Amended and Restated Variable Terms Letter among Angel Oak Mortgage, Inc., Angel Oak Mortgage Fund TRS and Banc of California, National Association, dated June 21, 2021

Angel Oak Mortgage, Inc.

Angel Oak Mortgage Fund TRS

Guarantor:

Targeted Repurchase Date:

Shall mean Seller 1

For Eligible Non-QM Loans and Eligible Multi Family Mortgage Loans: three hundred and sixty four (364) days following the Purchase Date.

For Eligible Commercial Mortgage Loans: one hundred and twenty (120) days following the Purchase Date for loans that have not been underwritten and approved by Banc prior to submission for funding, and three hundred and sixty four (364) days following the Purchase Date for loans that have been underwritten and approved by Banc prior to submission for funding.

The Targeted Repurchase date shall not be advanced on any Purchased Mortgage Loans if the facility is not renewed on the Purchase Contract Expiration Date.

For Eligible Non-QM Loans: Day 1-364, the greater of 3.50 % or One Month LIBOR Rate¹ plus 2.50%; over 364 days, plus the Seasoned Spread.

For Eligible Multi Family Mortgage Loans, Day 1-364: the greater of 4.00% or One Month LIBOR plus 3.00%; Over 364 days: the Seasoned Spread;

For Eligible Commercial Mortgage Loans, Day 1-364: the greater of 4.125% or One Month LIBOR plus 3.125%; Over 364 days: the Seasoned Spread;

After the expiration of the Permissible Wet Mortgage Loan Document Delivery Period, the interest rate will increase to the Seasoned Spread until the Mortgage Loan Documents for such Mortgage Loan have been received by the Buyer.

Seasoned Spread:

Principal Curtailment Payment:

One percent (1.00%) over the Pricing Rate

On the day after the Targeted Repurchase Date , an amount equal to one hundred percent (100%) of the remaining unpaid Purchase Price for such Purchased Repo Assets not repurchased.

Interest and/or Principal Payments (the “Payment Date”):

Purchase Request
Delivery Deadline:

Shall be paid on the twenty third (23^rd) calendar day of each month; provided, that if such day is not a Business Day, on the next Business Day.

No later than 1:00 p.m. (Pacific Standard Time) on the proposed Purchase Date for the related Transaction.

Payment Deadline:

Allocations:

Other Applicable Sublimits

Wet Mortgage Loan Limit:

Permissible Wet Mortgage Loan Document Delivery Period:

All payments to be received by 2:30 p.m. (Pacific Standard Time) on the date such payment is due.

Eligible Non-QM Loans have a sublimit of 100%

Eligible Multi Family Mortgage Loans have a sublimit of 50%

Eligible Commercial Mortgage Loans have a sublimit of 25%

See Annex I attached hereto.

$17,500,000 or 35% of the Aggregate Purchase Price Limit.

With respect to any Wet Mortgage Loan, the third (3^rd) Business Day after the Purchase Date for such Mortgage Loan.

As permitted by Approved Seller underwriting guidelines.

As permitted by Approved Seller underwriting guidelines.

For Eligible Non-QM Loans, the lesser of (i) ninety-seven percent (97%) of the original principal amount of the promissory note for the Mortgage Loan or (ii) ninety-seven percent (97%) of the amount of the Take-Out Commitment.

For Eligible Multi-Family Loans, the lesser of (i) eighty percent (80%) of the original principal amount of the promissory note for the Mortgage Loan, or (ii) $4,000,000.00.

For Eligible Commercial Industrial Loans, Eligible Commercial Retail Loans and Eligible Commercial Office Loans, the lesser of (i) seventy-five percent (75%) of the original principal amount of the promissory note for the Mortgage Loan, or (ii) $4,000,000.00.

Seller hereby agrees to pay Buyer the following fees ("Required Fees"):

1.     Non-utilization Fee: Commencing on the fourth month after the Purchase Contract Date, and calculated on and as of the first Business Day of the first calendar month following delivery of written notice by Buyer to Seller, and payable within 15 Business Days from the last Business Day of any calendar month in which the average daily dollar amount of the Purchase Price for Purchased Repo Assets owned by Buyer during such calendar month is less than fifty percent (50%) of the average daily Aggregate Purchase Price Limit during such month, a non-usage fee calculated as follows: one quarter percent (0.25%) per annum of the amount by which the average daily Aggregate Purchase Price Limit during such month exceeds the average daily dollar amount of the Purchase Price for Purchased Repo Assets owned by Buyer during such month.

This Non-utilization fee is waived for any month in which Seller and/or its affiliates cumulatively maintain average daily deposits of $3,000,000 or more at Buyer.

2.     Supplemental Fees. Such additional supplemental fees as set forth on Annex I attached hereto, such supplemental fees to be payable upon demand by Buyer.

Expenses

Permitted Distributions

Seller hereby agrees to pay all reasonable third party expenses incurred by Buyer, including outside counsel expenses.

Dividend distributions are permissible so long as Seller 1 shall be in compliance with all covenants immediately prior to and immediately after such distributions and there shall not exist any Event of Default immediately before or after such distribution or repayment.

Minimum Required
Tangible Net Worth of Seller 1

$40MM consolidated (with a maximum of $10MM in undrawn capital) At any date, $40,000,000.00

Tangible Net Worth” shall mean with respect to a

Person at any date, the sum of:

(a)   The total assets set forth on the consolidated balance sheet of such Person, prepared in accordance with GAAP including (1) the sum of: (i) the par or stated value of all outstanding common stock, (iii) paid-in capital, and (iv) retained earnings; less (2) the sum of: (i) 50% of the value of MSRs, (ii)  goodwill, including any amounts (however designated on such balance sheet) representing the cost of acquisitions or Subsidiaries in excess of underlying tangible assets, together with costs allocated to the purchase or origination of such Person’s servicing portfolio or any part thereof, (ii) patents, trademarks, copyrights, leasehold improvements not recoverable at the expiration of a lease, and deferred charges (including, but not limited to unamortized debt discount and expense, and organizational expenses) and (iii) loans to, or investments in, affiliates, officers or employees;

(b)   Plus committed and undrawn capital up to the maximum set forth above;

Less, the total liabilities of the Person.

Seller 1 must attain positive net income, determined in accordance with GAAP, as of the last day of each calendar quarter, commencing with the quarter ending June 30, 2021, for the prior four (4) consecutive fiscal quarters then ending, of not less than $1.00.

Loan Conditions / Covenants

(notwithstanding Repurchase Agreement)

1.     Seller 1 must provide a signed copy of annual Seller 1 tax returns, to be submitted within 30 days after filing, or in case of extensions (copies also to be provided), no later than 6 months after first filing due date or upon the reasonable request by the Buyer.

2.     Seller 1 must provide annual CPA audited financial statements within 120 days of fiscal year end.

3.     Seller 1 must provide quarterly company prepared financial statements within 45 days of quarter end.

4.     Seller must provide a copy of company prepared monthly funding report within 10 Business Days following Buyer’s request therefor.

5.     Seller must provide a copy of monthly loan statements from Warehouse Lenders within 10 Business Days following Buyer’s request therefor.

6.     Seller 1 to provide a Quarterly Compliance Certificate certifying compliance with all covenants and good standing with state and federal regulatory agencies.

7.     Seller to advise the Buyer of any current or pending litigation or legal action in which the potential financial liability to the Seller exceeds $500,000.

8.     Seller to provide notification to the Buyer of any new credit facilities obtained within 30 days of execution of the respective loan documents.

9.     Seller is to provide Written Notification to the Buyer if there is repurchase or indemnification from any investor or investors which aggregates to $5,000,000 or more in a calendar year beginning January 1st. Written Notification is to be provided within 15 days of Seller receiving such notice of recourse.

10.   Cross-default with respect to any default under the terms, conditions and covenants of any other warehouse credit facility or other indebtedness in excess of $5,000,000 of the Seller.

11.   All net proceeds shall be routed through a designated control account maintained at the Buyer whereby such funds shall be used to either pay down outstanding loans or disbursed to the Seller’s deposit account at the reasonable discretion of the Buyer.

See Schedule A.

Statement Date

Interim Date

December 31, 2020

March 31, 2021

Addresses for Purpose

of Notice:

Seller:

Angel Oak Mortgage, Inc.

Angel Oak Mortgage Fund TRS

3344 Peachtree Road NE, Suite 1725

Atlanta, GA 30326

Buyer: Banc of California, N.A.
Warehouse Lending Division
3 MacArthur Place

Santa Ana, CA 92707

Attention: Zoila Price

Chief Place of Business:

3344 Peachtree Road, NE, Suite 1725

Atlanta, GA 30326