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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
NOVEMBER 19, 1996
(Date of Report)
REDWOOD TRUST, INC.
(Exact Name of Registrant as Specified in Its Charter)
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<S> <C> <C>
Maryland 333-11665 68-0329422
(State of Incorporation or Organization) (Commission File Number) (I.R.S. Employer Identification No.)
591 Redwood Highway,
Suite 3100
Mill Valley, California 94941
(Address of Principal Executive Offices) (Zip Code)
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(415) 389-7373
(Registrant's Telephone Number,
Including Area Code)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. OTHER EVENTS
Redwood Trust, Inc. (the "Company") previously registered,
among other securities, additional common stock of the
Company, par value $0.01 per share (the "Common Stock"),
pursuant to the Universal Shelf Registration Statement on Form
S-3 (Registration No. 333-11665, filed September 10, 1996 and
declared effective by the Securities and Exchange Commission
(the "Commission") on September 19, 1996) (together with all
the exhibits thereto, the "Registration Statement").
The Company has entered into an underwriting agreement dated
as of November 19, 1996 for the sale of 1,250,000 shares of
the above-referenced Common Stock (the "Offering"). In
connection with the Offering, a supplemental prospectus to the
prospectus in the above-referenced Registration Statement (the
"Supplemental Prospectus") is being filed with the Commission
pursuant to Rule 424(b)(5) under the Securities Act of 1933,
as amended (the "Securities Act") and the General Rules and
Regulations promulgated thereunder (the "Rules").
With respect to the Offering, the following exhibits which
relate specifically to the Offering are included with this
Current Report:
Item 7(c). Exhibits
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1.1 Underwriting Agreement.
5.1 Opinion of Tobin & Tobin, a professional
corporation, as to legality (including
consent of such firm).
5.2 Opinion of Piper & Marbury L.L.P., as to
legality (including consent of such firm).
8.1 Opinion of Giancarlo & Gnazzo, A
Professional Corporation, as to certain tax
matters (including consent of such firm).
23.1 Consent of Tobin & Tobin, a professional
corporation (included in Exhibit 5.1).
23.2 Consent of Piper & Marbury L.L.P. (included
in Exhibit 5.2).
23.3 Consent of Giancarlo & Gnazzo, A
Professional Corporation (included in
Exhibit 8.1).
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: November 19, 1996
Redwood Trust, Inc.
By: /s/ Vickie L. Rath
_________________________________
Vickie L. Rath
Vice President, Treasurer and
Controller
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EXHIBIT INDEX
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Exhibit Number Page Number
- -------------- -----------
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1.1 Underwriting Agreement.........................................
5.1 Opinion of Tobin & Tobin, a professional corporation,
as to legality (including consent of such firm)...........
5.2 Opinion of Piper & Marbury L.L.P., as to legality
(including consent of such firm)..........................
8.1 Opinion of Giancarlo & Gnazzo, A Professional Corporation,
as to certain tax matters (including consent of such firm)
23.1 Consent of Tobin & Tobin, a professional corporation
(included in Exhibit 5.1).................................
23.2 Consent of Piper & Marbury L.L.P. (included in
Exhibit 5.2)..............................................
23.3 Consent of Giancarlo & Gnazzo, A Professional Corporation
(included in Exhibit 8.1).................................
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Exhibit 1.1
1,250,000 SHARES
REDWOOD TRUST, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
November 19, 1996
MONTGOMERY SECURITIES
As Representative of the several Underwriters
600 Montgomery Street
San Francisco, CA 94111
Ladies and Gentlemen:
SECTION 1. Introductory. Redwood Trust, Inc., a Maryland
corporation (the "Company"), proposes to issue and sell 1,250,000 shares of its
authorized but unissued Common Stock, $.01 par value (the "Shares or the "Firm
Shares") to the several underwriters named in Schedule A annexed hereto (the
"Underwriters"), for whom you are acting as Representative.
You have advised the Company that the Underwriters propose to
make a public offering of their respective portions of the Shares on the
effective date of the registration statement hereinafter referred to, or as soon
thereafter as in your judgment is advisable.
The Company confirms its agreement with respect to the
purchase of the Shares by the Underwriters as follows:
SECTION 2. Representations and Warranties of the Company. The
Company hereby represents and warrants to the several Underwriters that:
(a) The Company meets the requirements for use of Form S-3 and
a registration statement on Form S-3 (File No. 333-11665) with respect
to the Shares, including a prospectus (the "Base Prospectus"), has been
carefully prepared by the Company in conformity with the requirements
of the Securities Act of 1933, as amended (the "Act"), and the rules
and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and filed with the
Commission and has become effective. Such registration statement may
have been amended prior to the date of this Agreement; any such
amendment was so prepared and filed, and any such amendment filed after
the effective date of such registration statement has become effective.
No stop order suspending the effectiveness of the registration
statement has been issued, and no proceeding for that purpose has been
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instituted or, to the Company's knowledge, threatened by the
Commission. A final prospectus containing information permitted to be
omitted at the time of effectiveness by Rule 430A of the Rules and
Regulations has been or will be so prepared and filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations on or
before the second business day after the date hereof (or such earlier
time as may be required by the Rules and Regulations); and the Rules
and Regulations do not require the Company to, and, without your
consent, the Company will not, file a post-effective amendment after
the time of execution of this Agreement and prior to the filing of such
final form of prospectus. Copies of such registration statement and any
such amendments have been delivered to the Underwriters and your
counsel. The term "Registration Statement" means such registration
statement as amended at the time it becomes or became effective (the
"Effective Date"), including financial statements and all exhibits and
any information deemed by virtue of Rule 430A of the Rules and
Regulations to be included in such Registration Statement at the
Effective Date and any prospectus supplement filed thereafter with the
Commission and shall include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
term "Prospectus" means, collectively, the Base Prospectus together
with any prospectus supplement, in the respective forms they are filed
with the Commission pursuant to Rule 424(b) of the Rules and
Regulations. Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, the Base
Prospectus or the Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act after the Effective
Date, or the date of the Prospectus, as the case may be, that is
incorporated therein by reference.
(b) The Commission has not issued any order preventing or
suspending the use of the Prospectus, and the Prospectus conforms in
all material respects to the requirements of the Act and the Rules and
Regulations and, as of its date and as of each Closing Date (as
hereinafter defined), has not included (or will not include) any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; the
Prospectus, and any amendments or supplements thereto, will contain all
material statements and information required to be included therein by
the Act and the Rules and Regulations and will in all material respects
conform to the requirements of the Act and the Rules and Regulations,
and neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, will include any untrue statement of a
material fact or omit to state a material
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fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, no representation or
warranty contained in this Section 2(b) shall be applicable to
information contained in or omitted from the Registration Statement,
the Prospectus or any such amendment or supplement in reliance upon and
in conformity with written information furnished pursuant to Section 3
hereof to the Company by or on behalf of any Underwriter, directly or
through the Representative, specifically for use in the preparation
thereof.
(c) The Company has been duly formed and is validly existing
as a corporation, is in good standing under the laws of the State of
Maryland, with full corporate power and authority to own and lease its
properties and conduct its business as currently conducted or as
described in the Prospectus. The Company does not own or control,
directly or indirectly, any corporation, association or other entity.
(d) Except as set forth in the Prospectus, the Company is in
possession of and operating in compliance with all authorizations,
licenses, permits, consents, certificates and orders material to the
conduct of its business, all of which are valid and in full force and
effect; the Company is duly qualified to do business and in good
standing as a foreign corporation or partnership, as applicable, in
each jurisdiction in which the ownership or leasing of properties or
the conduct of its business requires such qualification, except for
jurisdictions in which the failure to so qualify would not,
individually or in the aggregate, prevent or adversely affect the
transactions contemplated by this Agreement or result in a material
adverse change in the condition (financial or otherwise), properties,
business, results of operations or prospects of the Company, (a
"Material Adverse Effect"); and no proceeding has been instituted in
any such jurisdiction, revoking, limiting or curtailing, or seeking to
revoke, limit or curtail, such power and authority or qualification.
(e) The Company has authorized and outstanding Capital Stock
as set forth under the heading "Capitalization" in the Prospectus. The
issued and outstanding shares of Capital Stock have been duly
authorized and validly issued, are fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws,
were not issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase securities, and conform to
the description thereof contained in the Prospectus. Except as
disclosed in or contemplated by the Prospectus, the Company has no
outstanding options to purchase, or preemptive rights or other rights
to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell,
shares of its
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Capital Stock or any such options, rights, convertible securities or
obligations.
(f) The Shares to be sold by the Company in the public
offering contemplated by this Agreement, when issued, delivered and
paid for in the manner set forth in this Agreement, will be duly
authorized, validly issued, fully paid and nonassessable, have been
registered pursuant to Section 12 of the Exchange Act, have been duly
authorized for quotation by the Nasdaq National Market upon official
notice of issuance and will conform to the description thereof
contained in the Prospectus. No preemptive rights or other rights to
subscribe for or purchase Shares exist with respect to the issuance and
sale of the Shares by the Company pursuant to this Agreement. No
shareholder of the Company has any right which has not been waived to
require the Company to register the sale of any shares owned by such
shareholder under the Act in the public offering contemplated by this
Agreement. No further approval or authority of the shareholders or the
Board of Directors of the Company will be required for the issuance and
sale of the Shares to be sold by the Company as contemplated herein.
The description of the Company's share option, share bonus and other
share plans or arrangements, and the options or other rights granted
and exercised thereunder, set forth in the Prospectus accurately and
fairly presents the information required to be shown with respect to
such plans, arrangements, options and rights.
(g) The Company has full legal right, power and authority to
enter into this Agreement and perform the transactions contemplated
hereby. This Agreement has been duly authorized by the Company, has
been duly executed and delivered by the Company and constitutes a valid
and binding obligation of the Company in accordance with its terms. The
making and performance of this Agreement by the Company and the
consummation of the transactions herein contemplated will not violate
any provisions of the charter, bylaws or other organizational documents
of the Company and will not conflict with, result in the breach or
violation of, or constitute, either by itself or upon notice or the
passage of time or both, a default under (i) any agreement, mortgage,
deed of trust, lease, franchise, license, indenture, permit or other
instrument to which the Company or any of its properties may be bound
or affected or (ii) any statute or any authorization, judgment, decree,
order, rule or regulation of any court or any regulatory body,
administrative agency or other governmental body applicable to the
Company or any of its properties. No consent, approval, authorization
or other order of any court, regulatory body, administrative agency or
other governmental body is required, including the satisfaction of any
requirements pursuant to the Hart-Scott-Rodino Antitrust
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Improvements Act of 1976, as amended, for the execution and delivery of
this Agreement or the consummation of the transactions contemplated by
this Agreement, except for compliance with the Act and the Blue Sky and
Canadian securities laws applicable to the public offering of the
Shares by the several Underwriters and the clearance of such offering
with the National Association of Securities Dealers, Inc. (the "NASD").
(h) Coopers & Lybrand L.L.P. ("C&L"), who have expressed their
opinion with respect to the financial statements and schedules filed
with the Commission as a part of the Registration Statement and
included in the Prospectus and in the Registration Statement, are
independent accountants as required by the Act and the Rules and
Regulations.
(i) The financial statements of the Company, and the notes
thereto, set forth in the Registration Statement and Prospectus fairly
present the financial condition of the Company as of the dates
indicated and the results of operations and changes in financial
position for the periods presented. Such statements and notes, and the
related schedules contained in the Registration Statement, have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis as certified by the independent
accountants named in Section 2(h). No other financial statements or
schedules are required to be included in the Registration Statement.
The selected financial data set forth in the Prospectus under the
captions "Capitalization", "Market Prices and Dividend Data" and
"Selected Financial Data" fairly present the information set forth
therein on the basis stated in the Registration Statement.
(j) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to
the Registration Statement by the Act or by the Rules and Regulations
which have not been described or filed as required. Each of the
agreements listed herein, in the Prospectus or as exhibits to the
Registration Statement has been duly authorized, executed and delivered
by the parties thereto (including obtaining all necessary consents) and
constitutes a valid and binding agreement; and neither the Company nor,
to the best of the Company's knowledge, any other party is in breach of
or in default under any such agreement except for any such breach or
default which would not have a Material Adverse Effect.
(k) Except as disclosed in the Prospectus, and except as to
defaults and events of default which individually or in the aggregate
would not have a Material Adverse Effect: (i) the Company is not in
violation of or in default under
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any provision of its charter or bylaws, or other organizational
documents, or in breach or default under any provision of any
agreement, judgment, decree, order, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which it
is a party or by which it or any of its properties are bound; and (ii)
there does not exist any state of facts which constitutes an event of
default on the part of the Company as defined in any of such documents
or which, with notice or lapse of time or both, would constitute such
an event of default.
(l) Except as disclosed in the Prospectus, there are no legal
or governmental actions, suits or proceedings pending or, to the best
of the Company's knowledge, threatened to which the Company is or may
be a party or of which property owned or leased by the Company, is or
may be the subject of, or related to environmental or discrimination
matters, which actions, suits or proceedings might, individually or in
the aggregate, prevent or adversely affect the transactions
contemplated by this Agreement or have a Material Adverse Effect. The
Company is not a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body.
(m) The Company owns no real property. The Company owns and
has good and marketable title to all of the properties and assets
reflected as owned in the financial statements hereinabove described
(or elsewhere in the Prospectus), subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except those disclosed in the
Prospectus and those which will not have a Material Adverse Effect. The
Company holds its leased properties under valid and binding leases,
with such exceptions as are not materially significant in relation to
the business of the Company. Except as disclosed in the Prospectus, the
Company owns or leases all such real and personal property as is
necessary to its operations as now conducted or as proposed to be
conducted.
(n) Since the respective dates as of which information is
given in the Registration Statement and Prospectus and except as
described in or specifically contemplated by the Prospectus: (i) the
Company has not incurred any material liabilities or obligations,
indirect, direct or contingent, or entered into any material verbal or
written agreement or other transaction which is not in the ordinary
course of business or which could result in a material reduction in the
future earnings of the Company; (ii) the Company has not sustained any
material loss or interference with its business or properties from
fire, flood, windstorm, accident or other calamity, whether or not
covered by insurance;
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(iii) the Company has not paid or declared any dividends or other
distributions with respect to its Capital Stock, shares or interests,
as applicable, and the Company is not in default in the payment of
principal or interest on any outstanding material debt obligations;
(iv) there has not been any change in the Shares (other than upon the
sale of the Shares hereunder) or indebtedness material to the Company
(other than in the ordinary course of business); and (v) there has not
been any Material Adverse Effect.
(o) Except as disclosed in the Prospectus, the Company has
sufficient trademarks, trade names, patent rights, copyrights, licenses
or other similar rights and proprietary knowledge (collectively,
"Intangibles"), approvals and governmental authorizations to conduct
its business as now conducted; there is no claim being made against the
Company regarding any Intangible or other infringement which could have
a Material Adverse Effect. The expiration of any trademark, tradename,
patent right, mask work, copyright, license, approval or government
authorization would not have a Material Adverse Effect. The Company has
no knowledge of any material infringement by it of trademarks,
tradename rights, patent rights, mask works, copyrights, licenses,
trade secrets, or other similar rights of others.
(p) The Company is conducting business in compliance with all
applicable laws, rules and regulations of the jurisdictions in which it
is conducting business, including, without limitation, all applicable
local, state and federal environmental laws and regulations, except
where failure to be in compliance would not have a Material Adverse
Effect.
(q) The Company has filed all necessary federal, state and
foreign income and franchise tax returns and has paid all taxes shown
as due thereon; and the Company has no knowledge of any tax deficiency
which has been or might be asserted or threatened which could have a
Material Adverse Effect.
(r) Neither the Company nor its officers, directors, employees
and agents have distributed or will distribute prior to the First
Closing Date any offering material in connection with the offering and
sale of the Shares other than the Prospectus, the Registration
Statement and the other materials permitted by the Act.
(s) The Company maintains insurance of the types and in the
amounts generally deemed adequate for its business, including, but not
limited to, insurance covering real and personal property owned or
leased by the Company against theft, damage, destruction, acts of
vandalism and all other risk customarily insured against, and business
interruption
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insurance, all of which insurance is in full force and
effect.
(t) Neither the Company, any of its officers nor to the
knowledge of the Company, any of its directors has at any time during
the last five years (i) made any unlawful contribution to any candidate
for foreign office or failed to disclose fully any contribution in
violation of law or (ii) made any payment to any federal or state
governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof.
(u) Neither the Company nor any of its affiliates has taken or
will take, directly or indirectly, any action designed to or that might
be reasonably expected to cause or result in stabilization or
manipulation of the price of the Shares or of any securities of the
Company to facilitate the sale or resale of the Shares.
(v) The Company has not conducted its business in a manner
such that it would become, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(w) The description set forth under the heading "ERISA
Investors" is true and correct in all material respects.
(x) As of the First Closing Date, the Company will be
organized and will operate in a manner so as to qualify as a "real
estate investment trust" ("REIT") under Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended (the "Code"), and will elect
to, will be qualified to and intends to remain qualified to, be taxed
as a REIT under the Code and pursuant to any applicable state tax laws.
The Company does not know of any event which would cause or is likely
to cause the Company to fail to qualify as a REIT at any time.
(y) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to financial and corporate books and records is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with
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existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(z) Neither the Company nor any affiliate has incurred any
liability for a fee, commission or other compensation on account of the
employment of a broker or finder in connection with the transactions
contemplated by this Agreement other than as disclosed in the
Registration Statement.
(aa) Each certificate signed by an officer of the Company or
of any of its affiliates and delivered to the Representative or counsel
for the Underwriters shall be deemed to be a representation and
warranty by the Company, as to the matters covered thereby.
SECTION 3. Representations and Warranties of the Underwriters.
The Representative, on behalf of the several Underwriters, represents and
warrants to the Company that the information set forth (i) on the cover page of
the Prospectus with respect to price, underwriting discounts and commissions and
terms of offering and (ii) under "Underwriting" in the Prospectus was furnished
to the Company by and on behalf of the Underwriters for use in connection with
the preparation of the Registration Statement and the Prospectus and is correct
in all material respects. The Representative represents and warrants that they
have been authorized by each of the other Underwriters as the Representative to
enter into this Agreement on its behalf and to act for it in the manner herein
provided.
SECTION 4. Purchase, Sale and Delivery of Shares. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Company agrees to issue and
sell to the Underwriters the Firm Shares. The Underwriters agree, severally and
not jointly, to purchase from the Company the number of Firm Shares as set forth
on Schedule A attached hereto. The purchase price per share to be paid by the
several Underwriters to the Company shall be $31.375 per share.
Delivery of certificates for the Firm Shares to be purchased
by the Underwriters and payment therefor shall be made at the location referred
to below at such time and date, not later than the third full business day
following the first date that any of the Shares are released by you for sale to
the public, as you shall designate by at least 48 hours' prior notice to the
Company (or at such other time and date, not later than one week after such
third full business day as may be agreed upon by the Company and the
Representative) (the "First Closing Date" or the "Closing Date"); provided,
however, that if the Prospectus is at any time prior to the First Closing Date
recirculated to the public, the First Closing Date shall occur upon the later of
the third full business day following the first date that any of
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the Shares are released by you for sale to the public or the date that is 48
hours after the date that the Prospectus has been so recirculated.
Delivery of certificates for the Firm Shares shall be made by
or on behalf of the Company to you, for the respective accounts of the
Underwriters against payment by you, for the accounts of the several
Underwriters, of the purchase price therefor by wire transfer in same-day funds
to the order of the Company. The certificates for the Firm Shares shall be
registered in such names and denominations as you shall have requested at least
two full business days prior to the First Closing Date, and shall be made
available for checking and packaging on the business day preceding the First
Closing Date at a location in New York, New York or such other location, as may
be designated by you. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the obligations of
the Underwriters.
You have advised the Company that each Underwriter has
authorized you to accept delivery of its Shares, to make payment and to issue a
receipt therefor. Each of you, individually and not as a Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Shares to
be purchased by any Underwriter whose funds shall not have been received by you
by the First Closing Date for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any of its obligations under
this Agreement.
Subject to the terms and conditions hereof, the Underwriters
propose to make a public offering of their respective portions of the Shares as
soon after the date hereof as in the judgment of the Representative is advisable
and at the public offering price set forth on the cover page of and on the terms
set forth in the Prospectus.
SECTION 5. Covenants of the Company. The Company
covenants and agrees that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at
the time and date that this Agreement is executed and delivered by the
parties hereto, to become effective. If the Registration Statement has
become or becomes effective pursuant to Rule 430A of the Rules and
Regulations, or the filing of the Prospectus is otherwise required
under Rule 424(b) of the Rules and Regulations, the Company will file
the Prospectus, properly completed, pursuant to the applicable
paragraph of Rule 424(b) of the Rules and Regulations within the time
period prescribed and will provide evidence satisfactory to you of such
timely filing. The Company will promptly advise you in writing (i) of
the receipt of any comments of the Commission,
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(ii) of any request of the Commission for amendment of or supplement to
the Registration Statement (either before or after it becomes
effective) or the Prospectus or for additional information, (iii) when
the Registration Statement shall have become effective and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of
any proceedings for that purpose. If the Commission shall enter any
such stop order at any time, the Company will use its best efforts to
obtain the lifting of such order at the earliest possible moment. The
Company will not file any amendment or supplement to the Registration
Statement (either before or after it becomes effective) or the
Prospectus of which you have not been furnished with a copy a
reasonable time prior to such filing or to which you reasonably object
or which is not in compliance with the Act and the Rules and
Regulations.
(b) The Company will prepare and file with the Commission,
promptly upon your request, any amendments or supplements to the
Registration Statement or the Prospectus which in your judgment may be
necessary or advisable to enable the several Underwriters to continue
the distribution of the Shares and will use its best efforts to cause
the same to become effective as promptly as possible. The Company will
fully and completely comply with the provisions of Rule 430A of the
Rules and Regulations with respect to information omitted from the
Registration Statement in reliance upon such Rule.
(c) If at any time within the applicable period referred to in
Section 10(a)(3) of the Act or Rule 174 of the Rules and Regulations
during which a prospectus relating to the Shares is required to be
delivered under the Act any event occurs, as a result of which the
Prospectus, including any amendments or supplements, would include an
untrue statement of a material fact, or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, or if it is necessary at any time to amend the
Prospectus, including any amendments or supplements, to comply with the
Act or the Rules and Regulations, the Company will promptly advise you
thereof and will promptly prepare and file with the Commission, at its
own expense, an amendment or supplement which will correct such
statement or omission or an amendment or supplement which will effect
such compliance and will use its best efforts to cause the same to
become effective as soon as possible; and, in case any Underwriter is
required to deliver a prospectus after the applicable time period, the
Company upon request, but at the expense of such Underwriter, will
promptly prepare such amendment or amendments to the Registration
Statement and such Prospectus or Prospectuses as may be necessary to
permit compliance
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with the requirements of Section 10(a)(3) of the Act and
Rule 174 of the Rules and Regulations, as applicable.
(d) As soon as practicable, but not later than 45 days (or 90
days if such quarter is the fiscal year end) after the end of the first
quarter ending after one year following the effective date of the
Registration Statement (as defined in Rule 158(c) of the Rules and
Regulations), the Company will make generally available to its security
holders an earnings statement (which need not be audited) covering a
period of 12 consecutive months beginning after the effective date of
the Registration Statement which will satisfy the provisions of the
last paragraph of Section 11(a) of the Act.
(e) During such period as a prospectus is required by law to
be delivered in connection with sales by an Underwriter or dealer, the
Company, at its expense, but only for the applicable period referred to
in Section 10(a)(3) of the Act or Rule 174 of the Rules and
Regulations, will furnish to you or mail to your order copies of the
Registration Statement or the Prospectus and all amendments and
supplements to any such documents in each case as soon as available and
in such quantities as you may reasonably request, for the purposes
contemplated by the Act and the Rules and Regulations.
(f) The Company shall cooperate with you and your counsel in
order to qualify or register the Shares for sale under (or obtain
exemptions from the application of) the Blue Sky and Canadian
securities laws of such jurisdictions as you designate, will comply
with such laws and will continue such qualifications, registrations and
exemptions in effect so long as reasonably required for the
distribution of the Shares. The Company will advise you promptly of the
suspension of the qualification or registration of (or any such
exemption relating to) the Shares for the offering; sale or trading in
any jurisdiction or any initiation or threat of any proceeding for any
such purpose, and in the event of the issuance of any order suspending
such qualification, registration or exemption, the Company, with your
cooperation, will use its best efforts to obtain the withdrawal
thereof.
(g) During the period of five years hereafter, the Company
will furnish to the Representative and, upon request of the
Representative, to each of the other Underwriters: (i) as soon as
practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of
the close of such fiscal year and statements of income, shareholders'
equity and cash flows for the year then ended and the opinion thereon
of the Company's independent public
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accountants; (ii) as soon as practicable after the filing thereof,
copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Report on Form 8-K or other report filed by the
Company with the Commission, the NASD or any securities exchange; and
(iii) as soon as available, copies of any report or communication of
the Company mailed generally to holders of its Shares.
(h) During the period of 90 days after the first date that any
of the Shares are released by you for sale to the public, without the
prior written consent of the Representative (which consent may be
withheld at the sole discretion of Representative), other than the
option shares disclosed in the Prospectus, the Company will not issue,
offer, sell, grant options to purchase or otherwise dispose of any of
the Company's equity securities or any other securities convertible
into or exchangeable with its Shares or other equity security except
upon exercise of the Warrants described in the Prospectus or pursuant
to the dividend reinvestment program adopted by the Company (the
"Dividend Reinvestment Plan") or pursuant to the Company's Amended and
Restated Executive and Non-Employee Director Stock Option Plan (the
"Stock Option Plan").
(i) The Company will apply the net proceeds of the sale of the
Shares sold by it substantially in accordance with the statements under
the caption "Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to qualify or
register its Shares for sale in non-issuer transactions under (or
obtain exemptions from the application of) the Blue Sky laws of the
State of California and the provincial laws of Canada as specified by
the Representative (and thereby permit market making transactions and
secondary trading in the Company's Shares in California and such
Canadian provinces as specified by the Representative), will comply
with such Blue Sky or Canadian provincial laws and will use its best
efforts to continue such qualifications, registrations and exemptions
in effect for a period of five years after the date hereof.
(k) The Company will use its best efforts to effect the
quotation of the Shares on the Nasdaq National Market System.
(l) The Company will continue to meet the requirements to
qualify as a REIT and will not revoke its election to be a REIT,
effective for the year ending December 31, 1996.
(m) The Company will maintain a transfer agent and,
if necessary under the jurisdiction of formation of the
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<PAGE> 14
Company, a registrar (which may be the same entity as the transfer
agent).
(n) The Company will continue to retain a "Big 6" Accounting
Firm as its qualified accountants and such qualified tax experts as the
Company may identify for a period of not less than two years beginning
on the First Closing Date. The Company will use its best efforts to
comply with the representations made as support for the opinion by the
Company's tax counsel under the REIT provisions of the Code, the form
of which opinion was filed as an exhibit to the Registration Statement.
(o) The Company will not invest in futures contracts, options
on futures contracts or options on commodities unless the Company is
exempt from the registration requirements of the Commodity Exchange
Act, as amended, or otherwise complies with the Commodity Exchange Act,
as amended. In addition, the Company will not engage in any activities
which might be subject to the Commodity Exchange Act unless such
activities are exempt from the Commodity Exchange Act or otherwise
comply with that Act or with an applicable no-action letter to the
Company from the Commodities Futures Trading Commission.
You, on behalf of the Underwriters, may, in your sole
discretion, waive in writing the performance by the Company of any one or more
of the foregoing covenants or extend the time for their performance.
SECTION 6. Payment of Expenses. Whether or not the
transactions contemplated hereunder are consummated or this Agreement becomes
effective or is terminated, the Company agrees to pay all costs, fees and
expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limiting the generality of the foregoing, (i) all expenses incident to
the issuance and delivery of the Shares (including all printing and engraving
costs), (ii) all fees and expenses of the registrar and transfer agent of the
Shares, (iii) all necessary issue, transfer and other stamp taxes in connection
with the issuance and sale of the Shares to the Underwriters, (iv) all fees and
expenses of the Company's counsel and the Company's independent accountants, (v)
all costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement and the
Prospectus (including all exhibits and financial statements) and all amendments
and supplements provided for herein, this Agreement, the Agreement Among
Underwriters, the Selected Dealers Agreement, the Underwriters' Questionnaire,
the Underwriters' Power of Attorney and the Blue Sky memorandum, (vi) all filing
fees, attorneys' fees and expenses incurred by the Company or the Underwriters
in connection with qualifying or registering (or
14
<PAGE> 15
obtaining exemptions from the qualification or registration of) all or any part
of the Shares for offer and sale under the Blue Sky laws or the provincial
securities laws of Canada, (vii) the filing fee of the NASD and the related
legal fees in connection with such filing and (viii) all other fees, costs and
expenses referred to in Item 14 of the Registration Statement. Except as
provided in this Section 6, Section 8 and Section 10 hereof, the Underwriters
shall pay all of their own expenses, including the fees and disbursements of
their counsel (excluding those relating to qualification, registration or
exemption under the Blue Sky and Canadian provincial securities laws and the
Blue Sky memorandum and the legal fees in connection with clearance of the
offering with the NASD referred to above).
SECTION 7. Conditions of the Obligations of the Underwriters.
The obligations of the several Underwriters to purchase and pay for the Firm
Shares on the First Closing Date shall be subject to the accuracy of the
representations and warranties on the part of the Company herein set forth as of
the date hereof and as of the First Closing Date to the accuracy of the
statements of the Company's officers, made pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder, and to the
following additional conditions:
(a) The Prospectus shall have been filed in the manner and
within the time period required by Rule 424(b) of the Rules and
Regulations; and prior to such Closing Date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued
and no proceedings for that purpose shall have been instituted or shall
be pending or, to the best knowledge of the Company or you, shall be
contemplated by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement, or
otherwise, shall have been complied with to your satisfaction.
(b) You shall be satisfied that since the respective dates as
of which information is given in the Registration Statement and
Prospectus, (i) there shall not have been any change in the capital
stock other than pursuant to the exercise of outstanding options
granted under the Stock Option Plan and Warrants disclosed in the
Prospectus or the Dividend Reinvestment Plan of the Company or any
material change in the indebtedness (other than in the ordinary course
of business) of the Company, (ii) except as set forth in or
contemplated by the Registration Statement or the Prospectus, no
material verbal or written agreement or other transaction shall have
been entered into by the Company which is not in the ordinary course of
business, (iii) no loss of damage (whether or not insured) to the
property of the Company or any of its subsidiaries shall have been
sustained which might have a Material Adverse Effect, (iv)
15
<PAGE> 16
no legal or governmental action, suit or proceeding affecting the
Company or any of its property which is material to the Company or
which affects or may affect the transactions contemplated by this
Agreement shall have been instituted or threatened and (v) there shall
not have been any material change in the condition (financial or
otherwise), business, management, results of operations or prospects of
the Company and its subsidiaries which makes it impractical or
inadvisable in the judgment of the Representative to proceed with the
public offering or purchase the Shares as contemplated hereby.
(c) There shall have been furnished to you, as Representative
of the Underwriters, on each Closing Date, in form and substance
satisfactory to you, except as otherwise expressly provided below:
(i) An opinion of Tobin & Tobin, a professional
corporation, counsel for the Company, addressed to the
Underwriters and dated the First Closing Date to the effect
that:
(1) The Company has been duly formed and is
validly existing as a corporation, is in good
standing under the laws of Maryland, and is duly
qualified to do business as a foreign corporation and
is in good standing in all other jurisdictions where
the ownership or leasing of properties or the conduct
of its business requires such qualification, except
for jurisdictions in which the failure to so qualify
would not have a Material Adverse Effect, and has the
requisite corporate power and authority to own its
properties and conduct its business as described in
the Registration Statement; and the Company does not
own or control, directly or indirectly, any
corporation, association, partnership or other
entity;
(2) Prior to the First Closing Date, the
Company has authorized and outstanding capital stock
as set forth under the heading "Capitalization" in
the Prospectus; all necessary and proper corporate
proceedings have been taken in order to duly and
validly authorize the Shares; all outstanding shares
of Common Stock have been duly and validly issued and
are fully paid and nonassessable, have been issued in
compliance with federal and state securities laws,
were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or
purchase any securities and conformed in all
16
<PAGE> 17
material respects to the description thereof
contained in the Registration Statement;
(3) The certificates representing the Shares
to be delivered hereunder are in due and proper form
under Maryland law, and when duly countersigned by
the Company's transfer agent and registrar, and
delivered to you or upon your order against payment
of the agreed consideration therefor in accordance
with the provisions of this Agreement, the Shares
represented thereby will be duly authorized and
validly issued, fully paid and nonassessable, will
not have been issued in violation of or subject to
any preemptive rights or other rights to subscribe
for or purchase securities and will conform in all
material respects to the description thereof
contained in the Registration Statement;
(4) Except for the Warrants and options
granted under the Stock Option Plan or the Class B
9.74% Cumulative Convertible Preferred Stock, to such
counsel's knowledge, there are no outstanding
options, warrants or other rights calling for the
issuance of, and, except for the Dividend
Reinvestment Plan, no commitments, plans or
arrangements to issue, any shares of capital stock of
the Company or any security convertible into or
exchangeable for capital stock of the Company;
(5)(a) The Registration Statement has become
effective under the Act, and, to such counsel's
knowledge, no stop order suspending the effectiveness
of the Registration Statement or preventing the use
of the Prospectus has been issued and no proceedings
for that purpose have been instituted or are pending
or contemplated by the Commission and any required
filing of the Prospectus and any supplement thereto
pursuant to Rule 424(b) of the Rules and Regulations
has been made in the manner and within the time
period required by such Rule 424(b);
(b) The Registration Statement, the
Prospectus and any amendment or supplement thereto
(except for the financial statements and schedules
included therein as to which such counsel need
express no opinion) comply as to form in all material
respects with the requirements of the Act and the
Rules and Regulations;
(c) To such counsel's knowledge, there are
no franchises, leases, contracts, agreements or
17
<PAGE> 18
documents of a character required to be disclosed in
the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which
are not disclosed or filed, as required; and
(d) To such counsel's knowledge, there are
no legal or governmental actions, suits or
proceedings pending or threatened against the Company
which are required to be described in the Prospectus
which are not described as required;
(6) The Company has the corporate power and
authority to enter into this Agreement, to sell and
deliver the Shares to be sold by it to the several
Underwriters and to consummate the other transactions
contemplated herein; this Agreement has been duly and
validly authorized by all necessary action by the
Company, has been duly and validly executed and
delivered by and on behalf of the Company and is a
valid and binding agreement of the Company
enforceable in accordance with its terms, except as
enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights
generally and except as to those provisions relating
to indemnity or contribution for liabilities arising
under the Act as to which no opinion need be
expressed; and no approval, authorization, order,
consent, registration, filing, qualification, license
or permit of or with any court, regulatory,
administrative or other governmental body is required
for the execution and delivery of this Agreement by
the Company or the consummation of the transactions
contemplated by this Agreement, except such as have
been obtained and are in full force and effect under
the Act and such as may be required under applicable
Blue Sky or Canadian securities laws in connection
with the purchase and distribution of the Shares by
the Underwriters;
(7) The execution and performance of this
Agreement and the consummation of the transactions
herein contemplated will not conflict with, result in
the breach of, or constitute, either by itself or
upon notice or the passage of time or both, a default
under, any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other
instrument known to such counsel to which the Company
is a party or by which the Company or its property
may be bound or affected which is material to the
Company; violate any of
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<PAGE> 19
the provisions of the certificate of incorporation or
bylaws, or other organizational documents of the
Company or, to such counsel's knowledge, violate any
statute, judgment, decree, order, rule or regulation
of any court or governmental body having jurisdiction
over the Company or its property;
(8) To such counsel's knowledge, the Company
is not in violation of its certificate of
incorporation or bylaws, or other organizational
documents and is not in breach of or default with
respect to any provision of any agreement, mortgage,
deed of trust, lease, franchise, license, indenture,
permit or other instrument known to such counsel to
which the Company is a party or by which it or its
properties may be bound or affected, except where
such default would not have a Material Adverse
Effect; and, to such counsel's knowledge, the Company
is not in violation of any laws, rules, regulations,
judgments, decrees, orders and statutes of any court
or jurisdiction to which it is subject, except where
such violation would not have a Material Adverse
Effect;
(9) To such counsel's knowledge, no holders
of securities of the Company have rights which have
not been waived to register such securities because
of the filing of the Registration Statement by the
Company or the offering or other transactions
contemplated hereby;
(10) The Company is not and will not be an
"investment company" within the meaning of the 1940
Act;
(11) The Shares have been duly designated
for quotation by the Nasdaq National Market upon
official notice of issuance;
(12) The description set forth under the
heading "ERISA Investors" is true and correct in all
material respects.
In rendering such opinion, such counsel may rely as
to matters of local law, on opinions of local counsel, and as
to matters of fact, on certificates of officers of the
Company, and of governmental officials, in which case their
opinion is to state that they are so doing. Such counsel shall
also include a statement to the effect that nothing has come
to such counsel's attention that would lead such counsel to
believe that
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<PAGE> 20
either at the effective date of the Registration Statement or
at the applicable Closing Date the Registration Statement or
the Prospectus, or any amendment or supplement thereto,
contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading (other
than with respect to the financial statements and related
financial schedules and other financial data as to which such
counsel need express no opinion).
(ii) An opinion of Giancarlo & Gnazzo, A Professional
Corporation, special tax counsel for the Company, addressed to
the Underwriters and dated the First Closing Date to the
effect that:
(1) The Company has been organized and
operated in conformity with the requirements for
qualification as a "real estate investment trust"
under the Code since the commencement of its
operation on August 19, 1994 and the Company's
current and contemplated method of operation, as
described in the Prospectus and as represented by
the Company will enable it to continue to so qualify.
(2) Although the discussion set forth in the
sections of the Prospectus entitled "Certain Federal
Income Tax Considerations" and "Federal Income Tax
Considerations" does not purport to discuss all
possible Federal income tax consequences of the
purchase, ownership and disposition of the Shares,
such discussion constitutes, in all material
respects, a fair and accurate summary of the Federal
income tax considerations that are likely to be
material to a purchaser of the Shares.
(iii) Such opinion or opinions of O'Melveny & Myers
LLP, counsel for the Underwriters dated the First Closing Date
with respect to the formation of the Company, legal matters
relating to this Agreement, the validity of the Shares, the
Registration Statement and the Prospectus and other related
matters as you may reasonably require, and the Company shall
have furnished to such counsel such documents and shall have
exhibited to them such papers and records as they may
reasonably request for the purpose of enabling them to pass
upon such matters. In connection with such opinions, such
counsel may rely on representations or certificates of
officers of the Company and governmental officials.
20
<PAGE> 21
(iv) A certificate of the Company, executed by the
Chairman of the Board or President and the chief financial or
accounting officer of the Company, dated the First Closing
Date to the effect that:
(1) The representations and warranties of
the Company set forth in Section 2 of this Agreement
are true and correct as of the date of this Agreement
and as of the First Closing Date and the Company has
complied with all the agreements and satisfied all of
the conditions on its part to be performed or
satisfied on or prior to such Closing Date;
(2) The Commission has not issued any order
preventing or suspending the use of the Prospectus
filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the
effectiveness of the Registration Statement has been
issued; and to the best of the knowledge of the
respective signers, no proceedings for that purpose
have been instituted or are pending or contemplated
under the Act;
(3) Each of the respective signers of each
certificate has carefully examined the Registration
Statement and the Prospectus; in his opinion and to
the best of his knowledge, the Registration Statement
and the Prospectus and any amendments or supplements
thereto contain all statements required to be stated
therein; and neither the Registration Statement nor
the Prospectus nor any amendment or supplement
thereto includes any untrue statement of a material
fact or omits to state any material fact required to
be stated therein or necessary to make the statements
therein not misleading;
(4) Since the initial date on which the
Registration Statement was filed, no agreement,
written or oral, transaction or event has occurred
which should have been set forth in an amendment to
the Registration Statement or in a supplement to or
amendment of any prospectus which has not been
disclosed in such a supplement or amendment;
(5) Since the respective dates as of which
information is given in the Registration Statement
and the Prospectus, and except as disclosed in or
contemplated by the Prospectus, there has not been
any change or development which would have a Material
Adverse Effect; and no legal or governmental action,
suit or proceeding is pending
21
<PAGE> 22
or threatened against the Company which would have a
Material Adverse Effect; since such dates and except
as so disclosed, the Company has not entered into any
verbal or written agreement or other transaction
which is not in the ordinary course of business or
which could result in a material reduction in the
future earnings of the Company or (other than in the
ordinary course of business) incurred any material
liability or obligation, direct, contingent or
indirect or made any change in its capital stock,
made any material adverse change in its short-term
debt (other than in the ordinary course of business)
or funded debt or repurchased or otherwise acquired
any of the Company's capital stock; and the Company
has not declared or paid any dividend, or made any
other distribution, upon its capital stock payable to
shareholders of record on a date prior to the First
Closing Date;
(6) Since the respective dates as of which
information is given in the Registration Statement
and the Prospectus and except as disclosed in or
contemplated by the Prospectus, none of the personal
or real property of the Company has sustained a
material loss or damage by strike, fire, flood,
windstorm, accident or other calamity (whether or not
insured).
(v) On or before the First Closing Date, letters from
each director and officer of the Company, in form and
substance satisfactory to you, confirming that for a period of
90 f 90 days after the first date that any of the Shares are
released by you for sale to the public, such person will not
directly or indirectly sell or offer to sell or otherwise
dispose of any shares of Shares or any right to acquire such
shares without the prior written consent of Montgomery
Securities, which consent may be withheld at the sole
discretion of Montgomery Securities.
(vi) On the date that this Agreement is executed and also
on the First Closing Date a letter addressed to you, as
Representative of the Underwriters, from C&L, independent
accountants, the first one to be dated the day of this
Agreement, the second one to be dated the First Closing Date,
in form and substance satisfactory to the Representative, to
the effect that:
(1) C&L are independent certified public
accountants with respect to the Company within the
meaning of the Act and the Rules and Regulations;
22
<PAGE> 23
(2) It is their opinion that the financial
statements, historical summaries and any
supplementary financial information and supporting
schedule included in the Registration Statement and
the Prospectus examined by them comply as to form in
all material respects with the applicable accounting
requirements of the Act and the Rules and
Regulations;
(3) Based upon procedures set forth in
detail in such letter, including a reading of the
latest available interim financial statements of the
Company and inquiries of officials of the Company
responsible for financial and accounting matters,
nothing has come to their attention which causes them
to believe that:
(A) the unaudited financial
information with respect to the results of
operations for and at the end of the period
ended September 30, 1996, and any subsequent
quarters included in the Registration
Statement (or incorporated by reference
therein) do not comply as to form in all
material respects with the applicable
accounting requirements of the Act and the
Rules and Regulations or are not presented
in conformity with generally accepted
accounting principles applied on a basis
substantially consistent with that of the
audited financial statements included in the
Registration Statement, or do not agree with
the corresponding amounts in the audited
financial statements for each of the years
then ended, or that with respect to the
unaudited pro forma financial statements,
such financial statements do not comply as
to form in all material respects with the
applicable accounting requirements of the
Act and the Rules and Regulations and the
pro forma adjustments have not been properly
applied to the historical amounts in the
compilation of such statements, or
(B) at a specified date not more
than five days prior to the date of this
Agreement, there has been any change in the
assets or shareholders' equity of the
Company (other than the issuance of the
Shares to be sold by the Company) as
compared with the amounts shown in the
September 30, 1996 balance sheet of the
Company included in the Registration
Statement (or incorporated therein by
reference), except for changes
23
<PAGE> 24
which the Prospectus discloses have occurred
or may occur or which are described in such
letter; and
(4) In addition to the examination referred
to in their opinions and the procedures referred to
above, they have carried out certain specified
procedures, not constituting an audit, in accordance
with generally accepted auditing standards, with
respect to certain amounts, percentages and financial
information which are included in the Registration
Statement and Prospectus and which were specified by
you, and have found such amounts, percentages and
financial information to be in agreement with, or
derived from, the relevant accounting, financial and
other records of the Company.
(vii) The Firm Shares shall have been approved for quotation
on the Nasdaq National Market, subject to official notice of issuance,
and the NASD, upon review of the terms of the public offering, shall
not have objected to such offering, such terms or the Underwriters'
participation in the same.
(viii) The Company shall have furnished to you such further
certificates and documents as you shall have reasonably requested.
(ix) There shall have been delivered to you the Firm Shares in
the manner required pursuant to Section 4 hereof.
All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are satisfactory to you
and to O'Melveny & Myers LLP, counsel for the Underwriters. The Company shall
furnish you with such manually signed or conformed copies of such opinions,
certificates, letters and documents as you request. Any certificate signed by
any officer of the Company and delivered to the Representative or to counsel for
the Underwriters shall be deemed to be a representation and warranty by the
Company to the Underwriters as to the statements made therein.
If any condition to the Underwriters' obligations hereunder to
be satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification by you as
Representative to the Company without liability on the part of any Underwriter
or the Company, except for the expenses to be paid or reimbursed by the Company
pursuant to Sections 6 and 8 hereof and except to the extent provided in Section
10 hereof.
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<PAGE> 25
SECTION 8. Reimbursement of Underwriters' Expenses.
Notwithstanding any other provisions hereof, if this Agreement shall be
terminated by you pursuant to Section 7, or if the sale to the Underwriters of
the Shares at the First Closing is not consummated because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or to comply with any provision hereof, the Company agrees to reimburse you and
the other Underwriters upon demand for all out-of-pocket expenses that shall
have been reasonably incurred by you and them in connection with the proposed
purchase and the sale of the Shares, including but not limited to fees and
disbursements of counsel relating directly to the offering contemplated by the
Prospectus. Any such termination shall be without liability of any party to any
other party except that the provisions of this Section 8, Section 6 and Section
10 shall at all times be effective and shall apply.
SECTION 9. Effectiveness of Registration Statement. You and
the Company will use your best efforts to prevent the issuance of any stop order
suspending the effectiveness of the Registration Statement and, if such stop
order be issued, to obtain as soon as possible the lifting thereof.
SECTION 10. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the Act against any losses,
claims, damages, liabilities or expenses, joint or several, to which such
Underwriter or such controlling person may become subject, under the Act, the
Exchange Act, or other federal, state or Canadian statutory law or regulation,
or at common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of the Company), insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof as contemplated below) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state in any of them a material fact required to be stated therein or necessary
to make the statements in any of them not misleading, or arise out of or are
based in whole or in part on any inaccuracy in the representations and
warranties of the Company contained herein or any failure of the Company to
perform its obligations hereunder or under law; and will reimburse each
Underwriter and each such controlling person for any legal and other expenses as
such expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage, liability or expense arises out of or is based
upon an untrue statement or alleged untrue statement or
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<PAGE> 26
omission or alleged omission made in the Registration Statement or the
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with the information furnished to the Company pursuant to Section 3
hereof. In addition to its other obligations under this Section 10(a), the
Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, or any
inaccuracy in the representations and warranties of the Company herein or
failure to perform its obligations hereunder, all as described in this Section
10(a), it will reimburse each Underwriter on a quarterly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligation to reimburse each Underwriter for
such expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, each Underwriter
shall promptly return it to the Company, together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time
by Bank of America NT&SA, San Francisco, California (the "Prime Rate"). Any such
interim reimbursement payments which are not made to an Underwriter within 30
days of a request for reimbursement shall bear interest at the Prime Rate from
the date of such request. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Act, against any losses, claims, damages, liabilities or
expenses to which the Company, or any such director, officer or controlling
person may become subject, under the Act, the Exchange Act, or other federal,
state or Canadian statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter), insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof as contemplated
below) arise out of or are based upon any untrue or alleged untrue statement of
any material fact contained in the Registration Statement or the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
26
<PAGE> 27
Registration Statement, the Prospectus or any amendment or supplement thereto,
in reliance upon and in conformity with the information furnished to the Company
pursuant to Section 3 hereof; and will reimburse the Company, or any such
director, officer or controlling person of the Company for any legal and other
expense reasonably incurred by the Company, or any such director, officer or
controlling person of the Company in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action. In addition to its other obligations under this Section
10(b), each Underwriter severally agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged statement
or omission, described in this Section 10(b) which relates to information
furnished to the Company pursuant to Section 3 hereof, it will reimburse the
Company (and, to the extent applicable, each officer, director and controlling
person) on a quarterly basis for all reasonable legal or other expenses incurred
in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director and controlling person) for such expenses and
the possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Company and, to the
extent applicable, each officer, director or controlling person of the Company
shall promptly return it to the Underwriters together with interest, compounded
daily, determined on the basis of the Prime Rate. Any such interim reimbursement
payments which are not made within 30 days of a request for reimbursement, shall
bear interest at the Prime Rate from the date of such request. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section, notify the indemnifying party in writing of the commencement
thereof; but the omission to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party for contribution
or otherwise than under the indemnity agreement contained in this Section or to
the extent it is not prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with all other indemnifying parties similarly notified, to
assume the
27
<PAGE> 28
defense thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be a conflict between the positions of
the indemnifying party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the next preceding sentence or (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement of
the action, in each of which cases the fees and expenses of counsel shall be at
the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 10 is
required by its terms, but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under Sections (a),
(b) or (c) of this Section 10 in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
herein (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Underwriters from the offering of the Shares or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Underwriters in connection with the statements or omissions
or inaccuracies in the representations and warranties herein which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The respective relative benefits received by
the Company and the Underwriters shall be deemed to be in the same proportion,
in the case of the Company as the total price paid to the Company, for the
Shares sold by the Company to the Underwriters (net of underwriting commissions,
but before deducting expenses), and in
28
<PAGE> 29
the case of the Underwriters as the underwriting commissions received by them
bears to the total of such amounts paid to the Company and received by the
Underwriters as underwriting commissions. The relative fault of the Company and
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact or the inaccurate or the
alleged inaccurate representation and/or warranty relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section (c) of this
Section 10, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in Section (c) of this Section 10 with respect to notice of
commencement of any action shall apply if a claim for contribution is to be made
under this Section 10 (d); provided, however, that no additional notice shall be
required with respect to any action for which notice has been given under
Section (c) of this Section 10 for purposes of indemnification. The Company and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 10 were determined solely by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in this Section 10(d). Notwithstanding the provisions of this
Section 10, no Underwriter shall be required to contribute any amount in excess
of the amount of the total underwriting commissions received by such Underwriter
in connection with the Shares underwritten by it and distributed to the public.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 10 are several in proportion to their
respective underwriting commitments and not joint.
(e) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in Sections 10(a)
and 10(b) hereof, including the amounts of any requested reimbursement payments
and the method of determining such amounts, shall be settled by arbitration
conducted under the provisions of the Constitution and Rules of the Board of
Governors of the New York Stock Exchange, Inc. or pursuant to the Code of
Arbitration Procedure of the NASD. Any such arbitration must be commenced by
service of a written demand for arbitration or written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party
demanding
29
<PAGE> 30
arbitration does not make such designation of an arbitration tribunal in such
demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in Sections 10(a) and (b) hereof
and would not resolve the ultimate propriety or enforceability of the obligation
to reimburse expenses which is created by the provisions of such Sections 10(a)
and 10(b) hereof.
SECTION 11. Default of Underwriters. It shall be a condition
to this Agreement and the obligation of the Company to sell and deliver the
Shares hereunder, and of each Underwriter to purchase the Shares in the manner
as described herein, that, except as hereinafter in this Section provided, each
of the Underwriters shall purchase and pay for all the Shares agreed to be
purchased by such Underwriter hereunder upon tender to the Representative of all
such shares in accordance with the terms hereof. If any Underwriter or
Underwriters default in its or their obligations to purchase Shares hereunder on
the First Closing Date and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed to purchase on such Closing Date
does not exceed 10% of the total number of Shares which the Underwriters are
obligated to purchase on such Closing Date, the non-defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Shares which such defaulting Underwriters agreed but
failed to purchase on such Closing Date. If any Underwriter or Underwriters so
default and the aggregate number of Shares with respect to which such default
occurs is more than 10% of the total number of Shares which the Underwriters are
obligated to purchase on such Closing Date and arrangements satisfactory to the
Representative and the Company for the purchase of such Shares by other persons
are not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the Company,
except for the expenses to be paid by the Company pursuant to Section 6 hereof
and except to the extent provided in Section 10 hereof.
In the event that Shares to which a default relates are to be
purchased by the non-defaulting Underwriters or by another party or parties, the
Representative or the Company shall have the right to postpone the First Closing
Date for not more than five business days in order that the necessary changes in
the Registration Statement, Prospectus and any other documents, as well as any
other arrangements, may be effected. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
SECTION 12. Effective Date. This Agreement shall
become effective immediately as to Sections 6, 8, 10, 13 and 14,
30
<PAGE> 31
and as to all other provisions, (i) if, at the time of execution of this
Agreement, the Registration Statement has not become effective, at 2:00 P.M.,
California time, on the first full business day following the effectiveness of
the Registration Statement, or (ii), if at the time of execution of this
Agreement the Registration Statement has been declared effective, at 2:00 P.M.,
California time, on the first full business day following the date of execution
of this Agreement; but this Agreement shall nevertheless become effective at
such earlier time after the Registration Statement becomes effective as you may
determine on and by notice to the Company or by release of any of the Shares for
sale to the public. For the purposes of this Section 12, the Shares shall be
deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Shares or upon the release by you of
telegrams (i) advising Underwriters that the Shares are released for public
offering or (ii) offering the Shares for sale to securities dealers, whichever
may occur first.
SECTION 13. Termination. Without limiting the right
to terminate this Agreement pursuant to any other provision
hereof:
(a) This Agreement may be terminated by the Company by notice
to you or by you by notice to the Company at any time prior to the time
this Agreement shall become effective as to all its provisions, and any
such termination shall be without liability on the part of the Company
to any Underwriter (except for the expenses to be paid or reimbursed by
the Company pursuant to Sections 6 and 8 hereof and except to the
extent provided in Section 10 hereof) or of any Underwriter to the
Company (except to the extent provided in Section 10 hereof).
(b) This Agreement may also be terminated by you prior to the
First Closing Date by notice to the Company (i) if additional material
governmental restrictions, not in force and effect on the date hereof,
shall have been imposed upon trading in securities generally or minimum
or maximum prices shall have been generally established on the New York
Stock Exchange or on the American Stock Exchange or in the over the
counter market by the NASD, or trading in securities generally shall
have been suspended on either such Exchange or in the over the counter
market by the NASD, or a general banking moratorium shall have been
established by federal, New York or California authorities; (ii) if an
outbreak of major hostilities or other national or international
calamity or any substantial change in political, financial or economic
conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in the judgment of the Representative, to affect
adversely the marketability of the Shares; (iii) if any adverse event
shall have occurred or shall exist which makes untrue or
31
<PAGE> 32
incorrect in any material respect any statement or information
contained in the Registration Statement or Prospectus or which is not
reflected in the Registration Statement or Prospectus but should be
reflected therein in order to make the statements or information
contained therein not misleading in any material respect; or (iv) if
there shall be any action, suit or proceeding pending or threatened, or
there shall have been any development involving particularly the
business or properties or securities of the Company or the transactions
contemplated by this Agreement, which, in the reasonable judgment of
the Representative, may have a Material Adverse Effect or makes it
impracticable or inadvisable to offer or sell the Shares. Any
termination pursuant to this Subsection (b) shall be without liability
on the part of any Underwriter to the Company or on the part of the
Company to any Underwriter (except for expenses to be paid or
reimbursed by the Company pursuant to Sections 6 and 8 hereof and
except to the extent provided in Section 10 hereof).
SECTION 14. Representations and Indemnities to Survive
Delivery. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the Company's officers and of the
several Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of its officers, directors or
controlling persons, as the case may be, and will survive delivery of and
payment for the Shares sold hereunder and any termination of this Agreement.
SECTION 15. Notices. All communications hereunder shall be in
writing and, if sent to the Representative shall be mailed, delivered,
telecopied or telegraphed and confirmed to Montgomery Securities at 600
Montgomery Street, San Francisco, California 94111, Telecopier: (415) 249-5513,
Attention: Kathleen Smythe, with a copy to O'Melveny & Myers LLP, Embarcadero
Center West 275 Battery Street, San Francisco, California 94111, Telecopier:
(415) 984-8701, Attention: Peter T. Healy; if sent to the Company, shall be
mailed, delivered, telecopied or telegraphed and confirmed to the Company at 591
Redwood Highway, Suite 3100, Mill Valley, CA 94941, Attention: Douglas B.
Hansen, President and Chief Financial Officer, with a copy to Tobin & Tobin, One
Montgomery Street, 15th Floor, San Francisco, CA 94104, Telecopier: (415)
433-3883, Attention: Phillip R. Pollock. Any party may change the address for
receipt of communications hereunder by giving notice to the others.
SECTION 16. Successors. This Agreement will inure to
the benefit of and be binding upon the parties hereto, including
any substitute Underwriters pursuant to Section 11 hereof, and to
the benefit of the officers and directors and controlling persons
referred to in Section 10, and in each case their respective
32
<PAGE> 33
successors, personal representatives and assigns, and no other person will have
any right or obligation hereunder. No such assignment shall relieve any party of
its obligations hereunder. The term "successors" shall not include any purchaser
of the Shares as such from any of the Underwriters merely by reason of such
purchase.
SECTION 17. Underwriters' Representative. You will act as
Representative for the several Underwriters in connection with all dealings
hereunder, and any action under or in respect of this Agreement taken by you, as
Representative, will be binding upon all of the Underwriters.
SECTION 18. Partial Unenforceability. The invalidity or
unenforceability of any section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other section, paragraph or
provision hereof. If any section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 19. Applicable Law. This Agreement shall be
governed by and construed in accordance with the internal laws (and not the laws
pertaining to conflicts of laws) of the State of California.
SECTION 20. Knowledge. As used in this Agreement, the term
knowledge or best knowledge on the part of an entity shall include the knowledge
of such entity's officers and any other employees with managerial
responsibilities and such entity shall only make such statement after conducting
a diligent investigation on the subject matter thereof.
SECTION 21. General. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in
several counterparts, each one of which shall be an original, and all of which
shall constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders
and the singular and the plural include one another. The section headings in
this Agreement are for the convenience of the parties only and will not affect
the construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company and you.
33
<PAGE> 34
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed copies hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters, including you, all in accordance with its terms.
Very truly yours,
REDWOOD TRUST, INC.
By: /s/ George E. Bull, III
_______________________________
George E. Bull, III
Chairman of the Board and
Chief Executive Officer
The foregoing Underwriting Agreement is hereby
confirmed and accepted by us in San Francisco,
California as of the date first above written.
MONTGOMERY SECURITIES
Acting as Representative of the
several Underwriters named in
the attached Schedule A.
By MONTGOMERY SECURITIES
By: /s/ Dick Smith
______________________________
Managing Director
34
<PAGE> 35
SCHEDULE A
<TABLE>
<CAPTION>
Amount of
Securities
Underwriter to be Purchased
- ----------- ---------------
<S> <C>
Montgomery Securities 1,250,000
Total 1,250,000
</TABLE>
<PAGE> 1
Exhibit 5.1
[LETTERHEAD OF TOBIN & TOBIN]
November 19, 1996
The Board of Directors
Redwood Trust, Inc.
591 Redwood Highway
Suite 3100
Mill Valley, CA 94941
Re: Supplemental Prospectus to Registration Statement
on Form S-3 (Registration No. 333-11665; declared
effective September 19, 1996
Ladies and Gentlemen:
We have acted as your counsel in connection with the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), and the sale by Redwood Trust, Inc., a Maryland corporation (the
"Company"), of an aggregate of 1,250,000 shares of the Company's common stock,
par value $0.01 per share (the "Common Stock" or the "Shares") pursuant to the
Underwriting Agreement, dated November 19, 1996, between the Company and
Montgomery Securities (the "Underwriting Agreement").
This opinion is delivered in accordance with the requirements
of Items 601(b)(5) and (23) of Regulation S-K under the Securities Act.
In connection with this opinion, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Universal Shelf Registration Statement on Form S-3,
relating, among other securities, to the Shares, filed with the Securities and
Exchange Commission (the "Commission") under the Securities Act on September 10,
1996, as amended and declared effective by the Commission on September 19, 1996
(together with all exhibits thereto, the "Registration Statement"), (ii) the
Supplemental Prospectus to the Registration Statement pursuant to Rule 424(b)(5)
of the Rules and Regulations promulgated under the Securities Act, relating to
the Shares (the "Supplemental Prospectus"), (iii) the Charter of the Company, as
amended, (iv) the Amended and Restated Bylaws of the Company, (v) resolutions
<PAGE> 2
TOBIN & TOBIN
The Board of Directors
Redwood Trust, Inc.
November 19, 1996
Page 2
of the Board of Directors of the Company relating to the issuance and sale of
the Shares, the filing of the Supplemental Prospectus, and the previous filing
and effectiveness of the Registration Statement, adopted at a meeting on October
31, 1996 and resolutions of the Pricing Committee relating to the pricing of the
Shares and the Underwriting Agreement, adopted at a meeting on November 18,
1996, and (vi) a specimen of the certificates representing the Shares. We have
also examined such other documents, certificates and records as we have deemed
necessary or appropriate as a basis for the opinion set forth below.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies, and
the authenticity of the originals of such copies. As to any facts material to
this opinion which we did not independently establish or verify, we have relied
upon oral or written statements and representations of officers and other
representatives of the Company and others.
Members of our firm are admitted to the practice of law in the
State of California and we do not express any opinion as to the laws of any
other jurisdiction, except for those matters of Maryland law for which we have
relied solely upon the legal opinion of Piper & Marbury, L.L.P., Baltimore,
Maryland, dated on or about November 19, 1996.
Based upon and subject to the foregoing, we are of the opinion
that the Shares to be issued by the Company in the offering, described in the
Registration Statement, have been duly and validly authorized for issuance, and,
upon issuance and delivery of the Shares to the Underwriters against payment
therefor in accordance with the terms of the Underwriting Agreement, the Shares
will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion with the
Commission as Exhibit 5.1 to Form 8-K, and its incorporation by reference as an
exhibit to the Registration Statement. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of
<PAGE> 3
TOBIN & TOBIN
The Board of Directors
Redwood Trust, Inc.
November 19, 1996
Page 3
the Securities Act or under the rules and regulations of the
Commission promulgated thereunder.
Very truly yours,
/s/ Tobin & Tobin
<PAGE> 1
Exhibit 5.2
[PIPER & MARBURY LETTERHEAD]
November 19, 1996
Redwood Trust, Inc.
591 Redwood Highway, Suite 3100
Mill Valley, California 94941
Ladies and Gentlemen:
We have acted as special Maryland counsel to Redwood Trust, Inc., a
Maryland corporation (the "Company"), in connection with the registration under
the Securities Act of 1933, as amended (the "Act"), pursuant to a Registration
Statement on Form S-3 of the Company (Registration No. 333-11665) (the
"Registration Statement") filed with the Securities and Exchange Commission (the
"Commission") for offering by the Company from time to time of up to
$200,000,000 aggregate initial offering price of: (i) shares of common stock,
par value $0.01 per share (the "Common Stock"); (ii) shares of preferred stock,
par value $0.01 per share (the "Preferred Stock"); (iii) warrants to purchase
Common Stock or Preferred Stock (the "Warrants"); (iv) rights to purchase shares
of Common Stock or Preferred Stock (the "Shareholder Rights"); and (v) any
combination of the foregoing types of securities. The Common Stock, the
Preferred Stock, the Warrants and the Shareholder Rights are collectively
referred to herein as the "Securities." The Registration Statement provides that
the Securities may be offered separately or together, in separate series, in
amounts, at prices, and on terms to be set forth in one or more supplements to
the Prospectus (each a "Prospectus Supplement"). This opinion is being provided
at your request in connection with the sale of up to 1,250,000 shares of the
Common Stock pursuant to a Prospectus Supplement.
In rendering the opinion expressed herein, we have examined the
Registration Statement (and all amendments thereto), the Prospectus Supplement
relating to the Common Stock, the Charter and By-Laws of the Company, minutes of
the proceedings of the Company's Board of Directors or a committee thereof
authorizing the issuance of the Common Stock, and such other documents as we
have considered necessary. We have also examined a Certificate of Secretary of
the Company dated November 19, 1996 (the "Certificate"). In rendering our
opinion, we are
<PAGE> 2
[PIPER & MARBURY LETTERHEAD]
Redwood Trust, Inc.
November 19, 1996
Page 2
relying as to factual matters on the Certificate and have made no independent
investigation or inquiries as to the matters set forth therein.
Based upon the foregoing, we are of the opinion and so advise you that upon
the issuance and delivery of the Common Stock in accordance with the terms set
forth in the Prospectus Supplement and the underwriting agreement, the Common
Stock will have been duly and validly authorized and will be legally issued,
fully-paid, and non-assessable.
The opinion expressed herein is solely for (i) the use of the Company in
connection with the Registration Statement, and (ii) the use of Tobin & Tobin in
giving their legality opinion to be filed as an exhibit to the Registration
Statement or in a Current Report on Form 8-K. This opinion may not be relied on
by any other person or in any other connection without our prior written
approval. This opinion is limited to the matters set forth herein, and no other
opinion should be inferred beyond the matters expressly stated.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement or in a Current Report on Form 8-K and to the reference
to us under the heading "Legal Matters" in the Prospectus and the Prospectus
Supplement included in the Registration Statement. In giving our consent, we do
not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Commission thereunder.
Very truly yours,
/s/ Piper & Marbury
<PAGE> 1
EXHIBIT 8.1
[Letterhead of Giancarlo & Gnazzo]
November 19, 1996
Redwood Trust, Inc.
591 Redwood Highway
Suite 3100
Mill Valley, CA 94941
Re: Redwood Trust, Inc. Shelf Registration
Dear Ladies and Gentlemen:
You have requested our opinion in connection with the Prospectus
Supplement, dated November 19, 1996 (the "Prospectus Supplement"), to the Form
S-3 Shelf Registration Statement, dated September 19, 1996 (the "Registration
Statement") being filed by Redwood Trust, Inc. (the "Company") with respect
to 1,250,000 shares of its common stock, par value of $0.01 per share
(the "Common Stock").
We have acted as your special tax counsel in connection with the
Registration Statement and Prospectus Supplement, and have assisted in the
preparation of the tax summary for each such document. In formulating our
opinions, we have reviewed (i) the Registration Statement and the Prospectus
Supplement, (ii) the Articles of Incorporation of the Company, as amended and
supplemented to date, (iii) the Bylaws, as amended, of the Company, and (iv)
such resolutions, certificates, records, and other documents provided by the
Company as we have deemed necessary or appropriate as a basis for the opinions
set forth below. In addition, the Company has provided us with a certificate
(the "Officer's Certificate"), executed by a duly appointed and knowledgeable
officer of the Company, and upon which we have relied, setting forth certain
representations relating to various factual and other matters including the
prior, current and future methods of operation of the Company. We have also
relied upon the opinion of Piper & Marbury, L.L.P., dated on or about the date
hereof, with respect to certain matters of Maryland law.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or other copies, and the
authenticity of the originals of such copies.
In rendering our opinions, we have assumed that the transactions
described in or contemplated by the foregoing documents have been or will be
consummated in accordance with such operative documents, and that such documents
accurately reflect the material facts of such transactions. In addition, our
opinions are based on the correctness of the following specific assumptions: (i)
the Company has been and will continue to be organized and operated in the
manner described in the Officer's Certificate, the Registration Statement, and
the other relevant documents referred to above; and (ii) there have been no
changes in the applicable laws
<PAGE> 2
Redwood Trust, Inc.
November 19, 1996
Page 2
of the State of Maryland, the Internal Revenue Code of 1986, as amended (the
"Code"), the regulations promulgated thereunder by the Treasury Department (the
"Treasury Regulations"), and the interpretations of the Code and the Treasury
Regulations by the courts and the Internal Revenue Service, all as they exist on
the date of this letter. With respect to these assumptions, it should be noted
that (x) in the case of the former assumption, the representations set forth in
the Officer's Certificate are highly factual in nature and reflect an intention
with respect to the future conduct of the business of the Company which may not
be achievable if there are future changes in the circumstances of the Company
and (y) in the case of the latter assumption, statutes, regulations, judicial
decisions, and administrative interpretations are subject to change at any time
and, in some circumstances, with retroactive effect. Any material change that is
made after the date hereof in any of the foregoing bases for our opinions could
adversely affect our conclusions.
Based on the foregoing, we are of the opinion that the Company has been
organized and operated in conformity with the requirements for qualification as
a "real estate investment trust" under the Code since the commencement of its
operations on August 19, 1994 through September 30, 1996, the date of the most
recent unaudited financials statements of the Company reviewed by us, and the
Company's current and contemplated methods of operation, as described in the
Registration Statement and the Prospectus Supplement, and as represented to us
by the Company, will enable it to continue to so qualify.
Other than as expressly stated above, we express no opinion on any
issue relating to the Company or to any investment therein or under any law
other than the Federal income tax laws.
We are furnishing this opinion to you solely in connection with the
filing of the Registration Statement and it is not to be relied upon, used,
circulated, quoted or otherwise referred to for any other purpose without our
express written permission.
We consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to Giancarlo & Gnazzo, A
Professional Corporation under the caption "Certain Federal Income Tax
Considerations" in the Prospectus included in the Registration Statement.
Very truly yours,
/s/ Giancarlo & Gnazzo
A Professional Corporation
