the Capital
Securities being a "Covered Person") for any loss, damage or claim incurred by
reason of any act or omission performed or omitted by the Fiduciary Indemnified
Persons in good faith on behalf of the Trust and in a manner the Fiduciary
Indemnified Persons reasonably believed to be within the scope of authority
conferred on the Fiduciary Indemnified Persons by this Trust Agreement or by
law, except that the Fiduciary Indemnified Persons shall be liable for any such
loss, damage or claim incurred by reason of the Fiduciary Indemnified Person's
gross negligence or willful misconduct with respect to such acts or
omissions.
(b) The
Fiduciary Indemnified Persons shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any person as to matters the Fiduciary
Indemnified Persons reasonably believes are within such other person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which distributions to holders of Capital Securities might properly be
paid.
(c) The
Sponsor agrees, to the fullest extent permitted by applicable law, (i) to
indemnify and hold harmless each Fiduciary Indemnified Person from and against
any loss, damage, liability, tax, penalty, expense or claim of any kind or
nature whatsoever incurred by or asserted against the Fiduciary Indemnified
Persons by reason of the creation, operation or termination of the Trust or the
transactions contemplated by this Trust Agreement in a manner the Fiduciary
Indemnified Persons reasonably believe to be within the authority conferred on
the Fiduciary Indemnified Persons by this Trust Agreement or by law, except that
no Fiduciary Indemnified Person shall be entitled to be indemnified in respect
of any loss, damage or claim incurred by the Fiduciary Indemnified Persons by
reason of gross negligence or willful misconduct with respect to such acts or
omissions, (ii) to advance expenses (including legal fees) incurred by a
Fiduciary Indemnified Person in defending any claim, demand, action, suit or
proceeding, from time to time, prior to the final disposition of such claim,
demand, action, suit or proceeding, upon receipt by the Trust of an undertaking
by or on behalf of such Fiduciary Indemnified Persons to repay such amount if it
shall be determined that such Fiduciary Indemnified Person is not entitled to be
indemnified as authorized in the preceding subsection, and (iii) to reimburse
the Delaware Trustee for all other reasonable expenses (including reasonable
fees and expenses of counsel and other experts) incurred in connection with this
Trust Agreement and the Trust.
(d) The
provisions of this Section 6 shall survive the termination of this Trust
Agreement or the earlier resignation or removal of the Fiduciary Indemnified
Persons.
7. This
Trust Agreement shall be governed by, and construed in accordance with, the laws
of the State of Delaware (without regard to conflict of laws
principles).
8. This
Trust Agreement may be executed in one or more counterparts.
9. The
Trust may dissolve, wind-up and terminate at the election of the
Sponsor.
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[SIGNATURE
PAGE FOLLOWS]
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IN WITNESS WHEREOF, the
parties hereto have caused this Trust Agreement to be duly executed as of the
day and year first above written.
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REDWOOD
TRUST INC., as Sponsor
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By:
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/s/
Xxxxxx X. Xxxxx
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Name:
Xxxxxx
X. Xxxxx
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Title: General
Counsel & Secretary
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XXXXX
FARGO DELAWARE TRUST
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COMPANY,
N.A., as Delaware Trustee
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By:
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/s/ Xxxxx
X. XxXxxx
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Name:
Xxxxx
X. XxXxxx
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Title: Vice
President
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