ANGEL OAK MORTGAGE, INC .: Entering a material definitive agreement, creating a direct financial obligation or obligation under an off-balance sheet arrangement of a registered person, financial statements and documents (Form 8-K)

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Clause 1.01 Conclusion of Substantial Final Agreement.

On August 16, 2021, three subsidiaries (“Subsidiaries”) Angel Oak Mortgage, Inc. (The “Company”) entered into a transaction without a market USD 50.0 million USA
mandatory funding mechanism with Veritex Community Bank (“Veritex”) by entering into the Loan and Security Agreement (the “Loan and Security Agreement”) and the Promissory Note (the “Bill of Exchange” and together with the Loan and Security Agreement – “Loan Documents”) among those Subsidiaries and Veritex. In accordance with the Loan Documents, Veritex agreed to provide one or more advances to one or more of the Subsidiaries of the Company (collectively referred to as the “Borrowers”) secured by mortgages, promissory notes and related collateral (the “Veritex Credit Line”). The Veritex Facility Line expires and redemption of outstanding amounts under the Veritex Facility Line is due August 16, 2023, with a few exceptions.

The amount provided by Veritex for each eligible loan is based on the outstanding principal, the loan-to-loan ratio and the borrower’s FICO score, and ranges from 80.00% to 92.50% depending on the type of loan. credit and the above criteria. The interest rate on any outstanding balance under the Loan Documents is the higher of (1) the sum of (A) the monthly LIBOR and (B) 2.30% and (2) 3.13%. The obligations of the Borrowers under the Loan Documents are guaranteed by the Company in accordance with the Guarantee Agreement (“Guarantee”), concluded simultaneously with the Loan Documents. In addition, the Company is subject to various financial and other conditions, including as of the last day of any financial quarter: (1) the Company’s tangible net worth must be at least equal to USD 150.0 million USA; (2) the Company’s ratio of (A) EBITDA to (B) debt service must be at least 1.25 to 1.0 for that quarter; (3) the ratio of the total amount of the Company’s liabilities to the total material net worth should not exceed 5.5: 1.0; and (4) the liquidity of the Company must be at least equal to USD 5.0 ​​million USA… A copy of the Loan and Security Agreement is attached to this document as Appendix 10.1 and is incorporated by reference. A copy of the promissory note is attached to this document as Appendix 10.3 and is incorporated by reference. A copy of the Warranty is attached to this document as Appendix 10.2 and is incorporated herein by reference.

In addition, Loan Documents contain default events (subject to certain materiality thresholds and grace periods), including non-payment, violation of covenants and / or certain statements and guarantees, cross-default, bankruptcy or insolvency proceedings and other common default events. … for this type of transaction. Remedies in such defaults are also common in this type of transaction and include accelerated repayment of principal under Loan Documents and Veritex’s right to liquidate collateral in accordance with the Loan Documents.

Borrowers are also required to pay certain ordinary fees to Veritex and reimburse Veritex for certain costs and expenses incurred in connection with the management of Veritex and the ongoing administration of the Veritex Facility Line.

A copy of the Loan and Security Agreement is attached to this document as Appendix 10.1 and is incorporated herein by reference. A copy of the bill of exchange is attached to this document as Appendix 10.2 and is incorporated herein by reference. A copy of the Warranty is attached to this document as Appendix 10.3 and is incorporated by reference.

Clause 2.03. Creation of a direct financial liability or an off-balance sheet transaction obligation of the domain owner. The information required by Clause 2.03 contained in Clause 1.01 of this Form 8-K Report is incorporated herein by reference.

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Item 9.01  Financial Statements and Exhibits.
(d)  Exhibits
Exhibit No.  Description
Exhibit 10.1    Loan and Security Agreement among Angel Oak Mortgage Operating
Partnership, LP, Angel Oak Mortgage REIT TRS, LLC, Angel Oak Mortgage Fund TRS
and Veritex Community Bank, dated     August 1    6    , 2021

Appendix 10.2. Promissory note issued Angel Oak Mortgage Operating Partnership, LP, Angel Oak Mortgage REIT TRS, LLCAngel Oak TRS Mortgage Fund in favor Veritex Community Bankdated August 1 6, 2021

Appendix 10.3 Warranty agreement concluded Mortgage Angel Oak , Inc.

in favor Veritex Community Bankdated August 1 6, 2021

Appendix 104 An interactive cover page data file (embedded in an embedded XBRL document).

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