REDWOOD TRUST INC
EXHIBIT 10.3
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<TYPE>EX-10.3
<SEQUENCE>4
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<DESCRIPTION>EXHIBIT 10.3
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.3
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>SECOND AMENDMENT TO LEASE</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Second Amendment to Lease
(&#147;Second Amendment&#148;), dated as of July&nbsp;31<SUP style="font-size: 85%; vertical-align: text-top">st</SUP>, 2006 (the
&#147;Effective Date), is entered into by and between Bently Holdings California LP, a California
limited partnership (&#147;Landlord&#148;), and Redwood Trust, Inc., a Maryland corporation (&#147;Tenant&#148;).
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>RECITALS</U>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LB Strawberry LLC, as landlord, and Tenant entered into that certain Belvedere Place Office
Lease dated February&nbsp;27, 2003, and amended by that certain First Amendment to Belvedere Place Office
Lease dated April&nbsp;10, 2003 (collectively, the &#147;Lease&#148;) for the premises consisting of approximately
nineteen thousand nine hundred eighty-two (19,982) rentable square feet (the &#147;Premises&#148;) on the
third floor of the building located at One Belvedere Place, Mill Valley California (the
&#147;Building&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In November&nbsp;2003, Landlord acquired the Building, together with the other building and
improvements known as Belvedere Place, and all right, title and interest of LB Strawberry in and to
the Lease, as landlord, was assigned to Landlord.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Term of the Lease is scheduled to expire on May&nbsp;31, 2013. The Lease provides Tenant
with one option to extend the Term of the Lease for an additional period of sixty (60)&nbsp;months.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Landlord and Tenant now desire to enter into this Second Amendment to amend the Lease to
grant Tenant one additional option to extend the Term of the Lease for a period of five (5)&nbsp;years.
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>AGREEMENT</U>
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<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In consideration of the mutual covenants set forth herein, and other valuable consideration,
Landlord and Tenant agree as follows:
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notwithstanding anything to the contrary to contained in the Lease:
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Options to Extend the Term.</U> Section 40(a) of the Lease is hereby deleted and
replaced with the following:
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>(i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Extension Terms.</U>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>First Extension Term.</U> Landlord grants to Tenant an
option to extend the Initial Term (the <B>&#147;First Extension
Option&#148;</B>) with
respect to all (but not less than all) of the rentable area of the
Premises leased by Tenant as of the Expiration Date of the Initial Term
for five (5)&nbsp;years (the <B>&#147;First Extension
Term&#148;</B>). The First &#147;Extension
Term shall commence immediately following the Expiration Date of the
Initial Term. The First Extension Option shall be exercised, if at
all, by written notice to Landlord at any time during the Initial Term
on or before the date that is one hundred eighty (180)&nbsp;days prior to
the Expiration Date, which notice shall be irrevocable by Tenant,
Notwithstanding the foregoing, if an Event of Default (following the
expiration of all applicable cure period without cure) exists under
this Lease either at the time Tenant exercises the First Extension
Option or at any time thereafter prior to on upon the commencement of
the First Extension Term, Landlord shall have, in addition to all of
Landlord&#146;s other rights and remedies under this Lease, the right to
terminate the First Extension Option and to cancel unilaterally
Tenant&#146;s exercise of the First Extension Option, in which event the
Expiration Date of this Lease shall be and remain the then scheduled
Expiration Date, and Tenant shall have no further rights under this
Lease to renew or extend the Term.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) <U>Second Extension Term.</U> Landlord grants to Tenant
an option to extend Term of this Lease (the <B>&#147;Second Extension
Option&#148;</B>)
with respect to all (but not less than all) of the rentable area of the
Premises leased by Tenant as of the Expiration Date of the First
Extension Term for five (5) years (the <B>&#147;Second Extension
Term&#148;</B>). The
Second Extension Term shall commence
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">immediately following the Expiration Date of the First Extension Term. The
Second Extension Option shall be exercised, if at all, by written notice
to Landlord at any time during the First Extension Term on or before the
date that is one hundred eighty (180)&nbsp;days prior to the Expiration Date of
the First Extension Term, which notice shall be irrevocable by Tenant.
Notwithstanding the foregoing, if an Event of Default (following the
expiration of all applicable cure period without cure) exists under this
Lease either at the time Tenant exercises the Second Extension Option or
at any time thereafter prior to or upon the commencement of the Second
Extension Term, Landlord shall have, in addition to all of Landlord&#146;s
other rights and remedies under this Lease, the right to terminate the
Second Extension Option and to cancel unilaterally Tenant&#146;s exercise of
the Second Extension Option, in which event the Expiration Date of this
Lease shall be and remain the then scheduled Expiration Date of the First
Extension Term, and Tenant shall have no further rights under this Lease
to renew or extend the Term
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    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>No Other Modifications</U>. Except as amended and modified herein, the Lease shall remain unmodified
and in full force and effect. In the event of any conflict or inconsistency between the terms
and provisions of this Second Amendment and the terms and conditions of the Lease, the terms
and conditions of this Second Amendment shall govern and control.</TD>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment as of the date
first above written.
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<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
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    <TD colspan="3" valign="top" align="left"><U>LANDLORD</U></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U>TENANT</U></TD>
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">BENTLY HOLDINGS CA LP,</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">REDWOOD TRUST, INC.</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">A California Limited Partnership</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">a Maryland Corporation</TD>
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Chris Bently
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Harold F. Zagunis</TD>
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<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chris Bently
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Harold F. Zagunis, CFO</TD>
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">7/27/06
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">7/31/06</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Amber Marie Bently</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amber Marie Bently</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">7/27/06</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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